By Duncan Miriri
Senegal’s international bonds fell by up to 4 cents on Friday, a day after the International Monetary Fund completed its mission to the country without agreeing a new lending programme.
Near-term maturities fell the most, with the euro-denominated 2028 bond shedding 4.1 cents to bid at 80 cents on the euro. The 2033 dollar-denominated bond lost 3.7 cents to 67.46 cents. The bonds later cut the losses to about 2 cents.
The IMF froze Senegal’s previous $1.8 billion lending programme last year after the then-new leaders revealed unreported debts, which have since ballooned to more than $11 billion.
A team of staff from the Washington-based Fund said late on Thursday that they had not struck a deal on a new funding programme, but aimed to conclude one as soon as possible.
“The best-case scenario of the IMF and Senegal agreeing a deal has not happened,” said Charlie Robertson, head of macro strategy at London-based FIM Partners.
Investors were particularly concerned by the Fund’s scepticism over the government’s annual revenue growth target, Robertson said.
IMF mission chief Edward Gemayel said the government’s target of tax revenues increasing by about 5% of GDP in one year had never happened previously, and a statement from the Fund said the “very high tax yield assumed from the announced measures poses a significant risk.”
The government is counting on revenue from new taxes on gambling and mobile transfers and by the phasing out of tax exemptions.
Gemayel also said the Fund expects Senegal’s economy to grow at 3% in 2026, while the government pegs it at 5%.
The IMF estimates that at the end of last year, total public sector debt – including state-owned enterprises and domestic arrears – stood at 132% of GDP, including 4% in domestic expenditure arrears.