Senegal making progress on graft, governance -U.S.

Wed Jun 15, 2011 11:20am EDT

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* Senegal made progress on governance - U.S. ambassador

* West African nation has earned market confidence

By Bate Felix

DAKAR, June 15 (Reuters) - Senegal has made progress fighting corruption and establishing good governance practices, earning it the confidence of investors and ratings agencies, the outgoing U.S. ambassador said on Wednesday.

Marcia Bernicat warned the West African nation last year after a series of corruption scandals that U.S. aid, including the $540 million Millennium Challenge Corporation grant, depended on its anti-graft efforts. [ID:nLDE64Q2HI]

"I think we have seen enormous progress made and it has been documented by the IMF that the government of Senegal has done (well)," Bernicat told journalists in Dakar.

Senegal has enjoyed a better reputation for governance than many of its regional peers, but was hit last year by graft allegations after admitting it gave an outgoing IMF representative a cash gift of about $172,000.

Bernicat said she was encouraged by growing public dialogue over governance and added that citizens' demands for accountability were being met and institutions were in place to keep a check on government actions.

"I think that is the strongest proof that progress has been made. I'm satisfied that the progress will continue," she said.

She added the decision by U.S. firms IBM (IBM.N), Ford Motors (F.N) and Google (GOOG.O) to open offices in Senegal was a sign of growing confidence and recognition of the country as a West African regional hub.

Senegal's minister for the economy and finance, Abdoulaye Diop, said the country will continue to improve efforts on good governance of its public finances and macro-economic system, which have earned it good ratings from agencies.

Standard & Poor's affirmed Senegal at B+/B, outlook still negative, in April and assigned a B+ rating to its $500 million long-term senior unsecured bond in May. Moody's meanwhile assigned the country a first-time rating of B1 with outlook stable in April. [ID:nWLA8781] [ID:nWLA9688] [ID:nWLA4852]

Diop said the ratings showed Senegal was trusted by financial institutions and as proof, its $500 million bond SN047485975=RRPS was oversubscribed.

"We issued a debt of $500 million because we needed just that, but in fact we had demand which was above our expectations. $2.4 billion was proposed but we took just $500 million so as to be prudent with our debt," Diop said.

(Editing by Richard Valdmanis and Jan Harvey)

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