Senegal’s Finance Ministry announced plans to visit the United States this month to discuss its sovereign debt program with the International Monetary Fund. Officials said the talks aim to secure a waiver for debt misreporting and negotiate terms for a new loan arrangement to stabilize public finances following the revelation of $13 billion in previously undisclosed debt.
Senegalese officials plan to meet with International Monetary Fund representatives in Washington this month to negotiate a waiver for debt misreporting, a step that could allow the country to defer repayments on previous loans and pave the way for a new IMF-supported program, Reuters reported. The discussions will focus on debt sustainability metrics, fiscal adjustment paths, and the classification of complex financial instruments, including total return swaps, as part of Senegal’s external debt stock, sources familiar with the talks said.
The debt scandal revealed in February by Senegal’s Court of Auditors uncovered about $13 billion in previously undisclosed borrowing accumulated between 2019 and 2023.
The Finance Ministry and Budget has reiterated its “steadfast commitment to its dialogue” with the IMF to stabilize public finances and manage the sovereign debt burden, according to a November 14 communiqué. The ministry emphasized that Senegal will honor its obligations as they fall due and highlighted progress in its 2026 financing strategy, noting that by the end of September, revenues excluding grants and current expenditures had reached 73% of targets.
The backdrop to these negotiations is a debt scandal revealed in February by Senegal’s Court of Auditors, which uncovered about $13 billion in previously undisclosed borrowing accumulated between 2019 and 2023. This revelation raised Senegal’s sovereign debt from an official 74.4% of GDP to approximately 111%, with subsequent estimates by the IMF and investors placing the ratio above 130%. The undisclosed liabilities included complex instruments such as a €650 million total return swap, structured as a derivative rather than a conventional loan, which initially went unrecorded as public debt.
The IMF halted Senegal’s prior lending program following the discovery of these hidden debts, pending clarification of the true debt stock and implementation of reforms to prevent future misreporting, according to IMF Communications Director Julie Kozack. An IMF staff mission led by Mercedes Vera Martin arrived in Dakar on June 15 to resume engagement after a four-month pause caused by political changes and fiscal policy tensions. Ahead of the mission, Senegal made early payments totaling $104 million on two Eurobond coupons, signaling a willingness to cooperate with the IMF and bond markets.
IMF officials have praised Senegal’s successive audits of public debt data, including investigations by the Inspectorate General, the Court of Auditors, and an international firm, as important steps toward fiscal transparency. The June 2026 IMF staff visit concluded with discussions on debt sustainability, fiscal consolidation, and revenue projections. However, the Fund warned that Senegal’s “exceptionally high tax yield” assumptions pose considerable risk to the fiscal strategy.
Differences remain between the IMF and Senegalese authorities on key fiscal metrics. During the IMF Spring Meetings in Washington in April 2026, Senegal projected a budget deficit of 5% of GDP in 2026 and 3% in 2027, based on new tax measures and fiscal tightening. The IMF forecasted higher deficits of 6.2% and 5.8% for the same years, reflecting more cautious assumptions on revenue and expenditure control, Reuters reported. These diverging projections have complicated debt sustainability analyses, which underpin decisions on IMF program design and any sovereign debt restructuring.
Prime Minister Ousmane Sonko has publicly opposed IMF suggestions for a formal debt restructuring, according to statements reported in November. Senegal’s Treasury and General Directorate of Public Accounting have stressed continuity in meeting obligations, citing the settlement of a domestic-law bond maturity amid liquidity pressures as a deliberate reassurance to investors. Officials involved in debt management reforms described plans to reorganize debt recording and reporting, coordinating between the Public Debt Directorate and the Directorate of Public Expenditure Scheduling.
To support these reforms, the World Bank Board approved a project for Senegal aimed at improving debt management practices and enhancing debt transparency through better recording and reporting. The project includes commitments to issue quarterly consolidated debt bulletins to provide regular updates on the full public debt stock, according to World Bank documents. Senegalese officials and international partners have discussed establishing a centralized public debt database as a key step to prevent future hidden borrowing.
Market analysts have expressed concern over Senegal’s sovereign debt outlook. Bank of America Global Research assessed in December 2025 that an external debt restructuring is “increasingly probable” in the second half of 2026 due to financing needs and the hidden debt burden. The bank estimated that Senegal would need to raise about 40% more financing in 2026 than in 2025, a level considered unrealistic without debt relief or new official financing. It projected a potential recovery value of around $40 per $100 of face value for bondholders in a restructuring scenario.
Despite these challenges, Senegal’s early Eurobond coupon payments and domestic bond maturity settlement have been interpreted by market participants as signals aimed at calming investors and preserving access to sovereign financing while negotiations with the IMF and debt management reforms continue. The upcoming U.S. visit by Senegalese finance officials follows these developments and seeks to advance discussions on securing IMF support and stabilizing the country’s fiscal position.
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