AfDB and Senegal Sign CFAF 23 Billion Loan Agreement for Budget Support Programme
Tunis, December 22, 2008 -The African Development Bank (AfDB) Group and Senegal on Monday, December 22, 2008, in Tunis signed a loan agreement worth UA 30 million, equivalent to CFAF 23 billion, to support a poverty reduction strategy programme in the country which had been approved on the same day by the AfDB Board of Directors.
The agreement was signed by the AfDB Vice President for Sector Operations, Zeinab El-Bakri, and the Senegalese Ambassador in Tunisia, Sherif Oumar Diagne. Speaking during the event, Mrs. El-Bakri recalled that Senegal’s public finances had experienced challenges due to external factors. While approving the programme on Monday, the Board said it was satisfied with the government’s expressed determination to pursue corrective measures taken to address the situation. The Senegalese Ambassador, for his part, thanked AfDB senior management on behalf of his government, especially "for the special measures taken by your institution to ensure the first installment of CFAF 15 billion is disbursed before December 31, 2008." He expressed his "country’s gratitude for the gesture made by the AfDB, only 72 hours after the IMF approved the second review of the ISPE and that of the Facility against external shocks."
The loan, which will be disbursed in two instalments, is budget support to strengthen public finance management and improve the business climate.
The programme’s goal is to support the implementation of the poverty reduction strategy under the 2006-2010 Second Poverty Reduction Strategy Paper (PRSP II) adopted by the government in July, 2006. Specific objectives include ensuring better public resource allocation and contributing to the promotion of the private sector.
The programme will contribute to the reinforcement of operational capacities in the financial management of the Economy and Finance Ministry, as well as bodies in charge of developing markets.
Generally, the key beneficiaries of the programme will be the people of Senegal, and, more specifically, the poorest segments of the society to whom the government will devote more resources under poverty reduction programmes through enhanced management of public resources. On the other hand, the improvement of the business climate will be beneficial to businessmen, who will be more inclined to engaging in new wealth and job-creating investments.
The Bank has solid experience in supporting public finance reform in Senegal, especially under the Private Sector Adjustment Support Programme. This explains why it is considered co-leader with the World Bank in providing support for budget and financial reforms under the Budget Support Framework Arrangement signed in January 2008 by a number of development partners, including the AfDB.
Since starting operations in Senegal in 1972, the AfDB has financed 76 operations for US$1.033 billion or CFAF 486 billion.
*1UC = US$1.48797 = CFAF 766,91
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