The International Monetary Fund (IMF) has approved the immediate release of approximately US$215.78 million (SDR 161.82 million) in financial assistance to Senegal. This financial assistance is provided to support the country’s economic recovery, in the wake of the COVID-19 pandemic. This financial assistance is also ringfenced to help Senegal buffer against the current global economic crisis.
The IMF and Senegal
On June 22, 2022, the IMF executive board approved the immediate release of approximately US$215.78 million to Senegal. The IMF’s financial assistance intends to:
- Help Senegal recover from economic losses sustained as a result of the COVID-19 pandemic.
- Assist Senegal with buffering against the economic effects of the war in Ukraine.
- Curb the effects of ECOWAS sanctions against Mali.
- Steer efforts towards mitigating the risk and effects of climate change.
Global economic crisis
The war in Ukraine and the resulting sanctions on Russia’s oil exports are driving up the rate of inflation in several countries, including Senegal, through increased prices for wheat, oil and fertilizer. The latter also threatens agricultural productivity and thus food security.
“The Senegalese economy entered 2022 with strong growth momentum but the spillovers from the war in Ukraine are hampering this rebound. The post-pandemic recovery is now facing headwinds from soaring global fuel and food prices and an increasingly challenging external environment. Near-term growth prospects have weakened, inflationary pressures have emerged, and fiscal and external financing needs have increased,” outlined Mr. Kenji Okamura, Deputy Managing Director and Acting Chair of the IMF executive board
As for the ECOWAS sanctions against Mali, the June 2022 IMF press release states that they prevent the two countries from trading effectively, worsening an already difficult economic situation.
Economic support for Senegal
At this time, it’s imperative for the Senegalese economy to be provided with direct financial assistance, owing to the complex nature of the current global economic landscape. Financial assistance from the IMF can bolster post-pandemic recovery efforts, and propel economic development across Senegal.
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