On September 5th, 2018, the Board of Directors of the African Development Bank approved a partial credit guarantee for the Republic of Senegal to help hedge currency risk arising from Eurobonds. This innovative operation aims to support the Senegalese government's efforts to improve the predictability of its debt servicing and enhance prudent management. It will therefore help consolidate Senegal's macroeconomic stability and the deployment of the Plan Sénégal Emergent (PSE).
Adopted in 2014, the PSE is Senegal's national development strategy, which has the vision of promoting an "emerging Senegal in 2035, as a socially responsible society and a state of law." The PSE is structured around three pillars: structural transformation of the economy; human capital, social protection and sustainable development; and governance, institutions, peace and security. The PSE is rolling out high-impact development projects and programs in key sectors such as agriculture, energy, infrastructure, construction and housing.
"With this guarantee operation, the Bank's support to Senegal aims to reduce the costs and currency risks associated with large amounts of financing required to implement the PSE," Pierre Guislain, Bank Vice-President for Private Sector, Infrastructure and Industrialization, said. This intervention is in line with the Bank's Country Strategy Paper 2016-2020 or Senegal, the Bank's Financial Sector Development Policy and Strategy Paper 2014-2019 and its High 5 agenda.
The Bank is a key partner in the structural transformation of the Senegalese economy. The Bank supports strategic sectors such as transport and energy infrastructure, water and sanitation, agriculture, social sector and governance. This guarantee reinforces its active presence in Senegal.
To date, the Bank's cumulative commitments in Senegal. amount to about US$1.165 billion, spread across 26 ongoing operations, reflecting the strength of ties between Senegal and the Bank.