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By Alistair Thomson
DAKAR, Jan 14 (Reuters) - Slowing activity, government overspending and high oil and food prices have cut economic growth in Senegal, the IMF said on Wednesday, amid signs a global slowdown is taking a heavy toll on African nations.
Many African countries had appeared shielded from the earlier effects of the financial crisis in developed economies.
But since the crisis spread from banks to the broader economy, sapping global demand for Africa's commodities exports and scuppering planned foreign investments, more countries are looking to the International Monetary Fund for urgent help.
Last month, the IMF approved a $75.6 million, one-year funding deal from its Exogenous Shocks Facility (ESF) to help Senegal cope with higher food and energy prices.
Last week, Democratic Republic of Congo said it would accelerate its own efforts to secure a $200 million ESF loan as it faces a slide in its franc currency following a collapse in demand for its key metals exports and mining investments.
The IMF said Senegal's overspending, a downturn in economic activity and last year's high fuel and food prices had cut 2008 economic growth to as low as 3.9 percent, down from a 4.3 percent forecast in the Fund's October World Economic Outlook.
"The budgetary slippages have begun to affect the economy. Activity in certain sectors, including construction and real estate, is slowing, banks' non-performing loans are on the rise, and tax collections are lagging," the IMF said in a statement.
"Together with the effect of higher oil and food prices on consumption, this may lower economic growth in 2008 to 3.9 percent," it said.
However, economic growth should recover to average 5.5 percent a year between 2009 and 2013, it said, helped by last year's $100-million relaunch of the country's biggest company, phosphates producer Industries Chimiques du Senegal (ICS), by majority owner IFFCO, an Indian farmers' fertiliser cooperative.
PRONOUNCED RISK OF DOWNTURN
"Although the global economic and financial crisis has so far had limited impact on Senegal, its effects may be felt in the months ahead through various channels," the IMF said.
The global economic slowdown and the huge bailout packages being approved by developed countries threatened to reduce the amount of available foreign aid, which accounted for 2 percent of Senegal's gross domestic product (GDP), the IMF said.
"A pronounced economic downturn in Europe would likely dampen remittances -- running at 8 percent of GDP per year -- and affect economic activity, such as in construction," it said.
Besides ICS, Senegal has a thriving port and a nascent gold- and iron ore-mining industry, though social tensions have risen as economic pressures have grown over the past year.
Last week, 18 youths were jailed for between five and 10 years over riots last month in the remote mining town of Kedougou triggered by frustration over unemployment and a perceived lack of benefits from foreign-owned mines in the area.
At least one person was shot dead during the riots.
The IMF said it had also agreed a plan of action by Senegal to rein in state spending after the Finance Ministry identified 74 billion CFA francs of unbudgeted spending, representing more than 1 percent of gross domestic product (GDP).
President Abdoulaye Wade promised in November to repay, by Jan. 31, domestic debts owed mainly to local firms that the IMF said totalled 225 billion CFA ($453 million). France agreed to lend Senegal 125 million euros ($165.6 million) of that.
"Should payment delays not be settled speedily, Senegal may enter a pronounced economic downturn. This may be exacerbated by the global economic and financial crisis," the IMF said. ($1=497.0 Cfa Franc) ($1=.7547 Euro) (Reporting by Alistair Thomson; Editing by Pascal Fletcher and Stephen Nisbet)