By Judith Ugwumadu | 29 September 2014

Senegal should continue to improve its public financial management and economic governance systems to enhance the efficiency of public investment over the medium and long term, the International Monetary Fund has said. 

The West African country has decided to adopt a new development model to accelerate its economic progress. This strategy, known as Plan Emerging Senegal (PSE), focuses on economic policies and structural reforms aimed at achieving and sustaining strong and inclusive growth.

Following a review of Senegal’s economy, the IMF observed that economic performance during the first half of the year was ‘satisfactory’, growth had picked up and inflation remained low. Also, good revenue performance combined with expenditure restraint resulted in a lower budget deficit than expected in the first half of the year, it said.

‘Overall, the implementation of the PSE was satisfactory with respect to all quantitative criteria and indicative targets through end-June 2014,’ the IMF said.

The mission welcomed the authorities’ commitment to implement the PSE while maintaining sound public finances and sustainable debt levels. There was also scope to improve public consumption and the quality of public spending by mobilising government revenue to develop and supply adequate services for the fast-growing population, it said.

‘In this context, the mission discussed with the authorities different measures that, without harming economic growth, would contain the budget deficit to their original target of 14% in 2015,’ the IMF said.

‘The mission also stressed the need to continue to improve public financial management and economic governance and to reinforce capacity building to enhance the efficiency of public investment.

‘The mission encouraged the authorities to accelerate the implementation of structural reforms, which are essential for the success of the PSE.’

These include measures to improve the business climate and boost the financial sector, as well as continuing to reform the energy sector to boost electricity generation.