Senegal slashes hundreds of billions in spending to plug budget gap

The government of Senegal is implementing budget cuts worth several hundred billion CFA francs to maintain the balance of public accounts. This decision comes amid underperformance of the Plan for Economic and Social Recovery (PRES), whose expected revenues have fallen short of targets. The executive branch, led by Prime Minister Ousmane Sonko, is now working to close a budget hole that directly threatens the financial trajectory set at the start of the fiscal year.

PRES revenue shortfall deepens

Introduced as the backbone of the new administration’s fiscal consolidation strategy, the PRES was meant to mobilise additional resources to reduce the inherited deficit and fund the government’s social priorities. Early accounting reports tell a different story. Tax and non-tax revenues programmed under this plan are running significantly behind schedule, undermining the macroeconomic assumptions behind the current budget law.

The shortfall is forcing tough choices. Rather than widening the deficit or resorting to heavy new borrowing in an environment where debt costs have risen sharply, Senegalese authorities have opted for austerity. In concrete terms, hundreds of billions of CFA francs in spending authorisations are being frozen or cut across several ministerial lines, to realign outflows with actual inflows.

Budget balance under pressure in Dakar

The internal warning is clear: without immediate correction, the budget balance would be at risk. This phrase, repeated in framework documents, underscores the urgency of a response. Senegal has committed to multilateral partners—first and foremost the International Monetary Fund—to adhere to strict deficit targets under the programme agreed with Washington. Any slippage would jeopardise future disbursements and make access to international financial markets more expensive.

The regional context also plays a role. Within the West African Economic and Monetary Union (UEMOA), Dakar must keep its public deficit below 3 percent of gross domestic product, a convergence standard regularly emphasised by community institutions. Disclosures made in September 2024 by the Court of Auditors on the true extent of public debt had already led the country to renegotiate its relationship with donors. These cuts follow that same drive for fiscal transparency.

High-stakes political choices for Sonko

For the executive tandem formed by President Bassirou Diomaye Faye and his Prime Minister, the exercise is delicate. Elected on a promise of economic rupture and tangible improvement in living conditions, they must reconcile fiscal orthodoxy with strong social expectations. The cuts will inevitably affect investment spending—easier to postpone than operating costs—as well as some transfers. Several ministries are expected to see their budgets slashed to an extent not seen in recent years.

The chosen path carries political risk. Reducing infrastructure credits or sectoral subsidies in a country only emerging from a period of institutional instability could fuel discontent. Conversely, letting the deficit widen would expose Senegal to accelerated downgrades of its sovereign rating, already under watch by agencies. Moody’s and S&P Global Ratings are closely monitoring the government’s ability to keep its budget promises.

Then there is the timing question. The announced cuts must take effect before the close of the fiscal year, which requires swift implementation of spending freeze circulars and strict discipline by spending controllers. Oversight will fall mainly to the Ministry of Finance and Budget, in close coordination with the Prime Minister’s office. The ability to rebuild revenues in 2025—through more efficient tax reform and better mobilisation of internal resources—will determine how long this austerity cure lasts.

Beyond the immediate shock, this episode illustrates how narrow Senegal’s room for manoeuvre really is when it comes to financing its economic transformation ambitions. The decisions involve hundreds of billions of CFA francs and explicitly aim to safeguard the budget balance threatened by the PRES’s poor performance.