LONDON, June 26 – Senegal’s sovereign dollar bonds strengthened after the government announced plans to begin reducing its budget deficit from next year, improving investor sentiment toward the country’s fiscal outlook.
The West African nation’s 2033 dollar bonds gained 0.5 cents to 53.73 cents on the dollar in London trading, marking a third consecutive day of gains. Bonds maturing in 2048 also advanced 0.4 cents to 52.91 cents.
The rebound reflects renewed market confidence as investors assess Senegal’s efforts to restore fiscal stability following recent concerns over public finances and elevated debt levels.
Senegal’s budget deficit stood at 333 billion CFA francs ($589.6 million) at the end of March, representing 1.44% of gross domestic product (GDP), compared with an annual target of 1.2451 trillion CFA francs set out in the 2026 Finance Law, according to a Finance Ministry report published on June 15.
“This level, which remains below the amount projected for the year, reflects disciplined budget management, supported by strong domestic revenue collection and restrained spending growth,” the report said.
During the first three months of the year, government revenues reached 1.1497 trillion CFA francs, representing 19.4% of the annual target of 5.9322 trillion CFA francs. Compared with a year earlier, revenues rose 11.9%, an increase of 121.8 billion CFA francs.
Tax revenues were the main driver of this growth. They totaled 1.0957 trillion CFA francs, up 14.1% year-on-year. The increase was supported by higher direct tax collections, particularly from the oil and gas sector, as well as stronger receipts from domestic indirect taxes.
By contrast, non-tax revenues fell 23.6% to 41 billion CFA francs, reflecting lower dividend income, financial earnings and radio spectrum fees. Grant funding also remained limited, reaching 13 billion CFA francs, entirely in the form of capital grants.
On the expenditure side, government spending reached 1.4827 trillion CFA francs by the end of March, representing 20.6% of annual budget projections.
Current expenditures accounted for the bulk of spending, totaling 1.1855 trillion CFA francs. They were mainly driven by transfer payments, personnel costs and debt-servicing expenses, which reached 285 billion CFA francs, including more than 209 billion CFA francs for external debt.
Capital expenditures remained relatively limited, totaling 297.2 billion CFA francs, or only 10.6% of annual projections. This is largely due to the typically gradual rollout of public investment projects later in the year.
This budget performance comes amid heightened scrutiny of Senegal’s public finances. In February 2025, an audit by the Court of Auditors revealed a debt ratio of 99.67% of GDP. The International Monetary Fund subsequently revised this ratio to 132% of GDP at the end of 2023, along with a fiscal deficit of 12.3% of GDP in 2023, compared with the 4.9% previously reported.
To address these challenges, the government has been implementing the SEN-FINTRAC 2025-2029 reform programme since 2025. The initiative aims to strengthen budget transparency, improve domestic revenue collection and ensure debt sustainability as part of the country’s Vision 2050 agenda.
Based on first-quarter data, Senegalese authorities appear to remain on track to reduce the budget deficit to 5.37% of GDP, in line with the 2026 Finance Law.
