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afrol News, 8 April - The International Monetary Fund (IMF) today announced it had completed its "second review" under Dakar's "Poverty Reduction and Growth Facility (PRGF) arrangement" and approved a US$ 11 million disbursement. The credit is to finance Senegal's implementation of its poverty reduction strategy. Senegal's three-year PRGF arrangement was approved by the IMF in April 1998 for US$ 134 million, and so far, Senegal has drawn US$ 109 million. The conditional IMF loan is reviewed annually to see whether the low-income country is thoroughly following up its poverty reduction strategy, produced under guidance by the IMF itself. The Executive Board of IMF announces it had "discussed Senegal's performance" under its review, thus deciding to approve the country's third disbursement. Acting IMF Chair, Eduardo Aninat, stated that Senegal's macroeconomic performance in 2001 had "continued to be characterised by rapid growth and low inflation. Despite the emergence of important financial imbalances in the groundnut and power parastatals, covered by budgetary transfers, the overall budget deficit, excluding grants, was contained at less than 4 percent of GDP, in part through a delay in investment expenditure." He encouraged "further private sector involvement, and pave the way for the scheduled privatisation of the groundnut marketing company (SONACOS) by mid-2003." Further, to continue to receive poverty reduction aid, Senegal needed to go on with more privatisation. A possible privatisation of the power utility (SENELEC) was specially mentioned by Aninat, who asked for "timely investments to expand SENELEC's capacity." The Senegalese the government had only re-purchases SENELEC shares held by the Hydro-Québec/Elyo group in early 2001 after the company had experienced " financial problems" (Cheikh Hadjibou Soumaré, Minister Delegate in charge of the Budget and Housing). Due to the extensive cooperation with the IMF, Senegal is already engaged in privatising the Dakar-Bamako railway - connecting the Senegalese and Malian capitals - SODEFITEX, a national cotton company; and MSAD, a tapestry company. Aninat however also tempted with addition funds through the resources that would be freed up under the enhanced Heavily Indebted Poor Country (HIPC) Initiative if Senegal continued on these structural reforms and "lay a sound foundation for future [IMF] support." - To sustain the investment in the social sectors, it will be important to speedily implement the conditions for reaching the completion point under the HIPC Initiative-especially improving the size and quality of basic social services, Aninat stated. "In the meantime, the [IMF] will continue to support Senegal's efforts to reduce poverty by extending the interim assistance under the HIPC Initiative until end 2002," he added.
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