By Diadie Ba and Anait Miridzhanian
DAKAR (Reuters) -Senegal’s Court of Auditors released a long-awaited review of the country’s finances on Wednesday that confirmed the previous government misreported key economic data including debt and deficit figures.
Senegal’s sovereign Eurobonds tumbled following release of the report. The 2033 dollar-denominated maturity led the losses, shedding more than 2 cents to bid at 79.95 on the dollar by 1413 GMT.
“The work carried out by the Court shows that outstanding debt is higher than that shown in the reporting documents,” the court’s report said.
The court’s report confirmed an audit that had been ordered by President Bassirou Diomaye Faye, who took office in April 2024.
At the end of 2023, the total outstanding debt represented 99.67% of gross domestic product, the court’s report said. That compared with a previously recorded figure of 74.41%.
The audit ordered by Faye had revealed that Senegal’s debt and budget deficit were much wider than former President Macky Sall’s administration had reported.
As a consequence of the audit, Faye’s government decided in June not to present a request for further disbursement under its three-year $1.8 billion credit facility with the International Monetary Fund.
The IMF had suspended the programme pending the Court of Auditors’ review.
The IMF said on Wednesday that it would analyse the report and initiate consultations with authorities to address issues raised.
“The IMF remains committed to supporting the authorities moving forward,” an IMF spokesperson said via email.
The court’s report, which covers public finances from 2019 to March 2024, said it detected other anomalies and data discrepancies between the reported and the actual numbers.
“The deficit calculated and reported to the IMF for the period under review is very far from its real value, if the exact volume of project loan disbursements is taken into account,” the court said in the report.
The reviewed budget deficit for 2023 stood at 12.3% of GDP compared with 4.9% reported by the previous administration, the court said.
Leo Morawiecki, associate investment specialist for emerging market debt at abrdn, said the debt-to-GDP ratio for 2024 was likely to be in excess of 110% given the large deficit being run.
“In response, the IMF will almost certainly move Senegal from moderate to high risk of debt distress,” he said in a note, adding that the government seemed committed to fiscal consolidation and an IMF programme.
In a note to investors after the report’s release, Senegal’s finance ministry said it would centralize management of its public debt and implement strict controls over projects financed from external resources.
The ministry will shortly organise a call with global investors, the note said.
(Reporting by Diadie Ba and Anait Miridzhanian; Additional reporting by Libby George; Editing by Bate Felix, Sofia Christensen and Leslie Adler)
