The Treasury of Senegal has raised 50 billion CFA francs (US$88.6 million) on the regional debt market, though the entire amount was secured through short-term treasury bills after longer-term bond offerings failed to attract any investor bids.
According to auction results released on Monday, the government obtained the full amount it sought through 364-day treasury bills, while both longer-term bond tranches offered at the sale went unsubscribed.
The auction had included a three-year bond carrying a yield of 6.30 percent and a five-year bond at 6.45 percent, but investors declined to place bids at those rates, highlighting market caution as the country approaches a major external debt repayment.
The Treasury is preparing to repay part of a eurobond issued in 2018, with 333.3 million euros due on March 13. Including interest, total payments linked to the bond amount to roughly US$485 million, according to market estimates.
Authorities have been raising funds on the regional market in recent months to ensure the repayment is covered. Since the start of the year, the government has mobilised more than 700 billion CFA francs on the regional market of the West African Economic and Monetary Union (UEMOA), with Monday’s auction completing the financing effort.
More Read
Short-term borrowing dominates
The marginal yield on the 364-day treasury bills settled at 6.75 percent, lower than the 6.98 percent recorded at the previous auction held on February 27.
Despite the slight easing in short-term borrowing costs, the auction results highlighted an unusual situation in which investors demanded higher yields for lending to the government over one year than the rates offered for longer maturities.
Analysts say this mismatch reflects heightened caution among investors, who appear reluctant to commit funds over longer periods amid uncertainty surrounding Senegal’s fiscal position and external financing outlook.
More Read
Debt concerns weigh on sentiment
Investor caution has intensified following revelations about the scale of the country’s public debt.
According to the International Monetary Fund, Senegal’s total public sector debt reached 132% of gross domestic product at the end of 2024.
The IMF suspended a US$1.8 billion support programme in 2024 after previously undisclosed financial commitments were uncovered under the former administration.
A subsequent audit by the Cour des comptes found that the country’s budget deficit had been understated by as much as seven percentage points of GDP annually.
The findings suggested that Senegal’s debt ratio was closer to 100 percent of GDP at the end of 2023, significantly higher than the previously reported figure of 74 percent.
Heavy reliance on regional financing
With the IMF programme currently suspended, Dakar has turned increasingly to the regional bond market to meet its financing needs.
More Read
Authorities financed roughly 75 percent of their borrowing requirements for 2025 through the UEMOA regional market.
So far this year, the government has raised around 4 trillion CFA francs through regional debt instruments.
However, reliance on short-term borrowing carries risks, as it increases refinancing pressure in the coming years.
Between 2026 and 2028, Senegal will need to mobilise nearly 14.87 trillion CFA francs to service its public debt, according to official projections.
Fiscal consolidation efforts
The government of President Bassirou Diomaye Faye has pledged to gradually restore fiscal stability through a multi-year consolidation plan.
Under the strategy, the budget deficit is expected to decline from 13.4 percent of GDP in 2024 to 7.8 percent in 2025.
Authorities aim to reduce the deficit further to 5.37 percent in 2026 and eventually to 3% by 2027.
The success of that plan, however, may depend heavily on restoring confidence among international lenders and securing a new support programme from the IMF.
Until such an agreement is reached, analysts say investors are likely to remain cautious, particularly when it comes to lending to Senegal over longer maturities.
For now, the latest auction underscores the challenges facing the government as it seeks to balance immediate financing needs with efforts to rebuild investor confidence and stabilise its public finances.
