The Senegalese government is facing significant challenges in managing its debt, with a central debt of approximately 25,200 billion francs CFA, equivalent to around $44 billion, as of the end of 2025. The country's debt-to-GDP ratio is estimated to be around 130% when including state-owned enterprises and guaranteed commitments. This has raised concerns about the sustainability of the country's debt and its ability to access financing.
To address this issue, the Senegalese government officially launched its Debt Treatment Plan on September 1, aiming to restore debt viability and reduce its burden on the budget. The plan seeks to maintain the debt denominated in francs CFA outside of the treatment mechanism. The government has also expressed interest in using the G20's Common Framework, a platform designed to facilitate debt restructuring and relief for countries facing debt distress.
The Senegalese authorities are carefully choosing their words to describe the process, avoiding the term "restructuring," which can be associated with debt forgiveness or haircuts. Instead, they are exploring options such as extending maturities or reducing interest rates. However, with such a high debt level, it may become difficult to avoid losses for creditors. The composition of Senegal's debt adds complexity to the situation, with multilateral creditors accounting for around 40% of external debt in 2024.
The remaining 60% is held by other creditors, including bondholders, who may be affected by any debt relief measures. Senegal also has significant arrears, amounting to 1,956 billion francs CFA, or $3.42 billion, as of March 2025, subject to audit results. The International Monetary Fund (IMF) is playing a crucial role in the process, having reached a technical agreement on a facility of around $2.2 billion. However, its approval is contingent on securing financing assurances.
The IMF's involvement is seen as essential, given its expertise in debt sustainability and restructuring. The Fund has been working closely with Senegal to assess its debt situation and develop a strategy to achieve debt viability. Senegal's experience will be closely watched by other countries facing similar challenges, as it seeks to balance the need for debt relief with the imperative of maintaining access to financing.
The country's authorities are under pressure to find a solution that will satisfy all stakeholders, including creditors, while ensuring that Senegal's economic growth and development prospects are not compromised. The process is expected to be challenging, with difficult decisions ahead on how to allocate the burden of debt relief. Ultimately, Senegal's ability to manage its debt will depend on its success in implementing its Debt Treatment Plan and securing the necessary financing.
Key stakeholders, including creditors and international organizations, will be closely monitoring Senegal's progress. The country's experience will provide valuable insights into the effectiveness of the G20's Common Framework and the IMF's debt sustainability tools. As Senegal navigates this complex process, it will be essential to strike a balance between debt relief and maintaining access to financing, ensuring that the country's economic growth and development prospects are not compromised.
Key points
- Senegal's central debt stands at approximately $44 billion, with a broader debt-to-GDP ratio of around 130%.
- The Senegalese government has launched a Debt Treatment Plan to restore debt viability and reduce its burden on the budget.
- The IMF has reached a technical agreement on a facility of around $2.2 billion to support Senegal's debt sustainability efforts.
