(Ecofin Agency) - The indefinite postponement of the presidential election initially scheduled for February 25, 2024, has led to increased instability in Senegal. This situation arises as a growing gap emerges between the IMF's projections and the long-term sentiment of bond investors.

Widespread unrest has gripped major cities in Senegal, including the capital Dakar, creating an atmosphere of uncertainty among investors targeting public securities issued by the West African Economic and Monetary Union (WAEMU) member countries.

Unauthorized demonstrations, met with intervention from law enforcement, have erupted in various parts of the country, disrupting activities in Dakar, as reported by sources on the ground. President Macky Sall's decision to postpone the presidential election without providing a new date is the primary trigger for the current discontent.

President Macky Sall, who pledged not to seek re-election, justified his decision by citing institutional deadlock resulting from disagreements between parliament and the Constitutional Council regarding the candidacy, notably of Karim Wade and the highly popular Ousmane Sonko. However, in the aftermath, it has been revealed that the National Assembly has adopted a bill setting the new election date for December 15, 2024.

These disturbances occur as the country seeks resources from investors within WAEMU through a public call for savings amounting to CFA200 billion. The outcome of subscriptions, closing on February 7, 2024, will provide a new measure (indicator) of investor sentiment.

In October 2023, while disbursing a new tranche of CFA169 billion ($276 million), the International Monetary Fund (IMF) remained cautiously optimistic, forecasting a GDP growth of 8.3% for Senegal in 2024. However, several indicators in the capital market suggest that this sentiment was not widely shared by many investors. Sonatel, the premier company on the stock exchange in Senegal and WAEMU, faced limited interest from retail investors in its 75 billion CFA francs bond issuance for the securitization fund. This situation compelled the South African investment bank Ninety One to take the maximum of its firm commitment.

Also, for two out of its three fundraising operations on the local capital market, Senegal only attracted the maximum number of investors for its Treasury bills with less than one year of maturity. Long-term securities received weak interest from investors, as indicated by the results published on the UMOA-Titres platform, the agency overseeing issuances in the WAEMU region.