The Japan Times - IMF reaches agreement with Senegal on new $2.2 bn loan programme

The announcement comes nearly two years after Senegal's current government, which rose to power on an opposition electoral victory, accused the former administration of ex-president Macky Sall (2012-2024) of having concealed the true extent of the west African country's worrisome budgetary situation.

As a result, the IMF suspended a $1.8-billion aid programme it had agreed upon in 2023, pending further information and commitments from new President Bassirou Diomaye Faye's government.

The new 36-month arrangement is meant to support Senegal's "economic and financial reform program for the 2026–2029 period".

But given past underreporting, it will also require "decisive corrective measures to support the authorities' request for a waiver regarding the misreporting of data", the IMF said in a statement.

The staff-level agreement will still need to be approved by the IMF's executive board.

After the budget scandal erupted in 2024, the IMF found Senegal's 2023 budget deficit was 12.3 percent of GDP, when the last government had said it was 4.9 percent.

After several IMF visits to Senegal to examine the country's financial situation, the IMF and the government began negotiations in mid-October for a new aid programme.

Mercedes Vera Martin, division chief at the IMF African Department, told AFP in an interview Tuesday that "since the misreporting was identified, the authorities have taken efforts to improve the transparency."

"That includes several audits. They have now reconciled their historical data, and recently they published a revised bulletin with the historical data, incorporating the findings of the debt," she said.

The IMF said in its statement that it would also require "receipt of the necessary financing assurances from Senegal's partners".

- Heavily indebted -

With a total public-sector debt estimated at 132 percent of GDP at the end of 2024, according to the IMF, Senegal is one of the most indebted countries in sub-Saharan Africa.

However, its overall fiscal deficit narrowed sharply from 13.4 percent of GDP in 2024 to 6.4 percent of GDP in 2025, mostly driven by spending rationalisation, the IMF said in June.

Senegal has been able to continue financing itself largely through the regional bond market, but this comes at higher costs than loans from international financial institutions, development banks or governments, according to global ratings agency S&P.

Faye became embroiled in a political feud with his then prime minister, Ousmane Sonko, earlier this year over a variety of topics, including the IMF programme.

Although the president sacked Sonko in May, Sonko was afterwards elected as speaker of the National Assembly -- a role that could complicate Faye's ability to usher in IMF reforms.

While Faye prefers a more conciliatory approach with the IMF, Sonko has rejected any debt restructuring.

Asked whether the deal calls for restructuring, Martin said that it included "debt treatment".

"It's a sovereign decision. The authorities have a debt treatment plan that will allow us to move forward in our engagement", Martin said.

Global ratings agency Moody's last week downgraded Senegal's long-term foreign-currency debt rating to Caa2 from Caa1, mid-negotiations with the IMF.

That said, "the Senegalese economy has remained resilient, recording 6.7 percent growth in 2025 driven by the first full year of oil production, although non-hydrocarbon GDP growth slowed to 2.2 percent", Martin said in the IMF's statement.

Senegal launched production at its first offshore oil field in 2024.

K.Tanaka--JT