DAKAR, Mar 28 – S&P Global Ratings has downgraded Senegal’s local currency rating to “CCC+/C” from “B-/B”, citing rising refinancing risks and increasing reliance on short-term domestic debt.
The agency warned that Senegal faces gross financing needs equivalent to about 26% of GDP in 2026, underscoring mounting fiscal pressure.
With funding from the International Monetary Fund currently frozen and access to international capital markets restricted following the discovery of previously undisclosed debt in 2024, the government has increasingly turned to regional debt markets to meet its financing needs.
S&P also highlighted that elevated global energy prices, driven in part by geopolitical tensions in the Middle East, are adding to fiscal strain by increasing public expenditure, including interest costs estimated at roughly 25% of government revenue.
Although Senegal recently made close to $500 million in debt repayments, the country is reported to have delayed payments to some lenders, raising concerns about liquidity pressures and difficult fiscal trade-offs ahead.
The agency revised the country’s outlook to “negative,” signaling the potential for further downgrades if fiscal conditions worsen or financing challenges persist.
All three major ratings agencies already classify Senegal’s sovereign credit as highly speculative. The latest downgrade pushes the country further into so-called “junk” territory, bringing it closer to levels associated with a heightened risk of default.
The development highlights the growing vulnerability of African frontier markets to tightening global financial conditions, rising borrowing costs, and external shocks.
