Senegal is confident it will soon conclude a new loan programme with the International Monetary Fund, its finance minister said, as the West African country seeks to restore credibility with international lenders after a financing freeze triggered by undisclosed debts.
“We hope to finalise a programme with the IMF very soon,” Finance Minister Cheikh Diba told parliament on Tuesday, saying technical discussions were advancing on key sticking points including fiscal adjustment, debt management and the revision of macroeconomic data.
Senegal has been without IMF financing since 2024, when a US$1.8 billion programme was suspended following the discovery of previously undeclared public debts accumulated under the former administration.
The IMF said at the time that the additional liabilities pushed Senegal’s public debt to nearly 132 percent of gross domestic product by the end of 2024, far above earlier estimates and well beyond levels considered sustainable for an emerging economy.
The revelation dealt a blow to Senegal’s reputation for prudent macroeconomic management and prompted the IMF to freeze disbursements while it assessed the scale of the problem and the reliability of official data.
Since then, the government that took office earlier this year has been engaged in efforts to rebuild trust with the Fund and international partners, pledging greater transparency and reforms to public finance management.
Diba told lawmakers that talks with IMF staff were ongoing and covered “sensitive issues”, notably the correction of macroeconomic statistics, the pace and scope of fiscal adjustment, and strategies to manage and reduce the debt burden.
In December, the IMF said it had made “significant progress” in discussions with Senegal, while confirming that it was continuing an internal investigation into the failures that led to the underreporting of the country’s debt.
The Fund has said the investigation aims to draw lessons to prevent similar breakdowns in data reporting and oversight in future programmes.
Officials in Dakar hope the arrival of a new IMF mission chief for Senegal, expected in January, will help accelerate negotiations and pave the way for a new agreement.
The tone adopted by the finance minister contrasts with that of Prime Minister Ousmane Sonko, who has recently taken a more confrontational stance towards the IMF.
Sonko has criticised what he described as pressure from the Fund to restructure Senegal’s debt, an option the government says it rejects, arguing that restructuring could damage the country’s standing in financial markets and raise borrowing costs.
Diba, by contrast, struck a more conciliatory note, emphasising dialogue and the government’s commitment to restoring confidence while safeguarding economic sovereignty.
Analysts say reaching a new IMF programme is seen as crucial for Senegal, not only for access to concessional financing but also as a signal to other lenders and investors.
An IMF-backed programme typically acts as a seal of approval, unlocking funding from multilateral institutions, bilateral partners and, in some cases, private markets.
Without it, Senegal risks facing higher borrowing costs at a time when its financing needs are growing.
As negotiations continue, the government has signalled it will seek to further diversify its sources of funding to meet short-term obligations and manage looming repayments.
Diba said Senegal was considering a return to international capital markets, including the issuance of eurobonds, which the country did not tap in 2025 amid heightened uncertainty and tight global financial conditions.
Significant debt repayments are due in 2026, increasing pressure on public finances and making access to external funding a priority.
Authorities say diversifying funding sources would help meet immediate cash flow needs while giving the government room to stabilise its fiscal trajectory and implement reforms.
Senegal’s economy, one of the largest in the West African Economic and Monetary Union, has been under strain from rising debt servicing costs, global inflationary pressures and delays to major energy projects.
The start of oil and gas production, expected to boost revenues and growth, has been slower than initially anticipated, limiting the government’s fiscal space in the short term.
At the same time, the new administration has pledged to address social demands and reform governance, adding to budgetary pressures.
Economists say any IMF programme is likely to include commitments to rein in spending, improve revenue mobilisation and strengthen oversight of state-owned enterprises and public borrowing.
The challenge for the government will be to balance fiscal consolidation with social stability, in a country where expectations are high following a change of leadership.
For now, officials insist that talks with the IMF are moving in the right direction.
“Restoring confidence is essential,” a senior finance ministry official said. “An agreement with the IMF would provide a framework to stabilise the economy, reassure partners and prepare for the obligations ahead.”
Whether Senegal can secure a deal quickly will depend on its ability to convince the Fund that past reporting failures have been addressed and that its debt path is once again sustainable a test with major implications for the country’s economic outlook in the years to come.
