Africa Finance Corporation advises Senegal to focus on growth - Semafor

The Africa Finance Corporation advised Senegal’s government to resist growth-limiting conditions as Dakar negotiates its new $2.2 billion International Monetary Fund program, the multilateral lender’s CEO revealed.

Speaking at Semafor’s The Next 3 Billion summit in New York, Samaila Zubairu said the AFC engaged directly with Senegal’s new administration after the discovery of undisclosed loans under the prior government sent public debt past 130% of GDP. Zubairu said Dakar should insist on revenue expanding investments — such as infrastructure and formalizing mineral value chains — rather than relying solely on fiscal belt-tightening. “Growth is the only way out of tight fiscal positions,” he said, adding that African economies must be allowed to grow their economies to overcome debt problems. “We can’t pay back if we don’t have revenue,” said Zubairu.

The AFC’s intervention in Dakar highlights an escalating effort by African regional lenders to counter traditional Western-led bailout conditions. The IMF classifies at least a third of African countries as being in debt distress, or at least at high risk of it. A number of other nations — such as Ethiopia, Ghana, and Zambia — have in recent years agreed to IMF deals that mandated budget cuts and sparked public debate and protests.