Senegal's Speaker of the National Assembly, Ousmane Sonko, has signaled a softened approach to the nation's debt challenges, moving away from his previous firm opposition to restructuring. Sonko stated that the National Assembly would assess any proposed solutions, including a potential restructuring of billions of dollars in loans, based on their alignment with a broader economic transformation agenda. He clarified that the government is not taking "fixed positions in absolute terms" and that his prior resistance to a "wild restructuring" was due to conditions not being in place at the time he served as prime minister.
This shift comes amid ongoing financial difficulties for Senegal. The country's hidden debt crisis, which emerged in 2024, revealed that the previous administration had understated debt and deficit figures. By February 2025, the Court of Auditors confirmed end-2023 debt at 99.7% of GDP, significantly higher than the previously reported 74.41%, implying approximately $7 billion in hidden borrowing. By March 2025, public debt had climbed further, with banks estimating a debt-to-GDP ratio of 119%. The IMF suspended a $1.8 billion credit facility due to the misreporting, and discussions for a new program have faced hurdles.
Notably, Sonko's statements follow his dismissal as Prime Minister in May 2026 by President Bassirou Diomaye Faye, and his subsequent election as Speaker of the National Assembly. Earlier in the year, in January 2026, Sonko had stated that Senegal would not need to restructure its debt. However, the current financial climate, including a potential $2 billion overrun in fuel subsidies for 2026 and growth forecasts revised down to around 2% from an initial 5%, appears to have prompted a re-evaluation of strategies. Discussions are currently underway with the IMF, which returned to Dakar in mid-June 2026 to assess the situation and potential measures. The IMF's mission is focused on key areas, including an estimated debt burden of 132% of GDP when state-owned enterprise liabilities are included, opaque borrowing practices like total return swaps, and immediate financing requirements.
Despite Sonko's apparent shift, sources suggest that an IMF deal may not be imminent during the current staff visit due to differing opinions on how to address the debt burden and Senegal's resistance to debt restructuring. This impasse has led to Senegal being shut out of international capital markets, relying instead on short-term regional borrowing. The country's 6.25% 2033 bonds were trading down 1.1 points at 52.7, yielding 18.7%, reflecting investor concerns. JPMorgan analysts, in May, had already indicated that bond prices implied a restructuring, including a 15% nominal haircut, a five-year maturity extension, and interest rate reduction. The outcome of the current IMF talks, which resumed in June, will be crucial in determining Senegal's financial strategy.
