Senegal's Sovereign Dollar Bonds Drop After Government Audit Reveals Higher Debt and Deficit Figures - IMF Reacts | Investing News
In a surprising turn of events, Senegal's sovereign dollar bonds took a hit on Friday following the release of a government audit that unveiled larger debt and deficit figures than previously reported by the former administration. According to Tradeweb data, the 2033 maturity fell by 2.3 cents to bid at 84.54 cents on the dollar, while the 2048 issue saw a decrease of 2.42 cents.
The International Monetary Fund (IMF) acknowledged that the government had shared initial findings of the audit with them and expressed support for the process. The IMF stated that they were collaborating with the government to determine the appropriate next steps.
The audit, ordered by President Bassirou Diomaye Faye's new administration, revealed that the deficit at the end of 2023 was over 10%, significantly higher than the approximately 5% reported by the previous government. In response to these findings, the Minister for the Economy Abdourahmane Sarr disclosed that President Faye's government opted not to request a disbursement from the IMF in July under the $1.8 billion, three-year lending program to avoid violating IMF regulations.
Currently, both parties are engaged in discussions to chart a way forward. It remains to be seen how this development will impact Senegal's financial stability and future economic policies.
In conclusion, this news highlights the importance of transparency in government financial reporting and the potential consequences of inaccurate data on national debt and deficits. Investors and individuals following Senegal's economic landscape should closely monitor these developments as they could have significant implications for the country's financial health and investment opportunities.