Senegal is continuing efforts to rebuild investor confidence and restore relations with international lenders nearly two years after the discovery of billions of dollars in previously undisclosed debt plunged the West African nation into a fiscal crisis.
The crisis emerged shortly after the election of President Bassirou Diomaye Faye in March 2024, ending more than a decade of rule by former president Macky Sall.
In September 2024, Prime Minister Ousmane Sonko accused the previous administration of misrepresenting the country’s financial position and providing inaccurate fiscal data to development partners and international financial institutions.
The allegations triggered concerns among investors and lenders, prompting a review of Senegal’s public finances.
A month later, Moody’s downgraded Senegal’s sovereign credit rating to B1 from Ba3, while the International Monetary Fund (IMF) suspended a US$1.8 billion credit facility and launched an assessment of the country’s revised fiscal data.
Despite the growing controversy, Faye’s ruling Pastef party secured a parliamentary majority in November 2024, strengthening the government’s mandate to pursue economic reforms and investigate the debt discrepancies.
The scale of the problem became clearer in February 2025 when Senegal’s Court of Auditors concluded that the previous administration had significantly understated both public debt and budget deficits.
The court estimated public debt at the end of 2023 at 99.7 percent of gross domestic product (GDP), far above the previously reported 74.4 percent. The findings implied roughly $7 billion in hidden borrowing.
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The government pledged to investigate the discrepancies and initially hoped to secure a new IMF programme by mid-2025.
However, the IMF insisted that negotiations could not advance until the issue of debt misreporting had been fully addressed. The Fund also called on Senegal to reform its fiscal framework by reducing costly energy subsidies and narrowing tax exemptions.
As discussions continued, concerns about the country’s debt burden intensified.
By June 2025, banks and analysts estimated that revised debt figures had pushed Senegal’s debt-to-GDP ratio to around 119 percent. In response, Sonko announced measures aimed at increasing tax compliance and boosting domestic revenue collection to reduce dependence on external financing.
Further pressure came in July 2025 when S&P Global Ratings downgraded Senegal’s long-term sovereign rating to B-, estimating that previously undisclosed obligations could total as much as $13 billion.
The government responded by unveiling an economic recovery plan in August, promising that 90 percent of development financing would come from domestic resources while avoiding new foreign borrowing.
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Relations with the IMF remained strained. In November 2025, an IMF mission concluded without agreement on a new lending programme. International bond prices fell sharply, reflecting investor uncertainty.
Sonko publicly rejected suggestions that Senegal should restructure its debt, describing such a move as damaging to the country’s reputation and economic standing.
Nevertheless, signs of progress emerged in December 2025 when the IMF reported significant advances in discussions with Senegal while continuing an internal review into how the debt discrepancies had gone undetected.
Finance Minister Cheikh Diba expressed optimism that a new programme could be concluded quickly.
The government maintained its opposition to debt restructuring in early 2026, although disagreements with the IMF persisted. In February, Diba acknowledged that “fundamental differences” remained between both sides, even as the IMF confirmed that corrective measures relating to the debt misreporting had been agreed.
Senegal continued to meet its obligations to creditors, making a $480 million payment to international bondholders in March.
Economic prospects, however, weakened. The government projected growth of 2.5 percent in 2026, down from 6.7 percent in 2025, while the IMF forecast even slower expansion of 2.2 percent.
Political tensions also resurfaced. In May, President Faye dismissed Sonko as prime minister and dissolved the government, appointing economist Ahmadou Al Aminou Lo as the new head of government. Sonko subsequently became speaker of parliament.
The same month, Diba warned lawmakers that fuel subsidy costs could exceed budgeted allocations by as much as $2 billion this year, underscoring the continuing fiscal challenges facing the country.
The IMF said on June 4 that a mission would travel to Dakar in mid-June to continue technical discussions with Senegalese authorities, as both sides seek a path towards a new financial support programme and a resolution to one of the country’s most significant economic crises in decades.
