S&P cuts Senegal outlook to negative

Standard & Poor's said it revised its outlook on Senegal to negative from stable, due to a deterioration in the prospects for public finances.

At the same time, the B+ long-term and B short-term foreign and local sovereign credit ratings on Senegal were affirmed, the agency said.

S&P added that the prospects for Senegal's public finances could deteriorate markedly for two main reasons, noting that the first, in the short term, is commitments in the form of guarantees made by the government in the wake of a financial crisis at one of Senegal's leading companies, Industries Chimiques du Sénégal.

More important is the continued subsidization of domestic fuel in the context of rising global oil prices, which poses the risk of a long-term deterioration in government finances, the agency said.

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