The Executive Board of the International Monetary Fund (IMF) has completed discussions on $221 million request by Senegal to meet the urgent budgetary and balance of payments needs stemming from the COVID-19 pandemic.
If approved, the disbursement of $221 million to occur by mid-April of which two thirds or $ 147.3 million would be a loan under the Rapid Financing Instrument (RFI) and one third or $ 73.6 million under the Rapid Credit Facility (RCF).
“This will allow the authorities to meet the urgent budgetary and balance of payment needs stemming from the deterioration of the global economic conditions and the spread of COVID-19 in Senegal. Senegal’s financing request will be considered by the IMF’s Executive Board by mid-April,” IMF said in a statement received by TODAY NEWS AFRICA in Washington D.C.
Senegal has implemented containment measures to avoid the propagation of the virus, lower external demand, reduced remittances, and the sudden stop of travel and tourism are having a significant impact on growth and generating an urgent balance-of-payments (BOP) need. The IMF will help preserve fiscal space for essential COVID-19-related health expenditures, while catalyzing additional donor support.
The authorities have taken strong actions to mitigate the impact of the pandemic by declaring a state of emergency, closing schools, suspending flights, banning public gatherings, and putting a curfew in place. They are implementing a comprehensive plan to upgrade the health system and contain the economic impact, including by setting up a national solidarity fund and providing targeted support to vulnerable households and firms.
But even with low number of cases, the economy is already suffering. The $221 million loan is a way to minimize the impact.