SENEGAL’S newly elected government is grappling with a staggering $13bn debt hole left by its predecessor, a discovery that has triggered economic turbulence and the suspension of international support. As the debt-to-GDP ratio surges past 119 percent, Prime Minister Ousmane Sonko is preparing to unveil a national economic rescue plan in the coming week.
The crisis stems from an audit ordered by President Bassirou Diomaye Faye, who took office in April 2024. That audit revealed massive off-the-books borrowing by the former administration, pushing Senegal’s 2023 budget deficit to over 10 percent, more than double the officially reported figure.
In response, the IMF froze disbursements under its $1.8bn credit facility, agreed in 2023. Senegal’s access to international bond markets has also been curtailed, leaving the cash-strapped country with limited options to manage essential expenditures.
How Senegal’s debt ballooned
The full extent of Senegal’s financial exposure continues to unfold. A Court of Auditors review published in February 2025 estimated debt at nearly 99.7 percent of GDP, while Barclays analysts in June said the figure could hit 119 percent by end-2024.
The country’s central government debt now sits at CFA23.2 trillion ($41.73bn), a 27 percent jump from last year. Ratings agency S&P Global has downgraded Senegal’s credit outlook, pegging the hidden debt at $13bn.
‘This presents new risks to Senegal’s debt trajectory and complicates negotiations with the IMF,’ said Michael Kafe, senior Africa economist at Barclays.
IMF under pressure after oversight failure
The scandal echoes other high-profile African debt crises, most notably Mozambique’s $3bn tuna bond affair. But Senegal’s hidden debt is significantly larger. The IMF, which had been overseeing the country’s financial health under a programme, now faces scrutiny for missing warning signs.
While the Fund has not issued a formal statement, it confirmed that its executive board will consider Senegal’s case ‘in due course.’ A decision on whether to issue a waiver for misreporting is expected by September.
Without that waiver, Senegal could be asked to return past disbursements — although most observers believe the IMF will opt for leniency in light of the current government’s transparency.
Sonko’s recovery plan and investor hopes
Prime Minister Ousmane Sonko has promised a detailed roadmap to economic recovery, to be delivered next week. He says the plan will ‘tell the Senegalese how to get the country back on its feet, point by point.’
A renewed deal with the IMF is seen as crucial, both for financial support and to restore investor confidence. Senegal’s sovereign bonds have underperformed in recent months, as the scope of the debt problem became clearer.
The government is also planning to rebase its economy, which could lower its debt-to-GDP ratio and make the country more attractive to creditors. Additionally, it may consider reprofiling existing debt to extend maturities — though officials have ruled out a full restructuring that could rattle regional banks and markets.
A regional ripple effect
Senegal’s situation is now being closely watched across West Africa, where its economic performance and debt credibility are seen as bellwethers for the broader UEMOA region. As one of the region’s more stable economies, a deeper crisis in Senegal could have knock-on effects for neighbouring countries and regional banks exposed to Senegalese debt.
Despite the alarming numbers, the government insists it will avoid default and maintain payments on foreign loans.
For now, all eyes are on Sonko’s recovery plan and the IMF’s next steps. Whether Senegal can climb out of its $13bn hole without deeper cuts or external restructuring will determine its economic fate for years to come.
