Details of the two debt initiatives for Senegal are provided in last year’s DSA (see Senegal: Joint IMF/IDA Debt Sustainability Analysis, May 2008 in IMF Country Report No. 08/209 on www.imf.org and IDA report number -IDA/SecM2008-0466 on www.worldbank.org).
Domestic debt includes debt issued in the WAEMU financial market.
Latest BCEAO data on the International Investment Position.
The indicative external debt burden thresholds for Senegal are shown in Figure 1. They are based on Senegal’s classification as a “medium” performer given its (three-year average) score of 3.71 on the World Bank’s Country Policy and Institutional Assessment index (CPIA). The CPIA measures the quality of policies and institutions; weak performers score below 3.25, strong performers above 3.75.
Baseline projections reflect the settlement of payment delays remaining at the beginning of 2009 as well as expected—larger—privatization receipts in 2009. Both are treated as budget financing items in the baseline but, by design, ignored in the stress tests—thereby on balance marginally worsening the results of the tests in this case.
Senegal’s economy is prey to large fluctuations in real GDP growth, with a standard deviation of growth of 2 percentage points over the last 10 years. Real GDP growth dropped by 3 percentage points in 2006 as ICS production collapsed and 2¼ points in 2008 due to government payment delays.