Senegal budget row extends IMF deal uncertainty
Lawmakers reject the government’s $13 billion plan which included a cut to public investment.
Senegal's parliament rejected a revised budget on Tuesday, complicating the country's efforts to secure financing from the International Monetary Fund (IMF). A longstanding disagreement over spending policies and relations with the IMF has destabilized Senegalese politics, potentially undermining creditors' confidence and delaying IMF approval.
The government's $13 billion plan involved cutting public investment to accommodate higher costs resulting from increased energy subsidies due to high oil prices. However, the majority party Pastef, led by parliament speaker and former Prime Minister Ousmane Sonko, contended that the proposed budget would impose an excessive burden on households and essential public services.
Senegal is currently seeking final approval for a three-year, $2.2 billion IMF loan program aimed at alleviating budget pressures and unlocking other financing. The deal, initially agreed in principle in September, would replace a program that was frozen following the disclosure of billions of dollars in unreported government debt in 2024.
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