The International Monetary Fund (IMF) on Monday approved $650 million aid to Senegal to enhance the country’s COVID-19 recovery.
The IMF said the approval is happening after an earlier payment of $442 million to Senegal in April 2020, to cushion the economic effects of the coronavirus pandemic.
The pandemic has hit the Senegalese economy hard and caused growth to contract to an estimated 1.5% in 2020 from 5.3% in 2019, the IMF said. The Fund expects a modest recovery in 2021 with growth reaching 3.7% and forecast to reach 5.5% in 2022.
The IMF announced that the $650 million is expected to be cleared over a period of 18 months, with an immediate disbursement of $187 million.
“The 18-month arrangements is targeted at providing a policy anchor for the next phase of the authorities’ COVID-19 response and support a strong and job-rich recovery,” it said.
Senegal disclosed last week that it plans to raise $500 million from the debt market to create jobs for young people as part of a response to riots in March. It also issued 775 million euros in Eurobonds.
Senegal, one of Africa’s most stable democracies, was rocked by its worst unrest in a decade in March after the arrest of a popular opposition politician triggered an explosion of pent-up anger over economic hardship.
Senegal has brought COVID-19 cases under control in the last few months, ramping up its vaccination drive, but there is a risk of a third wave, the IMF said. The health ministry has recorded 41,725 cases and 1,150 deaths from coronavirus.