By Judith Ugwumadu | 11 February 2015

Senegal needs to strengthen its public financial management system and bridge infrastructure gaps if it is to achieve its vision of acquiring emerging economy status, the International Monetary Fund has said. 

IMF managing director Christine Lagarde described the government’s Plan Senegal Emergent as ‘ambitious’ and urged the West African country to accelerate and broaden the reforms integral to its vision.

She said the Senegal’s slow progress in implementing fiscal reforms had resulted in the country maintaining an average yearly growth of 3-4%.

‘Fulfilling Senegal’s aspiration of middle-income status will require a shift toward policies that will inject greater dynamism into the economy, and open space for small and medium enterprises and for foreign investment,’ Lagarde said.

‘Clearly, additional fiscal space for public infrastructure and social spending is needed. Yet simply accumulating more debt is not the way to go. This space should instead be widened by increasing revenues and rationalising spending.’

Lagarde suggested Senegal reallocate spending from poorly planned capital projects and untargeted electricity subsidies, which benefit mostly the rich, to well-planned public infrastructure and investment in education, training and medical care.

‘The government’s goals are ambitious but achievable. Risks are substantial but manageable, and the opportunities are vast. Now is the time to go further, to work together towards an inclusive, job-rich and sustainable growth strategy,’ she added.

Lagarde pledged that the IMF would be ‘by Senegal’s side’ to build to help implement the reforms.

Last week, the African Development Bank indentified opportunities that could make integration in West Africa, and Senegal in particular, a more effective driver of development and highlighting the need for investment in infrastructure.