The announcement follows an earlier payment of $442 million to Senegal in April 2020, also to mitigate the economic effects of the coronavirus pandemic, the IMF said.
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 $650 million will be paid over 18 months, with an immediate disbursement of $187 million, the IMF said.
“The 18-month arrangements … will provide a policy anchor for the next phase of the authorities’ COVID-19 response and support a strong and job-rich recovery,” it said.
The West African country said 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 to date.