Dakar, June 15 (APS) - Senegal's budget deficit is expected to reach 6.1% of GDP in 2020, says the International Monetary Fund (IMF)

"The total consideration of the impact of the pandemic on revenue collection and additional expenditure needs brings the projected budget deficit to 6.1% of GDP in 2020," announced Corinne Deléchat, an officer of the Fund. 

Ms. Deléchat led a virtual mission from June 2 to 12, 2020 to conduct talks as part of the first review of the agreement with the IMF under the Policy Coordination Instrument (IPCE).

He stressed that the Senegalese authorities have made "a commitment to implement temporary, well-targeted, cost-effective measures fully reflected in a revised budget". 

They wish to "gradually return to a budget deficit of 3% of GDP by 2022 (WAEMU convergence objective) as the situation normalizes," said the IMF official. 

"The authorities have also committed to initiating measures to strengthen transparency and accountability regarding emergency spending," she revealed.

With regard to measures to support the economy, it recalls the importance of "ensuring that support for businesses through the financing granted is well coordinated and targeted and that the conditions of eligibility for the various mechanisms are clarified". 

"This support will also have to be based on appropriate risk sharing to limit moral hazard and tax costs. Direct transfers to viable enterprises will also have to be assessed on the basis of cost-benefit analyses."

In the opinion of Corinne Deléchat, "the crisis represents an opportunity to extend protection mechanisms for the most vulnerable groups (social safety nets) and increase the effectiveness of existing instruments to support small and medium-sized enterprises (SMEs)". 

"The government will explore the possibility of expanding social safety nets in cooperation with development partners. In addition, the government intends to accelerate the strengthening of the coordination of entities and programmes whose mission is to support SMEs."

Ms. Deléchat announces a continuation of the structural reforms of public financial management, with the full implementation of the programme budgets from the 2021 finance law, the increased control of deposit accounts and the strengthening of the Treasury Single Account as well as the improvement of debt management. 

"The government is also continuing the preparation of the governance framework for revenues from hydrocarbon exploitation," she added.