In a strategic move to navigate economic uncertainties, Prime Minister Ousmane Sonko of Senegal has circumvented a parliamentary vote to pass the 2025 budget, amounting to 6.4 trillion CFA francs ($10.2 billion). This decision, outlined in a letter from President Bassirou Diomaye Faye, allows the budget to take effect unless challenged within the next 24 hours.
The budget forecasts revenue of 5 trillion CFA francs for the upcoming year, representing a modest 2% increase from the previous period, while expenditures are projected to rise by 15% to 6.6 trillion CFA francs. These estimates reflect a cautious approach taken by the finance ministry in light of ongoing economic challenges and political tensions surrounding the presidential election earlier in 2024.
Moreover, recent revelations from a comprehensive audit of Senegal's public finances painted a concerning picture. The audit uncovered that the country's debt-to-GDP ratio exceeded 80% by the end of last year, surpassing previous reports and leading to the freezing of $1.8 billion in IMF loans earlier in the year. The audit also exposed a more significant budget deficit averaging over 10% of GDP from 2019 to 2023, nearly double the figures reported during the previous administration.
As the IMF prepares to discuss a new loan program in January, the forthcoming results of the audit are expected to prompt revisions in debt and debt service projections for 2024 and 2025. The finance ministry has predicted a budget deficit of over 11% for the current year and 7.8% for the following year, emphasizing the critical need for financial prudence and effective management in the face of these challenges.
The approval of the 2025 budget without a parliamentary vote underscores Senegal's urgency in navigating economic headwinds while awaiting crucial financial support from international partners and the outcomes of the ongoing fiscal review.