Senegal is facing a deepening economic crisis after the new government uncovered hidden debts, which have shaken investor confidence and blocked international financial support. Tensions between President Bassirou Diomaye Faye and Prime Minister Ousmane Sonko are hindering efforts to stabilize the economy and secure funding.
An audit ordered by the administration shortly after taking office in April 2024 revealed previously unreported public liabilities totaling up to $13 billion, accumulated between 2019 and 2023. The discovery led to a credit downgrade from Standard & Poor’s and triggered the International Monetary Fund to halt disbursements from its ongoing program with Senegal. The IMF had previously estimated the country’s end-2023 debt-to-GDP ratio at 74%, but new data pushed that figure closer to 100%.
In response, the IMF plans to send a mission to Dakar in August to address the debt misreporting and begin discussions on a new loan arrangement. “The purpose of the mission is going to be to discuss the steps needed to bring the misreporting case to our executive board,” IMF spokesperson Julie Kozack stated during a recent briefing. She noted that the team would also explore the framework of a possible future program.
Despite the freeze, the IMF acknowledged Senegal’s willingness to implement reforms and improve transparency. Kozack, referencing First Deputy Managing Director Gita Gopinath, emphasized the Fund’s appreciation for Senegal’s actions to strengthen its economy and fix errors in its financial records.
Tensions within Senegal’s leadership, however, have overshadowed reform efforts. In a public address to his party on July 10, Sonko criticized Faye for failing to protect him from what he described as “unjust attacks” and “insidious obstacles.” The remarks followed a Supreme Court ruling upholding Sonko’s earlier defamation conviction, casting uncertainty over his political future.
While both leaders have since made public gestures of reconciliation, the economic fallout continues. Senegal withdrew a recent regional bond offering after facing steep borrowing costs, in contrast to its neighboring country, Côte d’Ivoire, which successfully issued bonds. Meanwhile, donor support has declined sharply, with external grants decreasing by more than 70% year-over-year by early 2025.
The IMF’s August visit could mark a turning point, provided Senegal commits to corrective measures and regains the trust of international lenders.
