Senegal's New Economic Blueprint: Domestic Investment Without Debt
Prime Minister Ousmane Sonko introduces Senegal's economic recovery plan financed largely through domestic resources to avoid new debt. The initiative targets reducing the budget deficit by 2027, cutting public spending, revising tax policies, and attracting investment, while addressing previous hidden debts and IMF challenges.
In a bid to stabilize Senegal's financial landscape, Prime Minister Ousmane Sonko unveiled a comprehensive economic recovery plan on Friday. Prioritizing domestic resource mobilization, the plan aims to finance 90% of the initiative while avoiding new debt, marking a significant move for the West African nation that recently began exploiting oil and gas reserves.
Amidst scrutiny over billions in undisclosed debts from previous administrations—and with an IMF loan program currently frozen—Sonko's plan seeks to restructure the nation's finances by 2028. Notably, it addresses cutting public expenses and increasing revenue with measures such as downsizing state institutions and eliminating certain tax exemptions, especially within the growing digital economy.
Senegal also plans to impose higher taxes on tobacco and introduce visa fees, alongside efforts to renegotiate contracts in the oil and mining sectors. As part of the reforms, the government aims to refine subsidy structures for better-targeted social aid. The IMF has long advocated for the reduction of costly energy subsidies, suggesting their phase-out in favor of direct compensations to aid the nation's vulnerable citizens.
(With inputs from agencies.)
Google News