DAKAR, Sept 8 – Senegal will not pursue a restructuring of its public debt but instead plans to reprofile existing obligations, Prime Minister Ahmadou Al Aminou Lo told lawmakers on Tuesday.
The government must also clear 1.956 trillion CFA francs ($3.5 billion) in payment arrears as part of efforts to restore public finances, Lo said. He warned that the arrears risk stalling economic activity and triggering job losses.
The government’s position comes shortly after Senegal and the International Monetary Fund (IMF) reached a staff-level agreement for a new $2.2 billion, three-year financing programme.
The previous IMF programme was suspended in 2024 after an audit uncovered substantial misreporting of the country’s debt and fiscal position under the former government, prompting renewed scrutiny of Senegal’s public finances.
Speaking before parliament, Lo drew a clear distinction between the government’s planned approach and a conventional debt restructuring.
“It is not a restructuring, it is reprofiling,” Lo said. “Reprofiling involves extending maturities and renegotiating interest rates.”
Debt reprofiling generally seeks to ease near-term repayment pressures without reducing the underlying principal owed to creditors. For Senegal, the approach would involve extending repayment periods and renegotiating interest costs as authorities seek to place the country’s debt trajectory on a more sustainable footing.
Senegal’s Ministry of Economy and Finance previously said the country had agreed with the IMF to an “enhanced common framework” aimed at restoring debt sustainability, although the ministry did not initially disclose the specific measures that would be adopted.
The new IMF programme is intended to support Senegal as the government addresses the fiscal consequences of previously undisclosed borrowing and works to rebuild credibility with international lenders and investors.
Lo also told lawmakers that Senegal is renegotiating approximately 30 mining agreements, adding another dimension to the government’s effort to strengthen the country’s public finances and improve the terms of its natural-resource sector.
The renegotiations come as Dakar seeks to capture greater economic value from its mineral resources while balancing the need to maintain investor confidence and attract further capital into the sector.
For investors, the combination of debt reprofiling and mining-contract reviews will make the government’s implementation of its fiscal strategy particularly important. The outcome could influence Senegal’s borrowing costs, relations with creditors and the broader investment environment.
The debt strategy also reflects a change in the political leadership overseeing Senegal’s economic policy. Lo was appointed prime minister in May, three days after President Bassirou Diomaye Faye dismissed the government led by Ousmane Sonko, who had previously opposed debt restructuring and now serves as speaker of parliament.
The government’s decision to pursue reprofiling rather than restructuring therefore represents an important policy distinction as Senegal seeks to address its debt burden without undertaking a conventional restructuring of its obligations.
With the IMF agreement now at staff level, the next stage will depend on Senegal’s ability to implement the measures required to restore debt sustainability while maintaining investor confidence and protecting economic growth.
