The International Monetary Fund (IMF) has reached a staff-level agreement with Senegal on a new $2.2 billion, 36-month loan program, nearly two years after suspending a previous financing arrangement following the discovery of previously unreported debt.
The new program is designed to support Senegal’s economic and financial reform agenda for 2026–2029. However, IMF approval will depend on the implementation of corrective measures addressing past data misreporting, as well as securing financing assurances from Senegal’s international partners. The agreement still requires final approval from the IMF Executive Board.
The previous $1.8 billion IMF program, approved in 2023, was suspended after Senegal’s current government revealed that the administration of former President Macky Sall had understated the country’s fiscal challenges. An IMF review later found that Senegal’s 2023 budget deficit was 12.3% of GDP, significantly higher than the 4.9% previously reported.
According to Mercedes Vera Martin, Division Chief at the IMF’s African Department, Senegalese authorities have taken steps to improve transparency since the discrepancies were uncovered. These measures include conducting audits, revising historical financial data, and publishing updated reports that reflect the full extent of the country’s debt obligations.
Senegal remains one of the most heavily indebted countries in sub-Saharan Africa, with public-sector debt estimated at 132% of GDP at the end of 2024. Despite this, the country has made progress in reducing its fiscal deficit, which narrowed from 13.4% of GDP in 2024 to 6.4% in 2025, largely through spending controls and fiscal reforms.
The government has continued to access funding through regional bond markets, although borrowing costs remain higher than those offered by international financial institutions and development lenders.
Political dynamics could complicate the reform process. President Bassirou Diomaye Faye, who took office after the 2024 election, has favored cooperation with the IMF. However, former Prime Minister Ousmane Sonko, now Speaker of the National Assembly, has opposed debt restructuring measures, creating potential challenges for implementing IMF-backed reforms.
When asked whether the new agreement requires debt restructuring, IMF officials said it includes a broader “debt treatment” plan, with the specific approach remaining a sovereign decision for Senegal’s government.
Meanwhile, Moody’s recently downgraded Senegal’s long-term foreign-currency debt rating to Caa2 from Caa1 during the IMF negotiations, reflecting ongoing concerns about the country’s debt burden.
Despite these challenges, Senegal’s economy continued to grow, expanding by 6.7% in 2025, supported by the first full year of offshore oil production. However, growth in the non-hydrocarbon sector slowed to 2.2%, highlighting the economy’s increasing reliance on energy revenues following the launch of the country’s first offshore oil field in 2024.
