President Bassirou Diomaye Faye’s Pastef party is poised to secure an absolute majority in Senegal’s legislative elections, a result that would empower him to pursue his ambitious 25-year reform agenda. However, his administration’s immediate challenge lies in navigating a fiscal crisis and formulating a budget that balances voters’ demands with International Monetary Fund (IMF) requirements.
The parliamentary majority, sought by Faye in Sunday’s vote, would enable the implementation of the sweeping reforms that propelled him to a landslide victory in the March presidential election. Opposition leaders, including former President Macky Sall and ex-Prime Minister Amadou Ba, conceded defeat on Monday, acknowledging Pastef’s win.
Fiscal Challenges Loom
Senegal’s economic outlook remains precarious. In September, a government audit revealed that the country’s debt and budget deficit were far larger than previously reported. This has stalled disbursements from a $1.9 billion IMF program agreed upon in June 2023, with negotiations unlikely to conclude before mid-2025.
Despite the fiscal challenges, Senegal’s sovereign debt rose in value on Monday, a sign of investor optimism about the Pastef government’s ability to manage the economy. Tradeweb data showed the yield on Senegal’s 2033 dollar bond fell to 9.28%, bucking trends across African markets.
Balancing Reforms and Public Demands
While the Pastef majority offers political stability, analysts caution that economic reforms may test public patience. “Voters are looking for quick solutions to unemployment, the rising cost of living, and the limited reach of public services in rural areas,” said Wendyam Lankoande, a consultant at Africa Practice.
Leeuwner Esterhuysen, a senior economist at Oxford Economics Africa, noted that IMF negotiations would likely influence Senegal’s budget for 2025. “We see Pastef’s majority as a positive development as it clears the path for President Faye and Prime Minister Ousmane Sonko to craft a budget aligned with IMF requirements,” Esterhuysen said. However, he warned that measures such as phasing out energy subsidies and increasing household electricity prices could face public resistance.
The IMF is expected to work closely with the new administration and may grant some flexibility. “Delaying VAT exemptions removal for farming inputs and gradually phasing out energy subsidies could limit the impact on consumers,” Esterhuysen added.
A Long-Term Vision
Faye’s 25-year agenda includes structural reforms aimed at fostering economic growth and addressing systemic issues such as unemployment and infrastructure deficits. With a legislative majority, his administration is expected to prioritize fiscal consolidation while seeking to maintain public support through gradual reforms.
As Senegal enters this critical phase, the Pastef party’s victory marks a turning point in the country’s political and economic trajectory, with both domestic and international stakeholders closely monitoring its next steps.
