Senegal: Key takeaways from IMF visit

• Discussions with authorities on misreporting case to continue for a few more weeks

• Authorities reiterate interest in requesting a new IMF programme

• Process aside, the key issue for bondholders will be the conclusion of the IMF's DSA

  
  

The IMF issued a statement on 26 August following the conclusion of a week-long staff visit to Senegal to discuss the actions needed to address the misreporting case before it goes to the Executive Board for consideration and the contours of a potential new programme. The visit was well-flagged, having been announced at the IMF's regular press briefing on 24 July (see our preview here), and comes after a period of relative silence since the IMF Spring Meetings in April.

The statement said the mission discussed a comprehensive set of remedial measures to address the root cause of the misreporting case and that talks continue. Measures included centralising debt management functions, and strengthening budgetary controls and transparency in public financial management.

But it is somewhat disappointing that the visit didn't produce anything more concrete at this late stage. The statement merely noted discussions "will continue over the next few weeks" before the misreporting case can be presented to the board, rather than something more specific. That might suggest some progress. But, in a more optimistic scenario, for example, we might have hoped the statement could have confirmed everything is in place for the misreporting case to go the board in coming weeks or even specifically this month. That is still possible, of course, but we are still left guessing (indeed, with discussions continuing for a few more weeks, and allowing for the time needed to schedule a board meeting, prepare the board papers, and circulate them in advance, the earliest we might now be looking at the board, for which we still think the most likely outcome is granting of a waiver, with remedial action, is late September if not early October).

Nor was there much to add on an IMF programme, but we weren't expecting much at this stage anyway and we certainly didn't expect the visit to produce a staff level agreement on a new programme. It is too soon for that (and formally, based on what the statement went on to say, a formal request has yet to be made, pending resolution of the misreporting case - see next para).