IMF urges Senegal to tighten belt

Dakar, 16 May – (ANA) - The International Monetary Fund (IMF) has urged new Senegalese President Macky Sall to get rid of energy subsidies offered by his predecessor, warning the West African country's deficit could rise to untenable levels unless spending fell. Sall defeated Abdoulaye Wade in a March election after a tense campaign marked by violence but which ultimately passed smoothly and reinforced Senegal's credentials as the most stable country in mainland West Africa. Wade rented costly extra capacity to prop up the country's outage-prone electricity generating sector and offered other fuel subsidies which the IMF estimates would total 150 billion CFA francs or two percent of GDP this year. "In the absence of remedial measures, the fiscal deficit could exceed eight percent of GDP this year - clearly, an unsustainable level," the IMF said in a statement, acknowledging the impact to the economy of last year's drought and the uncertainty surrounding the election period. Senegal has yet to issue 2011 deficit figures but some economists said it reached around seven percent of GDP. The IMF said it was raising its 2012 deficit target from 5.6 percent to 6.4 percent based on the assumption of further budget savings. (ANA)

FA/ANA/16 May 2012-----------