Senegal: Tax revenues remain 10% below pro-rated target in Jan-Sep

• Tax revenue collection stands at 62% of full-year projection
• Spending on the other hand overshoots the pro-rated full-year projections
• Report indicates only minor revisions were made to spending as of end-Q3, including XOF 50bn hike of current transfers
• Govt last week released the draft 2025 budget law, indicating the 2024 budget deficit is seen at 11.6% of GDP, triple the initial target

Budget revenues mobilized in January - September 2024 amounted to XOF 2,887bn (inclusive of grants), or about 62% of the full-year target envisaged in the budget (XOF 4,694bn), according to the Q3 budget execution report published by the finance ministry. The underperformance was attributed to shortfalls in both tax and non-tax revenue collection, as well as grants.

In the breakdown, the govt collected XOF 2,656bn in taxes, representing 90% of the target for the period set at XOF 2,961bn, and 64% of the full-year target (XOF 4,180bn), according to the report. In y/y terms, tax revenue collection was up by 6%. Non-tax revenue collection stood at XOF 135bn, likewise below the period target of XOF 180bn and down by 7% y/y.

Budget execution on the expenditure side was on the other hand faster, exceeding the pro-rated projections for the period. According to the document, Q3 saw revisions to the open credits, though these had minor impact on the overall expenditure, as XOF 50bn upwards revision to current transfers was offset by a XOF 35bn cut to development expenditure and XOF 14bn cut to acquisition of goods and services. Total budget expenditure during the review period was reported at XOF 4,571bn on payment order basis (the one monitored by the IMF) against authorized expenditure of XOF 5591bn for the full year (inclusive of the initially budgeted expenditure and XOF 57bn worth of carry overs). The implementation rate was faster for development spending (88% of the full-year target vs. 77% for recurrent spending). Under recurrent expenditure, current transfers slightly exceeded the prorated revised Q3 target, reaching XOF 992bn (76%) while debt interest payments almost reached the full-year target (table below).

We recall the government last week released the draft 2025 budget law, indicating the 2024 budget deficit is expected to reach 11.6% of GDP, almost triple the initial projection (3.9%) on the back of revenue shortfalls and significant upward revision of development expenditure, likely aligning it with the alleged provisional audit findings.