Senegal Secures $2.2bn IMF Financing Agreement

The International Monetary Fund (IMF) has reached a staff-level agreement with Senegal on a new 36-month, $2.2 billion debt programme aimed at supporting the country’s economic and financial reforms from 2026 to 2029.

The agreement, announced by the IMF in a statement, follows the suspension of an earlier $1.8 billion programme after previously unreported government debt was discovered.

The new programme is designed to support Senegal’s economic and financial reform programme while addressing concerns over the country’s past reporting of fiscal data.

However, the IMF said Senegal would need to implement “decisive corrective measures” to support its request for a waiver related to the misreporting of data.

The staff-level agreement is subject to approval by the IMF Executive Board before it can take effect.

In 2024, Senegal’s new government, which came to power after an opposition electoral victory, accused the administration of former President Macky Sall of concealing the true extent of the country’s fiscal challenges.

The IMF subsequently suspended the $1.8 billion programme agreed in 2023 pending further information and commitments from the new authorities.

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According to the IMF, Senegal’s budget deficit in 2023 stood at 12.3 per cent of Gross Domestic Product (GDP), significantly higher than the 4.9 per cent reported by the previous government.

Following several IMF missions to assess Senegal’s financial situation, negotiations for a new programme began in mid-October.

Senegal’s public sector debt was estimated at 132 per cent of GDP at the end of 2024, making it one of the most indebted countries in sub-Saharan Africa.

“The country’s overall fiscal deficit, however, narrowed from 13.4 per cent of GDP in 2024 to 6.4 per cent in 2025, mainly due to spending rationalisation,” the IMF said in June.

Senegal has continued to finance much of its borrowing through the regional bond market, although this comes at a higher cost than financing from international financial institutions, development banks and governments, according to global ratings agency S&P.

The new IMF programme also comes amid political differences between President Bassirou Diomaye Faye and former Prime Minister Ousmane Sonko over economic policy and relations with the Fund.

Faye dismissed Sonko as prime minister in May, but Sonko was subsequently elected Speaker of the National Assembly, a position that could influence the government’s ability to implement IMF-backed reforms.

While Faye has favoured a more conciliatory relationship with the IMF, Sonko has opposed debt restructuring.

Meanwhile, Moody’s last week downgraded Senegal’s long-term foreign-currency debt rating to Caa2 from Caa1 amid the country’s negotiations with the IMF.