In a renewed push to strengthen domestic revenue and curb its reliance on external funding, Senegal is set to implement more rigorous tax compliance measures, according to Prime Minister Ousmane Sonko.
The West African country is currently working with the International Monetary Fund (IMF) to resolve a recent issue involving the misreporting of debt and fiscal deficit figures. This discrepancy led to the suspension of Senegal’s $1.8 billion financial support arrangement with the IMF.
“Good tax reform… can help us withstand the 250 billion CFA francs ($437.64 million) that the IMF gives us every year,” Sonko was quoted as telling Senegalese nationals living in Guinea by Le Soleil newspaper on Tuesday.
The Prime Minister’s office did not immediately respond to a request for comment. Le Soleil also cited Sonko stating that Senegal has not received any IMF disbursements for the past year.
“Senegal is still standing… a country does not develop by being held by the hand, but by building on its own strengths, its own resources, and its own budgetary discipline,” he said.
To avoid the need for tax increases, the Prime Minister emphasized that all Senegalese citizens would be required to contribute their fair share to national revenues, according to the report.
The country’s recent admission of underreported debt figures has shaken investor confidence. According to a JPMorgan bond index, Senegal’s dollar-denominated bonds have declined by 7.3% this year—significantly worse than the average 3% gain among other African sovereign issuers. This performance also doubles the losses of Angola, the second-worst performer, whose bonds are down 1.5% since January.
In an effort to plug financing gaps, Senegal has turned to regional debt markets. In April, the government issued a 405 billion CFA francs ($708.97 million) bond. However, this move has drawn criticism from opposition parties, who are calling for greater transparency around the country’s debt management practices.
($1 = 571.2500 CFA francs)
