Senegal party that controls parliament comes out against revised budget bill
Senegal's Pastef party, which holds a large majority in the National Assembly, said it would not pass the government's revised budget, reinforcing doubts over how quickly the country can push ahead with its debt restructuring,
Senegal's ruling Pastef party has declared it will not endorse the government's revised budget bill, leaving the nation in uncertainty about its progress towards debt restructuring. The decision to reject the bill was announced following a statement from the party, led by former Prime Minister Ousmane Sonko. Sonko highlighted "disagreements over certain budgetary decisions, the chosen financing arrangements, and the insufficient guarantees provided to parliament" as the reasons for the party's stance.
Senegal has been wrestling with a debt burden of 132% of its gross domestic product (GDP) by the end of 2024, according to International Monetary Fund (IMF) figures. The government discovered billions of dollars in misreported borrowing by the previous administration, prompting the recent IMF-backed $2.2 billion, 36-month Extended Credit Facility.
However, without the parliamentary approval of the revised budget, the government risks delaying the IMF program, which is crucial to its debt restructuring strategy. Prime Minister Ahmadou Al Aminou Lo intends to hold a press conference on Sunday to address the revised budget, which aims to enhance the quality of life for Senegalese citizens.
The amended 2026 budget bill paints a grim fiscal outlook, with real GDP growth forecasted to drop to 2.7% from around 5% in the original budget. The deficit is also projected to widen to 7.6% of GDP from 5.4%, primarily due to a tripling of energy subsidies to 790.3 billion CFA francs ($1.36 billion) from the original 250 billion.
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