- The government of Senegal has rebuffed claims by a country representative of the International Monetary Fund (IMF) that the country's "budgetary situation is very difficult."
Alex Segura told the local 'Le Quotidien' daily that Senegal's "budgetary situation was no longer tenable" and that the country would not be able to pay salaries in the coming months.
Segura said the level of Senegal's budget deficit is "becoming more and more worrying" as evidenced by the "unpaid bills amounting to up to US $462 million."
He said as economic adviser, the IMF is frank to say that "the system is no longer holding." Segura feared that Senegal would no longer be able to even pay salaries of the civil servants, more so meet other financial obligations, if it does not readjust itself.
But Senegalese authorities moved quickly to reassure the public that they had not forseen any "problem in paying salaries of its workers."
"We are facing no problems in meeting financial obligations to our workers," Senegal's Budget Minister, Ibrahima Sar, told journalists in the capital Dakar.
An emergency cabinet meeting chaired by the Prime Minister, Cheikh Hadjibou Soumaré, was summoned to address claims raised by the IMF representative.
Last month, the IMF mission report said the "Senegalese economy rebounded in 2007". The country's "economic growth is estimated 4¾%, driven by buoyant activity in the services and construction sectors, while the agricultural sector experienced a second year of output decline."
The report also said "rapidly rising international fuel and food prices led to a rise in inflation - which reached 6 percent at year-end - and put pressure on the external and fiscal accounts, especially in the second half of 2007".
Senegalese authorities have been commended for containing the fiscal deficit (payment order basis) within the program ceiling, although they made significant expenditure commitments in 2007 that would need to be paid in 2008.
"This partially reflects that budgetary room in 2007 was increasingly taken up by outlays to help contain price increases of food and petroleum products. The mission supports the authorities’ intention to adjust their spending and settle payment delays in 2008," the mission said, depicting that “Senegal’s economic prospects remain good, although not without risk."
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