(Ecofin Agency) - Senegal's President Diomaye Faye believes that a complete overhaul of the country’s financial and accounting institutions is crucial to bring about a real shift in economic and financial governance.

Senegal's President Bassirou Diomaye Faye has called for a new regulation on the conditions and methods of issuing government bonds, along with a more efficient organizational framework to manage and oversee public debt. The announcement was made during the Cabinet meeting on February 19.

Faye emphasized the importance of tight control over public finances for the next three years. He highlighted several key areas, including optimizing budget programs, improving financing plans, managing cash flow and tax expenditures effectively, and increasing oversight of public debt. He also urged the "swift preparation" of a revised financial law for 2025.

This move comes amid findings from a recent Court of Auditors report, which revealed that central government debt had reached 99.67% of GDP by the end of 2023, far higher than the 74% reported by the previous administration. The audit also showed a real budget deficit of 12.30%, compared to the 4.90% declared by officials.

The report uncovered financial irregularities, leading to the suspension of IMF disbursements while the government provides clarifications. In October 2024, credit rating agency Moody's downgraded Senegal's rating due to worsening fiscal conditions and rising public debt.

Aware of these challenges, President Faye is pushing for a deep reform of Senegal's financial and accounting institutions, aiming to establish a more transparent and efficient economic and financial governance system.

In recent years, Senegal has raised significant funds in both international and regional financial markets. As part of its debt management strategy, the new administration is adopting a more cautious approach, prioritizing concessional financing and carefully selecting investment projects. The goal is to increase the share of debt in local currency to 59% by 2027, thereby reducing reliance on external financing and mitigating exchange rate and interest rate risks. Among the financial instruments being considered are "Diaspora Bonds" and strengthening the domestic market, aiming for a boost of CFA1,500 billion ($2.39 billion).