DAKAR, Sept 1 – The International Monetary Fund and Senegal have reached a staff-level agreement on a three-year, $2.2 billion financing package that requires the West African country to pursue debt treatment as part of efforts to restore debt sustainability.
The agreement, announced by the IMF on Tuesday, marks a potential breakthrough after prolonged negotiations triggered by the discovery of billions of dollars in previously undisclosed borrowing under Senegal’s previous administration. The new programme remains subject to approval by IMF management and the Fund’s executive board.
Senegal’s Ministry of Economy and Finance separately confirmed that the government had agreed to restructure its debt under an “enhanced common framework”. The ministry said the approach would “provide a tailored response to the specific characteristics of Senegal’s debt composition”.
The country’s debt position deteriorated sharply following the revelation of previously misreported borrowing. IMF figures show that Senegal’s debt reached 132% of gross domestic product at the end of 2024.
The IMF estimates that more than $11 billion in debt had been misreported based on end-2023 figures. Some analysts have placed the figure closer to $13 billion, equivalent to more than a quarter of Senegal’s approximately $40 billion economy.
The discovery prompted the IMF to freeze a previous $1.8 billion lending programme and led to extended and difficult negotiations over a replacement arrangement. The new agreement is therefore intended to provide a framework for renewed IMF financial support while requiring Senegal to address the underlying fiscal and debt weaknesses.
Under the proposed programme, Senegalese authorities have “announced their intention to seek debt treatment in order to restore debt sustainability”, according to the IMF.
The Fund said the new arrangement will also require Senegal to take “decisive corrective actions” in support of its request for a waiver concerning the previously misreported debt.
The requirement for debt treatment places Senegal’s fiscal adjustment efforts at the centre of the new IMF programme. Rather than relying solely on new financing, the agreement links additional IMF support to measures designed to address the country’s elevated debt burden and restore the credibility of its public finances.
For investors and creditors, the agreement could provide greater clarity over Senegal’s path towards resolving its debt crisis. However, the final terms of the financing package and the broader debt treatment process will depend on subsequent approvals and negotiations.
The proposed three-year programme now moves to the IMF’s management and executive board for consideration. Its approval would reopen a formal financing relationship between Senegal and the Fund while placing the country’s debt restructuring efforts under a new policy framework.
