Senegal's budget deficit widens to $709m in first quarter 2024
TLDR
- Senegal's Q1 2024 public finances: low revenues and moderate expenditure increase led to a budget deficit of 427.1 billion FCFA ($709 million).
- Revenues rose by 1.7% to 775.3 billion FCFA, with tax revenues contributing 95% and growing by 3.9%.
- Non-tax revenues declined by 22.9% to 36.6 billion FCFA, mainly from reduced collections in field revenues and dividends.
Senegal's public finances showed a mixed performance in early 2024, characterized by low revenues and a moderate rise in expenditure, resulting in a slight increase in a Q1 budget deficit of 427.1 billion FCFA (c. $709 million), slightly higher than the 426.6 billion FCFA recorded in Q1 2023.
Revenues rose by 1.7%, reaching 775.3 billion FCFA while expenditures rose by 1.3%, totaling 1,202.4 billion FCFA. Tax revenues, accounting for 95% of total revenues, grew by 3.9% to 738.6 billion FCFA, driven by strong performances in domestic VAT excluding oil, corporate tax, import VAT, and the FSIPP.
In contrast, non-tax revenues, which make up 5% of total revenues, declined by 22.9% to 36.6 billion FCFA, mainly due to reduced collections from field revenues (-61.4%) and dividends (-66.2%).
Key Takeaways
The slight increase in Senegal's budget deficit amid mixed revenue and expenditure performance indicates a cautious fiscal environment. However, the rise in tax revenues and proactive measures to finance the deficit through the public securities market suggest opportunities for investors. Investors can capitalize on this trend by considering government securities, which the state has used to raise funds despite the pre-electoral crisis. Additionally, sectors benefiting from strong tax performance, such as corporate and import-related industries, may present investment opportunities. By focusing on government-backed securities and thriving sectors, investors can potentially maximize returns while contributing to the country’s fiscal stability.
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