(Bloomberg) -- Senegal’s Eurobonds were among the worst performers in emerging markets after the International Monetary said it’s weighing the impact of underreported financial data on the country’s $1.5 billion program.
Dollar bonds due 2048 declined for the first time in nine days on Thursday, falling 0.3 cent to 74.7 cents on the dollar at 11:16 a.m. in London. Notes due 2033 lost 0.4 cent to 86.52 cents on the dollar.
Revisions to Senegalese budget data after the election of President Bassirou Diomaye Faye earlier this year showed the West African country’s public debt and fiscal deficit were higher than previously reported, the Washington-based lender said late Wednesday.
“Preliminary findings indicate substantial revisions to budget execution data for the period 2019-2023,” the fund said in a statement following a staff visit. “These revisions are primarily attributed to investments financed through external loans and domestic bank borrowing.”
The result of the changes is that Senegal’s fiscal deficit and public debt during the period “are now estimated to be significantly higher than previously reported in budget and settlement laws,” the IMF said.
Senegalese Prime Minister Ousmane Sonko announced last month that a review ordered by Faye found the budget deficit at the end of 2023 was more than 10% of gross domestic product, almost double the 5.5% reported under his predecessor, Macky Sall. The ratio of debt to GDP averaged 76.3% during the former president’s last five years in power — higher than the 65.9% that had originally been stated, Sonko said.
The findings prompted Moody’s Ratings to downgrade Senegal’s long-term foreign-currency ratings earlier this month to B1, four steps below investment grade. Sall rejected the outcome of the review in an interview with Bloomberg TV on Oct. 14.
“I regret the prime minister’s remarks that are false, totally false and that has led to a downgrade by Moody’s,” Sall said.
Senegal continues to face “a challenging environment” with budget execution showing signs of further strain, the IMF said in Wednesday’s statement. A revenue shortfall reported following an earlier visit continued through end-September, with the fiscal deficit set to exceed the previous estimate of 7.5% of GDP, it said.
“Looking ahead, it is critical for the authorities to implement bold and timely measures to ensure fiscal sustainability and put public debt on a downward trajectory,” the IMF said.
--With assistance from Moses Mozart Dzawu.
(Updates with bond move from first paragraph.)
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