Africa-Press. The International Monetary Fund announced that its staff held “open and constructive technical discussions” during their visit to Senegal, and that they will hold further talks regarding the West African nation’s request for a new support program.
Senegal and the International Monetary Fund are in discussions to address a debt issue that has been reported inaccurately since the country’s new leaders revealed the problem in 2024.
The Fund froze its previous lending program of $1.8 billion after the larger debt was revealed, and since then, Senegal has been largely isolated from international capital markets, making it reliant on regional borrowing.
The International Monetary Fund stated on its website: “The team welcomed the authorities’ commitment to address the vulnerabilities highlighted by previous inaccurate reports, including through reforms to strengthen public financial management.”
The Fund announced that the fragility of Senegal’s debt situation remains high, and that rising global oil prices, linked to the Iranian war, are expected to increase pressure on public finances this year.
The Fund clarified that its staff will continue discussions on policies and reforms that could be supported through a new lending program, including measures to address debt fragility and enhance public governance. The Fund’s statement added: “We reaffirm our commitment to support Senegal in these challenging circumstances.”
Sources reported that the country’s leaders are still hesitant to restructure the debt, despite growing investor belief that Senegal will have no choice but to default. However, the Senegalese Minister of Industry and Trade stated on Sunday that restructuring is possible.
To ensure relief from the inaccurate debt reporting and the International Monetary Fund program, Senegal must take measures to address the inaccurately reported debts, agree on a credible plan to achieve fiscal stability, and establish a roadmap to make its debt burden sustainable.
Political disruptions experienced last month, when President Bachelet Diumaï Faye dismissed Ousmane Sonko from the position of Prime Minister before being elected by lawmakers as President of the National Assembly, may complicate the necessary reforms to reach an agreement with the International Monetary Fund.
