Senegal's draft Initial Budget Act (IBA) for 2025 provides for expenditure of FCFA 6,614.8 billion, an increase of FCFA 859.4 billion compared with the 2024 IBA (FCFA 5,755.4 billion). This represents an increase of 14.9% in relative terms. The explanatory document stresses that this increase is part of a process of "catching up with the 2024 financial year, which was severely impacted by socio-political tensions in the first quarter of 2024 and by the economic slowdown during the rest of the year, excluding the energy sector".
Hydrocarbons: still a faint hope for public finances
Despite the development of oil and gas resources, their direct contribution to the State budget remains modest. According to forecasts, revenue from hydrocarbons will reach FCFA 72.53 billion in 2025, or less than 1% of the FCFA 6,395 billion forecast for the total budget. These projections are based on the world economic outlook published by the IMF in October 2024, which forecasts hydrocarbon revenues rising to FCFA 49.65 billion in 2024, FCFA 87.87 billion in 2026 and FCFA 155.20 billion in 2027.
A precise breakdown of hydrocarbon revenues
For the year 2025, the FCFA 72.53 billion from hydrocarbons will be broken down as follows:
– 50,85 milliards de FCfa (70 %) iront au budget général de l’État.
– 21,68 milliards de FCfa (30 %) seront affectés aux Comptes spéciaux du Trésor, comprenant 7,25 milliards de FCfa pour le Fonds intergénérationnel (10 %) et 14,43 milliards de FCfa pour le Fonds de stabilisation (20 %).
This allocation reflects a desire to manage extractive resources prudently and sustainably, with a focus on economic stability and savings for future generations.
Tax reforms in the pipeline
The government intends to take advantage of the 2025 budget year to "thoroughly overhaul" its tax and customs systems. Reforms to the General Tax Code and the Customs Code are among the priorities. The aim is to increase tax revenues and improve the mobilisation of domestic resources, with a projected increase of 20% compared with the situation at the end of 2024 and 3.6% compared with the initial forecasts for 2024.
Economic growth expected, but slow
Those who hoped that the exploitation of hydrocarbons would be a rapid lever for economic growth may be disappointed. Despite the prospect of rising revenues between now and 2027, the impact of hydrocarbons on the daily lives of the Senegalese people remains limited. For the time being, the country must rely on other sources of financing to support its development ambitions.
However, indirect spin-offs are expected in the medium term, particularly in sectors such as electricity ("gas to power"), fuels and services linked to the oil industry (technical, legal, manufacturing, financial, etc.). For the moment, these potential spin-offs remain at the stage of projections, leaving the national economy waiting for a real transformation.