The International Monetary Fund (IMF) has applauded Senegal for taking significant steps to strengthen its economy and clarify its debt status. These actions come in response to earlier misreporting of the country’s financial obligations under the previous administration.

Debt Clarification After Misreporting

According to IMF spokesperson Julie Kozack, Senegal has been actively cooperating with the Fund to address the discrepancies in its reported debt levels. The reforms were highlighted by IMF First Deputy Managing Director Gita Gopinath, who acknowledged Senegal’s efforts to rectify its fiscal data and improve transparency.

Audit Reveals Misleading Deficit Figures

An audit initiated by Senegal’s newly elected President, Bassirou Diomaye Faye, uncovered that the former government had significantly understated the country’s budget deficit. The audit revealed that by the end of 2023, Senegal’s debt had reached nearly 100% of its Gross Domestic Product (GDP), in contrast to the previously reported 74%.

IMF Suspended Disbursements Following Audit

Following the discovery of the misreporting, the IMF paused disbursements under its ongoing loan program with Senegal. The program was originally designed to help monitor and support the country’s economic recovery and fiscal stability. The suspension was necessary to ensure accurate data was used in all financial dealings.

Senegal Takes Steps to Restore Trust

Senegal’s prompt response to the findings has earned the approval of IMF officials. The country has begun implementing reforms aimed at enhancing fiscal transparency and restoring trust among international creditors and investors. These include updated reporting systems and stronger oversight of public finances.

Ghana Also Receives IMF Praise

In addition to Senegal, Ghana was commended by the IMF for its proactive approach to improving fiscal management. The praise came as Ghana unveiled its mid-year budget proposals, which aim to correct past financial missteps and set the country on a more stable economic path.

Focus on Budget Discipline in Ghana

Ghana’s new budget framework has been described as strong and well-aligned with the goals of the IMF-supported program. The IMF highlighted corrective actions taken by Ghanaian authorities, including an audit of outstanding payables to better understand and control fiscal slippages that occurred before the 2024 elections.

Legal Reforms Strengthen Fiscal Management

Ghana has also passed important reforms to its public financial management and procurement laws. According to the IMF, these changes will help build a more responsible fiscal environment by promoting better oversight, reducing wasteful spending, and improving transparency in public contracts.

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Energy Sector Strategy Commended

Another area in which Ghana has received recognition is the energy sector. The IMF noted that Ghana has recently adopted a comprehensive strategy to address ongoing challenges in energy production and distribution. These issues have historically weighed heavily on the national budget and economic performance.

Mid-Year Budget Aligned with IMF Objectives

Kozack noted that Ghana’s mid-year budget review is “fully in line” with the parameters and objectives outlined in the IMF supported economic program. This alignment is seen as a sign of commitment from Ghanaian authorities to maintain financial discipline and economic resilience moving forward.

Positive Outlook for Both Nations

The IMF’s praise for both Senegal and Ghana reflects a broader trend of African nations working to stabilize their economies in the wake of global financial pressures and domestic challenges. These efforts not only improve investor confidence but also pave the way for sustainable growth.

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