Senegal Debt Plan Avoids the Word Restructuring
SENEGAL · DEBT
Key Facts
- —The country Senegal, West Africa’s most stable democracy and, until two years ago, one of its best-regarded borrowers.
- —What happened An audit found the previous government had hidden a large part of the national debt.
- —How large Debt for the end of 2023 was restated from 74.4% of the economy to 111%.
- —Where it stands now The IMF and Senegal reached a staff-level agreement on 1 September for about US$2.2 billion over three years.
- —The catch It is not approved. The board must first grant a waiver over the misreporting.
- —The word nobody uses Restructuring. The government calls it a treatment plan, and has asked the G20 to run it.
Senegal has asked the G20 to organise talks with its bondholders, which is what countries do when they restructure. Its finance minister says this is not a restructuring.
Senegal is trying to do something that has not been done before. It wants to reorganise about US$5 billion of foreign debt through the G20, without calling the result a default.
How a Model Borrower Lost Its Numbers
Senegal spent a decade as the country West African finance ministries were told to imitate. Then its own auditors looked at the books.
The Court of Auditors reported in February 2025 that debt had been concealed under President Macky Sall between 2019 and March 2024.
It was hidden through over-financing, off-budget bank borrowing and undeclared contracts. The end-2023 debt figure went from an official 74.4% of output to 111%.
The 2024 deficit turned out to be 13.4% of output. Undisclosed liabilities exceeded US$11 billion.
The IMF mission chief at the time, Edward Gemayel, put it without diplomacy. There was a very deliberate decision, he said, to underreport the debt during the preceding years.
An existing US$1.8 billion programme was suspended, and it has stayed suspended.
What Was Agreed on 1 September
IMF staff and the Senegalese government reached a staff-level agreement for a 36-month arrangement worth about US$2.2 billion.
Staff-level is the important part. The agreement now needs approval by IMF management and the executive board, and no board date has been set.
Two conditions come first. Senegal must take what the Fund calls decisive corrective actions to support its request for a waiver in the misreporting case.
It must also obtain financing assurances from its partners, which in practice means its creditors agreeing to a treatment.
The Plan, and the Careful Vocabulary
On the same day, the finance ministry launched what it calls a debt treatment plan. It formally asked the G20 to use its Common Framework.
The Common Framework is the mechanism the G20 built for sovereign debt restructuring. Senegal has asked for an improved version, with a tighter timetable and parallel creditor talks.
The perimeter is roughly US$5 billion of Eurobonds and other foreign-currency commercial debt. Regional debt in CFA francs is excluded.
Finance Minister Cheikh Diba calls it a specific treatment rather than a classic restructuring. It rests on active management and reprofiling of maturities.
The IMF uses its own neutral phrase, debt treatment to restore debt sustainability. Neither party says restructuring out loud.
What the Creditors Did Next
On 11 September an Ad Hoc Senegal Bondholder Group formed, advised by the law firm White and Case.
It wants any treatment to be economically justifiable, equitable and sustainable, and built on reasonable economic assumptions. It also wants the burden spread fairly across all financial creditors.
That last phrase is aimed at the regional debt Senegal has excluded.
Senegal made a Eurobond payment on 13 September. S&P rates the country CC and considers a distressed exchange extremely likely.
The Politics Are Inside the Governing Party
Senegal’s president is Bassirou Diomaye Faye. His prime minister is Ahmadou Al Aminou Lô, an economist and former central banker appointed in May.
Lô replaced Ousmane Sonko, the man who built the movement that won the presidency. Sonko is now President of the National Assembly, elected with 132 of 133 votes.
Faye launched his own party in July. The governing Pastef movement holds the parliamentary supermajority and has been pulling away from him.
After Lô set out his programme on 8 September, Pastef demanded what it called a loyal dialogue with the president. The state needs institutions standing upright, it said, not aligned institutions.
It stopped short of a confidence motion that could have brought the government down.
The Test Comes Through the Budget
At the cabinet meeting of 10 September, the prime minister gave the finance minister a deadline. The revised 2026 budget goes to the National Assembly by 15 September.
That bill carries the commitments made to the IMF, which makes it the real vote on the programme. The Assembly does not ratify the IMF arrangement itself.
An earlier attempt collapsed on procedure. In June the Assembly received the presidential decree without the bill attached and sent the file back.
No vote date has been set. The 2027 budget goes to cabinet on 30 September.
For investors watching West Africa, Senegal is the test case. Can a country reorganise commercial debt inside the G20 framework without the market calling it a default?
More: Africa news and analysis, every day from The Rio Times.
Frequently Asked Questions
What did the IMF agree with Senegal?
A staff-level agreement on 1 September 2026 for a 36-month arrangement worth about US$2.2 billion. It is not yet approved.
What is the hidden debt scandal?
An audit found debt concealed between 2019 and 2024. End-2023 debt was restated from 74.4% of output to 111%.
Is Senegal restructuring its debt?
It has asked the G20 to use its Common Framework, which is a restructuring mechanism. The government calls it a treatment plan.
How much debt is involved?
Roughly US$5 billion of Eurobonds and foreign-currency commercial debt. Regional CFA franc debt is excluded.
Who runs Senegal?
President Bassirou Diomaye Faye, with Ahmadou Al Aminou Lô as prime minister since May 2026.
What happens next?
The revised 2026 budget goes to parliament, and the IMF board must grant a waiver before approving the programme.
Sources: International Monetary Fund, Cour des comptes du Sénégal, APS, Reuters, Jeune Afrique, S&P Global Ratings.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
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