Senegal - Strengthening Senegal’s Fiscal Sustainability Program

Overview & Synopsis

This document describes the context, rationale, and objectives of World Bank support for the new government program, which aims to improve the management of public expenditures and revenues in Senegal. The Government of Senegal (GoS) has prepared the 2025-2029 SEN-FINTRAC (Programme du Sénégal pour la Transparence dans la Gestion des Finances Publiques et la Consolidation Budgétaire) Program with the overarching objective of strengthening transparency in the governance of public finances, ensuring public debt sustainability, and improving the mobilization of domestic resources, while modernizing tax and financial administration. The government program (SEN-FINTRAC) responds to a context in which the sustainability of Senegal’s development critically hinges on sustaining public debt and strengthening fiscal policy. Senegal emerged as one of the fastest-growing economies in the region over the past decade. The annual real gross domestic product (GDP) growth surged from about 2.8 percent in 2008–13 to over 6 percent in 2014-19 before declining to 4.4 percent over 2020–24 in the context of overlapping global shocks and the beginning of hydrocarbon production. Structural vulnerabilities to growth still prevail around low productivity, limited investment to generate economic opportunities, and human capital, as well as spatial disparities, a narrow private sector, and declining competitiveness. Fiscal and public debt vulnerabilities have risen significantly, eroding Senegal’s capacity to absorb shocks. According to the audit report by the Court of Accounts (the Supreme Audit Institution) (Cour des Comptes, CdC) (at the request of the new GoS) made public on February 12, 2025, the fiscal deficit averaged 3.5 percent of GDP in the years between 2014 and 2018, before widening to 11.1 percent of GDP over 2019–23. Public debt has more than doubled over the last decade, from 36.9 percent of GDP in 2013 to an estimated 99.7 percent of GDP in 2023, according to the CdC audit report. The new GoS elected on the promise of radical change aims to transition to an upper-middle-income economy and more than halve the poverty rate by 2050 by addressing these long-standing structural vulnerabilities. These costly development goals, including investment in human and physical capital (primarily energy and transport infrastructure), are jeopardized by limited fiscal space and recently amplified macro-fiscal and public debt vulnerabilities.