Sénégal LFR 2026: Ahmadou Lô Details Budget Cuts Amid Shortfalls

• The Senegalese government proposes a revised 2026 budget due to lower-than-expected revenues and unmobilized external financing.
• Prime Minister Ahmadou Alhaminou Mohamed Lô announced a 295 billion FCFA deferral of expenses and a 300 billion FCFA allocation for state arrears.
• Key public investments, including several hospitals and infrastructure projects, are postponed until 2027.
• The proposed Loi de finances rectificative 2026 Sénégal faces scrutiny over discrepancies in budget figures and project selection criteria.
• Only a portion of the 1,956 billion FCFA in total state arrears will be addressed by the 300 billion FCFA allocation.

The deferral of investissements publics reportés Sénégal until 2027 also raises concerns about their eventual realization.

The Senegalese government, led by Prime Minister Ahmadou Alhaminou Mohamed Lô, has introduced a proposed Loi de finances rectificative (LFR) 2026, which includes significant budgetary adjustments. These measures, defended by the Prime Minister in a press conference on Sunday, October 25, stem from two primary financial challenges: lower-than-anticipated revenues from the Plan de Redressement Economique et Social (PRES) and the failure to mobilize certain external financing. Despite these justifications, the proposed LFR 2026 was rejected in commission, raising questions about the government's fiscal strategy.

Central to the revised budget are decisions to report 295 billion FCFA in planned expenditures and to allocate 300 billion FCFA towards settling a portion of the state's outstanding arrears. The Prime Minister indicated that the PRES revenues reached only 173 billion FCFA by the end of September, a figure that significantly impacted the government's ability to fund initially programmed expenses. This shortfall, combined with 239 billion FCFA in unmobilized external funds, necessitated a re-evaluation of public spending priorities, leading to the current Sénégal LFR 2026 coupes budgétaires.

The financial constraints have led to a clear distinction between projects deemed secure and those facing deferral. The government has stated its intention to preserve projects that benefit from secured financing. For instance, over 110 billion FCFA from the collected PRES revenues are earmarked for university projects, critical health infrastructure, and the Ziguinchor airport. This suggests a strategic prioritization of certain sectors within the Ahmadou Alhaminou Mohamed Lô budget.

Conversely, a number of significant public investments are now slated to be postponed until 2027. These include the construction of hospitals in Mbour, Kaolac, Ziguinchor, Saint-Louis, and Matam, alongside the Touba sanitation program, various agropoles, and specific school infrastructure projects. This extensive report dépenses publiques Sénégal highlights the scale of the fiscal adjustments. Furthermore, while 300 billion FCFA is designated for clearing state arrears, this represents only a fraction of the total 1,956 billion FCFA owed by the state, indicating a persistent challenge with arriérés État Sénégal.

The proposed Loi de finances rectificative 2026 Sénégal has prompted several inquiries regarding its scope and the rationale behind specific decisions. For example, the LFR outlines a 555 billion FCFA reduction in investment spending. However, the combined total of the 295 billion FCFA in reported expenses and the 239 billion FCFA in unmobilized external financing amounts to 534 billion FCFA, leaving an unexplained difference of 21 billion FCFA. Similarly, with 173 billion FCFA collected from PRES revenues and over 110 billion FCFA allocated to specific projects, the destination of the remaining approximately 63 billion FCFA has not been clarified.

The deferral of investissements publics reportés Sénégal until 2027 also raises concerns about their eventual realization. While these projects are expected to be "re-examined" for priority inclusion in the 2027 budget, this does not constitute a firm commitment. The actual resumption of these projects will depend on future budgetary decisions, resource availability, and the adoption of the subsequent annual budget. The perceived inconsistency in project selection, such as the Ziguinchor airport being funded while the Ziguinchor hospital is deferred, further underscores the need for greater transparency regarding the criteria used for these critical budgetary arbitrages.

Lawyers advising clients on public contracts or infrastructure projects in Senegal should assess the impact of these budget reallocations and deferred investments on existing or prospective agreements, particularly regarding project timelines and payment schedules. Companies awaiting payment from the state should also monitor the planned allocation for arrears.

Source: Original reporting via undisclosed source