US$69m AfDB loan to help Senegal modernize and reform tax administration

SENEGAL – The African Development Bank Group has approved a US$68.88 million loan to Senegal to support the first phase of the Program for Supporting Resource Mobilization and Reform Effectiveness (PAMRER I).

According to AfDB, the main objective of this first phase of the program is to increase state revenue through mobilization of internal resources and expansion of the tax base.

Senegal has a goal of broadening its tax base from the current 15.3% of GDP to 20% of GDP by 2023.

AfDB also noted that the project was in line with the Senegal Emerging Plan (PSE), which the government hopes to use to position the country on a new growth trajectory.

The bank further noted that the PAMRER I project is aligned with two operational priorities of the Bank’s Ten-Year Strategy 2013-2022: Private Sector Development and Strengthening Governance.

The project also contributes to two of the Bank’s operational priorities (High 5) which are: “improving the quality of life of Africans” and “industrialization of Africa”.

“Despite the fact that Senegal enjoys political stability today, the fight against international tax evasion is a major concern for the Senegalese government, given its industrial and oil ambitions,” said Abdoulaye Coulibaly, director of the project.

Senegal’s GDP growth rate has increased from an average of 3.3% in 2009-2013 to an average of above 6% since 2015 and it managed to grow to a high of 6.7% in 2018.

 This growth, according to the AfDB is mainly due to the dynamism of all productive sectors and the consolidation of investment projects implemented under the first PES Priority Action Plan.

The PAMRER I project is a continuation of a dedicated effort by Senegal’s authority to make a substantial contribution to the implementation of the ESP by supporting reforms particularly, those aimed at improving tax administration.

As a result of these efforts, the country’s ease of Doing Business index rose from 48.08 points in 2018 to 50 points in 2022, thus enhancing the attractiveness of the country as an investment destination.

PAMRER I is part of a series of three programmatic institutional budget and reform support operations whose objective is to support Senegal’s  General Directorate of Taxes and Domains (DGID) on three major axes: modernization of the tax administration, the fight against tax evasion and the improvement of tax policy through a series of studies on sectors.

Implementation of PAMRER I will have a significant impact to the entire Senegalese population as a better tax policy will increase the resources available to the state to finance public services thus improving the living conditions of the population.

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