According to allafrica.com, Senegal and the International Monetary Fund have reached a staff-level agreement on a new $2.2 billion (€1.9 billion) lending programme — nearly two years after an earlier $1.8 billion (€1.55 billion) arrangement was suspended following revelations of unreported public debt.
Economic Context and Reform Timeline
The 36-month IMF arrangement, announced on Tuesday, supports Senegal’s economic and financial reform programme for 2026 to 2029. It remains contingent on formal approval by the IMF’s executive board and on Senegal securing financing assurances from international partners. The deal follows protracted negotiations with the government of President Bassirou Diomaye Faye, who assumed office in 2024 after accusing former president Macky Sall’s administration of concealing the true scale of the country’s debt and budget deficit.
The IMF suspended its prior programme — agreed in 2023 — upon uncovering undeclared liabilities. Mercedes Vera Martin, division chief in the IMF’s African Department, stated the new agreement requires “
decisive corrective measures
” to address that misreporting. Authorities have since undertaken audits and worked to reconcile historical financial data to improve transparency.
Senegal’s total public-sector debt stood at 132 percent of gross domestic product at the end of 2024, placing it among the most heavily indebted countries in sub-Saharan Africa. However, fiscal discipline has yielded measurable progress: the fiscal deficit narrowed from 13.4 percent of GDP in 2024 to 6.4 percent in 2025.
Growth Dynamics and Oil Revenue
The economy expanded by 6.7 percent in 2025, buoyed by Senegal’s first full year of offshore oil production, which began in 2024. Growth outside the hydrocarbon sector slowed to 2.2 percent, underscoring the sector’s outsized contribution to macroeconomic stability. Finance Minister Cheikh Diba welcomed the IMF accord as a technical breakthrough that “
paves the way for financing prospects
”. He emphasized that the proposal was “
not a restructuring in the traditional sense
”, but rather a context-specific approach.
Despite the IMF agreement, Senegal continues raising funds on regional markets — where borrowing costs are generally higher than those offered by multilateral institutions and development banks. Moody’s recently downgraded the country’s long-term foreign-currency debt rating from Caa1 to Caa2, reflecting ongoing concerns about debt sustainability.
Political Tensions Over Debt Treatment
Debt governance has become politically charged. Tensions between President Bassirou Diomaye Faye and his former prime minister Ousmane Sonko intensified earlier this year, including over IMF engagement. After Faye dismissed Sonko in May, Sonko became speaker of the National Assembly — a position granting him decisive influence over parliamentary scrutiny of IMF-linked reforms. Sonko, whose Pastef party holds a majority in the Assembly, publicly demanded greater transparency, posting on Facebook for details on what “
debt treatment
” entails and insisting all commitments undergo full legislative debate.
Source: allafrica.com
Compiled from international media by the SCI.AI editorial team.
