Senegal is to rework its public debt as part of a proposed 2.2 billion US dollar (£1.7 billion) International Monetary Fund programme, two years after undisclosed borrowing triggered a financial crisis and brought its previous support package to a halt.
The plan was announced by economy and finance minister Cheikh Diba alongside a new Senegal Debt Treatment Plan. The government says the initiative is intended to reduce the cost of servicing its liabilities and restore room for investment, although it insists the measures do not amount to a conventional debt restructuring.
The IMF said on Tuesday September 1 that its staff had reached a preliminary agreement with Senegal on a 36-month Extended Credit Facility arrangement worth about 2.2 billion dollars. The agreement still requires approval from the fund’s management and executive board, as well as financing assurances from the World Bank, African Development Bank and other partners.
Senegal’s debt problems emerged in September 2024, when the newly installed government said an audit had uncovered billions of dollars in public borrowing that had not been disclosed by the previous administration.
The IMF estimates the additional debt at more than 11 billion dollars, while some analysts have put the figure nearer 13 billion. The revelation pushed Senegal’s debt-to-gross domestic product ratio to about 130 per cent, prompting the IMF to suspend an existing 1.8 billion-dollar programme and contributing to a sell-off in the country’s bonds and a series of credit-rating downgrades.
Government data show that public debt, excluding borrowing by state-owned companies, stood at 23.67 trillion CFA francs, equivalent to about 42.1 billion dollars, at the end of 2024. That represented 119 per cent of GDP, although the IMF’s broader calculation rises to roughly 131 per cent when state-related liabilities and arrears are included.
Almost a third of the debt was last reported to consist of CFA franc-denominated bonds and loans issued in Senegal and across the West African Economic and Monetary Union. The government has indicated that this domestic and regional debt will not be included in the treatment, a position that could limit the options available for dealing with the remainder.
About half of Senegal’s external debt is owed to multilateral institutions, development banks and other governments, largely on concessional or semi-concessional terms. Commercial lenders, including banks, pension funds and hedge funds, hold much of the balance, with international bonds accounting for more than 7 billion dollars.
Why Senegal’s debt plan is unusual
The proposed treatment is expected to use an amended version of the G20-backed Common Framework, which is designed to bring official and private creditors into a single process for restructuring the debts of countries in difficulty.
Senegal’s exclusion of CFA franc debt makes the case more complex. The country shares its currency, central bank and regional financial market with other members of the monetary union, including Ivory Coast and Benin, meaning any attempt to alter that debt could have consequences beyond Senegal’s borders.
Diba said the treatment would be an “improved” approach rather than a restructuring “in the classic sense of the term”. The precise arrangements, including how certain financing instruments known as total return swaps will be handled, have yet to be set out.
The government had initially relied on regional borrowing and retail bond sales after the IMF programme was suspended. But tighter fiscal conditions, weaker investment and higher energy costs have made that strategy increasingly difficult to sustain.
The IMF said Senegal’s economy grew by 6.7 per cent in 2025 as oil production entered its first full year, although growth outside the hydrocarbons sector slowed to 2.2 per cent. The finance ministry has projected overall growth of 2.7 per cent in 2026, down from the previous year.
Senegal’s government says its reforms have already reduced the budget deficit from 13.4 per cent of GDP in 2024 to 6.4 per cent in 2025. The IMF-backed programme is expected to focus on restoring debt sustainability, strengthening financial transparency and protecting social spending while the new debt plan is developed.
