Senegal Begins 3-Year IMF Program That Aims to Increase Taxes

Senegal began a three-year monitoring program with the International Monetary Fund on Dec. 4 that aims to increase state revenue to finance energy and road improvements, the IMF said in a statement posted on its website.

The agreement, which follows a two-year, $178.8 million program with the Washington-based lender, will allow the West African nation to widen its fiscal deficit to fund rural electrification and irrigation projects.

By 2013, Senegal will reduce budgetary expenditures by at least 1 percentage point of the country’s gross domestic product, while widening its tax base with a new tax code to be announced next year, the statement said. Norbert Funke, IMF division chief, said in a July 6 interview that the country should increase revenue to between 20 percent and 22 percent of gross domestic product by 2015, from 18.5 percent now.

Growth in Senegal is expected to accelerate to 4.4 percent in 2011, from 4 percent this year, the IMF said.

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