DAKAR, Aug 25 – Senegal’s parliament has ordered an investigation into a series of total-return-swap transactions used by the government to raise about €1 billion, opening a new review of the country’s unconventional approach to financing its budget and other funding needs.
The National Assembly is establishing a non-partisan commission of inquiry with lawmakers representing different political groups, according to a statement published on its website. The commission will begin its work once its members have been formally appointed and will have up to six months to complete its investigation and submit a report to the speaker of parliament.
The transactions were used by Senegal as an alternative source of financing at a time when access to international capital markets was constrained. The government has defended the strategy, arguing that derivatives-linked financing allowed the country to borrow at significantly lower costs than through conventional Eurobond issuance.
Finance Minister Cheikh Diba previously said Senegal used total return swaps, or TRS, to obtain financing at yields of around 7%, compared with approximately 11% to 12% typically associated with Eurobond markets. He said the transactions generated savings of about 36 billion CFA francs, equivalent to roughly $64 million.
According to Senegal’s finance ministry, the government executed seven TRS transactions between April and November 2025. The arrangements have since attracted increased scrutiny as authorities seek to rebuild the credibility of the country’s public finances following concerns over the accuracy of earlier debt reporting.
A total return swap is a derivatives contract that transfers the economic return and risks associated with an underlying asset between counterparties. When used as a financing instrument, such arrangements can provide governments with access to funding without taking the form of a conventional bond issuance, although their treatment in public debt assessments can depend on the structure and terms of the transactions.
The parliamentary inquiry therefore comes at a sensitive point for Senegal’s fiscal policy. The government is seeking to demonstrate greater transparency around its borrowing arrangements while maintaining access to financing at a time when elevated debt levels and previous reporting concerns have complicated its relationship with international lenders.
The six-month timeframe gives lawmakers until early 2027 at the latest to complete the review, assuming the commission begins work shortly after its members are installed.
The inquiry comes as scrutiny of sovereign financing structures across African markets increases, particularly as governments seek alternatives to traditional debt issuance amid elevated borrowing costs and tighter access to international capital.
