Senegal PM rules out drastic cuts after IMF loan

Senegalese Prime Minister Ahmadou Al Aminou Mohamed Lo said Tuesday that the government would not take “drastic adjustment” measures after reaching agreement with the International Monetary Fund on a $2.2 billion loan.

“We are not sacrificing the interests of the Senegalese people,” Lo told lawmakers while presenting his government programme following his appointment in May by President Bassirou Diomaye Faye.

Lo said there would be no repeat of the “drastic adjustment” measures seen in the 1980s, when IMF-imposed budget restrictions on African states led to business closures, job losses and freezes on social spending.

He said the government had agreed on “rational management measures”, including rationalising public spending, controlling the payroll and eliminating institutions he described as draining the budget, while increasing social spending.

Senegal's economy minister said last week, when the loan was announced, that it would not hurt health and education spending and that households and businesses would not face new tax burdens.

Senegal is heavily indebted, with total public-sector debt estimated at 132 percent of GDP at the end of 2024. A previous $1.8 billion IMF aid programme agreed in 2023 was suspended after previously unreported debt was discovered under the former administration.

Lo addressed lawmakers one week after the new three-year loan was announced. Senegal's National Assembly is controlled by the opposition Pastef Party, led by Lo's predecessor, Ousmane Sonko, whom Faye dismissed in May after months of disagreement.