In 2023, Senegal secured a $1.8 billion aid program from the IMF, but it is now frozen and requires restructuring, as confirmed by Finance Minister Cheikh Diba. The government seeks to renegotiate terms with the IMF, targeting a new agreement by early 2025.
During the annual IMF meetings in Washington, Minister Diba revealed the need to update Senegal’s IMF program following an audit that showed a higher-than-reported debt and budget deficit. The audit, commissioned by President Bassirou Diomaye Faye, highlighted significant discrepancies in the financial data from former President Macky Sall’s administration, including a debt-to-GDP ratio of over 80%, higher than the previously reported 73%. Additionally, the budget deficit stands above 10% of GDP, nearly double the initial 5.5%.
These findings led Moody’s to downgrade Senegal’s credit rating further into speculative territory, and Senegalese Eurobonds faced heavy selling. Despite this, disbursed IMF funds will not be recalled, as Senegal voluntarily disclosed the accurate figures.
The government is also reviewing contracts in the natural resources sector to ensure compliance with existing codes. The energy sector is crucial to Senegal’s future, with major projects like the $4.8 billion GTA LNG project by BP and Kosmos Energy and Woodside Energy’s Sangomar oil field, projected to accelerate economic growth to 6% in 2024 and over 10% by 2025.