Senegal and the International Monetary Fund (IMF) have reached a staff-level agreement for a new $2.2 billion loan program, marking a significant step towards stabilizing the nation's finances. This agreement, announced on September 1, 2026, follows intensive discussions that began with an IMF mission on August 19. The new program replaces a $1.8 billion facility that was suspended in 2024 after President Bassirou Diomaye Faye's government revealed a substantial amount of previously unreported debt.
The discussions were critical for Senegal to address the fallout from the undisclosed debt, agree on a credible plan to stabilize its finances, and determine how to manage its debt burden. An independent audit revealed widespread off-budget borrowing and systematic fiscal data underreporting by the previous administration, leading to a sharp upward revision of central government debt projections from 74.4% to 118.8% of GDP at the end of 2024. The country's fiscal deficit also surged past 11% of GDP.
To secure the new program, Senegal has implemented preliminary measures, including centralizing sovereign debt management, expanding the Treasury Single Account, and auditing state payment arrears. The government also aims to consolidate its budget deficit towards the West African Economic and Monetary Union regional threshold of 3% of GDP through structural reforms like phasing out untargeted energy subsidies and broadening the domestic tax base. While economic growth expanded by double digits in early 2025 due to offshore oil and gas, the non-hydrocarbon sector remains constrained at 3.1%.
The IMF's spokesperson confirmed the constructive nature of the discussions and the substantial progress made. The staff-level agreement is crucial for Senegal to restore credit rating stability, lower Eurobond yields, and attract bilateral development funding. The previously undisclosed debt was estimated by the IMF to be over $11 billion based on end-2023 numbers, with some analysts placing it closer to $13 billion, representing more than a quarter of the total debt. Global credit ratings agency Moody's recently downgraded Senegal's rating to "Caa2" from "Caa1" due to rising refinancing risks.
Senegal had relied on regional markets and retail bond sales to bridge its funding gap since its last IMF financing in late 2023. This new $2.2 billion program is expected to provide much-needed financial support and a framework for sustained economic stability.
