Discussions between Senegal's government and the International Monetary Fund have been constructive, with "positive developments" anticipated at the conclusion of a mission on September 1, 2026. The IMF began its mission on August 19 to discuss a replacement loan program, as the previous $1.8 billion program was suspended in 2024 after President Bassirou Diomaye Faye's government revealed significantly more debt than initially reported.
This previously undisclosed debt, estimated by the IMF at over $11 billion (and by some analysts closer to $13 billion), represents more than a quarter of Senegal's total debt. To secure a new IMF program, Senegal needs to address the fallout from this "hidden debt," agree on a credible plan to stabilize its finances, and resolve its debt burden. Senegal last received IMF financing in late 2023, and since then, has relied on regional markets and retail bond sales.
The country's fiscal situation is dire, with the central government debt projections revised sharply upward from 74.4% to 118.8% of GDP at end-2024, and the fiscal deficit exceeding 11% of GDP due to unrecorded liabilities. Moody's recently downgraded Senegal's rating to "Caa2" from "Caa1" due to rising refinancing risks. A new IMF program is crucial for investor confidence and future borrowing, and will require Senegal to centralize sovereign debt management, expand its Treasury Single Account, and audit state payment arrears, aiming to reduce its budget deficit to the West African Economic and Monetary Union's regional threshold of 3% of GDP.
Senegal's Minister of Industry and Trade, Serigne Gueye Diop, indicated in June 2026 that the government is prepared to renegotiate its debt, a stance previously resisted by former officials. This shift aligns with President Faye's preference for a deal with the IMF and debt renegotiation. The country faces significant financial pressure, with large sums due for repayments in 2026, including eurobonds trading below their original value, signaling mistrust from investors. The IMF and Dakar also need to reconcile differences in their budget forecasts, particularly regarding tax revenue and economic growth driven by oil and gas production, to ensure the debt is deemed sustainable.
