By Katarina Höije Senegal’s prime minister said he expects to resolve a stand-off over the country’s budget within days, as the authorities seek approval for a new International Monetary Fund program as soon as next month.

President Bassirou Diomaye Faye’s administration is at odds with the largest party in parliament, led by former premier Ousmane Sonko, over revisions to the government’s spending plans. Lawmakers are scheduled to review the proposals later on Tuesday as talks with the government continue, with a vote likely to take place later this week or early next week, Prime Minister Ahmadou Alhaminou Lo said in an interview.

Delays to the reworked budget risk derailing a debt-restructuring effort under way in the West African nation. The government is seeking to restore fiscal sustainability and win IMF board approval for a proposed $2.2 billion program.

The Senegalese authorities must control spending to get IMF board sign-off on the new program, which was agreed in principle in September and will replace a facility the Washington-based lender suspended in 2024 after the discovery of billions of dollars of hidden borrowing.

Lo at the weekend raised the prospect of using a constitutional provision to end the budget impasse. For now, the government is committed to a negotiated solution, Lo said in the capital, Dakar, on Monday. Senegal’s constitution allows the government to adopt a finance bill unless lawmakers defeat it in a motion of no confidence.

“We are all focused on reaching an agreement,” Lo said. “We don’t need to resort to any provision of the constitution.”The budget standoff has precipitated a slump in Senegal’s eurobonds, which have lost as much as three cents as investors ponder the next steps. Notes due in 2033 and 2048 trade around 49 cents on the dollar, while securities due in 2031 trade at 50 cents.

Financing assurances for the proposed IMF program are nearing completion, while a contract for an audit aimed at understanding how the country’s debt was misreported is expected to be signed this week, Lo said.

An outstanding international audit of Senegal’s liabilities has complicated the timetable for IMF board approval, Bloomberg previously reported.

The revised budget will tighten controls on public finances by limiting transfers made outside normal budget procedures and banning so-called comfort letters from the state guaranteeing borrowing by semi-public companies, Lo said. Those measures would help correct practices that may have contributed to the misreporting of public debt, he said.

Senegal kicked off talks with creditors including international bondholders last month on a debt treatment under the Group of 20’s Common Framework. The government is confident it can reach an agreement in 2027, Lo said, describing the expected timetable as “very tight.”Read More; Senegal’s Quickfire Debt Workout Plan Faces Speedbumps Senegal will continue to roll over maturing debt on the regional market, while seeking to lower borrowing costs as it works to restore investor confidence, Lo said.

“We hope that interest rates will come down as we restore a macroeconomic and budgetary framework that reassures investors about Senegal’s ability to meet its commitments,” Lo said. “If you secure your financing assurances, in principle, you have no reason to rush to the external markets.”