Senegal: Hydrocarbon to power growth by 10 percent

This year's budget, set at 6,411.5 billion CFA francs, is based on the hope of a gradual recovery in Senegal's…

This year’s budget, set at 6,411.5 billion CFA francs, is based on the hope of a gradual recovery in Senegal’s economic activity and the start of gas and oil exploitation.By Ibrahima Dione

Senegal is about to enter a new era. The bright prospect of hydrocarbon exploitation should boost its economic growth rate to 10.1 percent in 2023, up from 4.8 percent in 2022 and 6.5 percent in 2021.

During the past year, events have strongly affected the main budget orientations retained in the initial finance act. “These include the Russian-Ukrainian crisis, with its consequences of higher oil and food prices, inflationary pressures affecting all economic sectors, the latent effects of the security crisis in Mali, Senegal’s strategic partner, in addition to those of Covid-19,” Mamadou Moustapha Ba, Minister of Finance and Budget said.

After the adoption of an amendment to the finance law in May 2022, “the budget was executed under good conditions with a commitment rate of 95.7 percent and an authorization rate of 95.4 percent, thanks to good control of procedures throughout the expenditure chain. No less than 88,000 commitment vouchers have been issued and 97.8 percent of them have been processed,” he said on Tuesday in Dakar, during a workshop to launch the 2023 budget management.

The exogenous factors of 2022, Mr. Ba went on, have led the government to make reorientations and adjustments that were crucial to mitigate the impact of shocks on the population.

This dynamic, he promised, will be maintained with “the revalorization of salaries in the civil service (+236 billion CFA francs), the fight against the high cost of living thanks to the continuation of subsidies (550 billion CFA francs, including 450 billion for energy and 100 billion for basic necessities, not including tax revenue waivers) and increased support for the most vulnerable households (family security grants which will increase from 25 to 35,000 CFA francs per quarter, and the number of people who will eventually be able to benefit from these grants will increase to 500,000 households, compared to 316,000 at present).”

Besides, according to the minister, Senegal’s 2023 budget of 6,411.5 billion CFA francs “will focus on the establishment of conditions for food sovereignty, for social markers (Delegation for Rapid Entrepreneurship, Emergency Program for the modernization of axes and border territories, Emergency Program for Community Development, Program for the modernization of cities, Universal Health Coverage, for the reinforcement of infrastructure for the opening up and improvement of mobility, and for the reinforcement of access to basic services.

All this requires “significant financial resources at a time when it is necessary to reconcile the renunciation of tax revenues and the tightening of credits,” Mamadou Moustapha Ba, noted insisting that “the financial authorities, the Tax and Customs services and the treasury are all mobilized to achieve the objectives of revenue mobilization and financial resources to ensure a harmonious coverage of public expenses.”

According to him, the 2023 budget management will see the acceleration of the implementation of the Medium Term Revenue Mobilization Strategy, which will result in the expansion of the tax base and the improvement of collection in a country that “will proceed with the adoption of a moderate and prudent debt strategy and pursue the policy of optimization and rationalization of public spending.

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