Why is Senegal refusing to restructure its external debt ?

I recently described Senegal’s case of “misreporting” —in English this renders as lying — to the IMF[1]. The lying began with the former Senegalese government, in power until April 2, 2024, fabricating data about public spending and debt management since about 2019. My earlier post highlighted the delinquency of the Fund and the World Bank at staff, management, and Board levels and suggested corrective measures by both institutions.

This post asks the obvious question—why is Senegal refusing to restructure its external debt ?—in reviewing the lack of progress since mid-2023 toward any realistic resolution of the country’s debt burden.

The IMF and Senegal, 2023-2026

The Fund’s Executive Board completed the “Sixth and Final Review Under the Policy Coordination Instrument, the Third and Final Reviews under the Stand-By Credit Facility and the Stand-By Arrangement” on January 9, 2023, and authorized the disbursement of US$216 million. The Fund praised the government’s efforts which “ … should help rebuild fiscal buffers and put public debt on a firmly downward trajectory over the medium term. Significant progress was achieved in improving transparency and accountability. “

The IMF Board approved new loans to Senegal on 26 June 2023, by which the country committed to borrow about US$1.834 billion. That amount was comprised of an Extended Fund Facility (EFF) in an amount of US$1.007 billion, an Extended Credit Facility (ECF) in an amount of US$503 million, and a Resilience and Sustainability Fund (RSF) of US$324 million (in total, 4.5% of GDP). The need for a new program of 4.5% of GDP, on top of the outstanding stock of debt to the IMF of 2.4% of GDP, was left unexplained. Fears (Inquiétudes ? Préoccupations ?) about Senegal’s debt were calmed by the confident pronouncement of a joint IMF/IDA Debt Sustainability Analysis (DSA),^[2] issued on June 9, 2023, which argued that “Senegal is … at moderate risk of external and overall public debt distress, with limited space to absorb shocks.”

The Fund’s June 2023 program was supported by an IDA Development Policy Loan (DPL) to Senegal in the amount of US$300 million, approved in May of 2023. I earlier made two observations on the sequence of the Bank and Fund programs in 2023. There was no reason for the Bank to provide budget support of nearly 4.5% of 2023 government revenue in advance of a large Fund commitment unless the intention was to fill a financing gap that Bank and the Fund would not yet admit to their shareholders.^[3] A second aspect of the unusual sequence (Bank, then Fund) was covert support to the Sall regime which planned to stay in power indefinitely.

There are several possibilities about why the debt was hidden until the previous regime could flee. One is that the Fund and the Bank knew nothing of it. I consider this impossible given that the Fund runs the regional central bank (the BCEAO) and given the many high-ranking Senegalese and other West African officials in the Fund and in the Bank among whom word would have spread. A second notion is that the Fund and Bank staff knew about it by mid-2023 and did not tell management. This is unlikely given the atmosphere of terror with which Fund management, in particular, rules its teams. The third, and most likely, is that Fund and Bank staff knew about the hidden debt, informed management, keep quiet in the hopes that the Cour des Comptes would find an error in the government’s favor, and have been trying for the past three years to find a solution that hides their own incompetence.

A measure of the guilty knowledge of the IMF in Senegal has been its passivity since approving the June 2023 program. In December 2023, the First Review of^[4] the June 2023 loans reported that performance under the Fund program had been “satisfactory”. It estimated that the country’s total public debt to GDP ratio was 77.7 % in 2023 and projected a value of 72.5 % by end-2024, values which had changed slightly since those of 2021 and 2022. The report of the First Review (page 9) told the following fairy tale, which confirms the view that the Fund (and the Bank) knew what the Sall regime was doing and decided to hope for some miraculous turnaround:

“To ensure debt service payments around the 2024 presidential elections amidst uncertain financial conditions, the authorities have been proactively building up precautionary liquidity buffers. They are raising an amount equivalent to approximately 3.2 percent of GDP, including through syndicated commercial loans from international banks and issuance on the regional financial market. The amount of over-financing is calibrated to cover debt service payments during January-April 2024. Staff concurred with the overfinancing strategy, which effectively represents a financing shift between 2023 and 2024, and therefore constitutes a debt management operation with no material impact on the debt level or the DSA.”

A Fund mission visited Dakar in September 2024 to discuss the program. That mission concluded^[5] “… central government debt is expected to remain above the WAEMU convergence criterion of 70 percent”, encouraged the government to “ … place public debt firmly on a downward trajectory”, and suggested “ … further efforts … to address the accumulation of unpaid obligations to private companies”. The mission noted that the Second and Third Program Reviews were scheduled for October 2024 but said nothing about the hidden debt. The Second and Third Reviews have not been held.

The audit of 2024 and the Cour des Comptes report of 2025

The Faye-Sonko regime that^[6] took power on April 2, 2024, commissioned a government audit of public finance, covering the period 2019 through 30 March 2024. The Cour des Comptes (CdC) subsequently reviewed the audit and the report of the CdC was made public in February 2025.^[7]

The report found^[8] inter alia:

• Errors in debt amortization schedules, debt stocks, and bank balances related to public debt;

• Significant overfinancing (taking on more new public debt than was needed to meet deficit financing targets in the years 2019-23);

• Incomplete accounting of public debt;

• Significant off-budget bank debt;

• Budget deficits greater than those stated in official accounts; and

• Stock of public debt greater than those stated in official accounts.

The effect of the Cour des Comptes review was to raise the ratio of public debt to GDP from 80% of GDP to 100%, related to debt contracted by the Sall regime and previously hidden from the public accounts. Much of the hidden debt had been contracted in the first quarter of calendar 2024, immediately after the IMF disbursement of US$279 million; the new debt commitments in the early 2024 were clearly an effort to fund Sall’s campaign for a third term and to deceive the Fund and the Bank.

Reaction of the Bank and the Fund to the Cour des Comptes Report

The Bank took its habitual “Strawberry Fields Forever” view of Senegal’s debt crisis—that the “root causes of fiscal misreporting” were management weaknesses in the Direction Generale de la Comptabilité Publique et du Trésor (DGCPT, the Senegalese public treasury management office)^[9] and not the result of any criminal actions or of political maneuvers by the outgoing Sall regime. The Bank, embarrassed at being caught out by the CdC report, hastily prepared and approved an IDA Credit of US$115 million for a “Fiscal Sustainability Program” in June 2025 . That operation’s objectives were: “To improve public debt sustainability, strengthen public financial management, and increase domestic resource mobilization.” The Bank’s program document says little about corruption, referring only to a few mechanical steps to be taken by the government, and saying nothing about criminal charges.

Those mechanical steps include: (1) issuing new regulations to centralize public debt management, assigning stronger oversight to a public debt committee and improving budgetary controls in the Treasury; and (2) launching an external debt audit by an independent firm, Forvis Mazars.

The IMF, after passing some of the bill for Sall’s corruption to the Bank, stated in August 2025 that it had conducted:^[10]

“ … productive discussions with the authorities on corrective measures aimed at strengthening transparency in public financial management, ensuring reliable budget execution reports, and preserving fiscal sustainability. These measures will help address the systemic issues identified in the Court of Auditors’ report, which confirmed significant data misreporting for the 2019-2023 period.^[11] Following the comprehensive reconciliation exercise conducted by Forvis Mazars, an international audit firm, the authorities have revised the stock of central government debt from 74.4 percent to 111.0 percent of GDP at end-2023. This revision primarily reflects previously undisclosed liabilities. At end-2024, the revised debt statistics showed central government debt reached 118.8 percent of GDP.”

This August 2025 staff visit led to a Fund management brief of its Board, of which we know nothing except a press release from Managing Director Kristalina Georgieva (Bulgaria) on October 3, 2025 “following an informal briefing of the Executive Board on Senegal”. Georgieva stated:

“The Senegalese authorities have made important progress in addressing Senegal’s misreporting case … The authorities are firmly advancing in the implementation of corrective measures to resolve the misreporting issue.”

“I welcome Senegal’s official request for a new IMF-supported program, which demonstrates the authorities’ strong determination to advance their economic reform agenda. Initial discussions regarding the broad contours of the prospective program were already held in Dakar in August and formal negotiations are expected to begin during the IMF-World Bank Annual Meetings in mid-October … We have briefed the Executive Board today on progress made and the status of program discussions. Based on the ongoing work, we are in a good position to move expeditiously forward on all fronts.”

Georgieva said nothing about: (1) the specific progress Senegal has supposedly made in addressing misreporting; (2) corrective measures (no one has been prosecuted, the contracts financed with looted money have not been investigated, and Senegal’s fiscal program has not been revised); (3) the “broad contours” of the “prospective program”; or (4) why no official Fund reports on Senegal have been issued since December 2023.

The Fund has really done nothing about Senegal since December 2023, aside from secret briefings to its Board and the occasional vague mention in press briefings by its official flack Julie Kozack^[12] (USA).

Domestic adjustment or restructuring ?

Abdoulaye Ndiaye and Martin Kessler (January 2026, “NK”) have analyzed the external debt of Senegal, whose interest costs as a share of GDP are the highest in sub-Saharan Africa. NK note the urgency of Senegal’s situation with external debt payments equal to about 2.6 % of GDP due in March alone.^[13] They begin by stating: “With public debt at around 130% of GDP ... We explore two possible paths.” The first path is one of domestic adjustment to a near-permanent primary surplus of 2% of GDP. NK reject the first path which they describe as one of avoiding restructuring “at all costs”. Their second path is for Senegal to “… restructure its debt under an IMF program” involving “new multilateral concessional loans” [and] high-level political commitments from its main bilateral creditors, France and China”.

While rightly endorsing a restructuring as the only way out for Senegal, NK present few details while wrongly arguing that the “Common Framework would be the natural avenue to start these negotiations [on a restructuring]”. NK remark that the government believes a Fund program might re-start in April 2026 but beyond that, and beyond the obvious point that long-term domestic adjustment is infeasible in Senegal’s situation, we do not learn much from NK about why Senegal is rejecting a writedown of a significant fraction of its external debt.

Why does the Faye-Sonko regime reject a restructuring ?

The Faye-Sonko regime has taken no serious corrective measures in its two years in the palace. It has refused the obvious step, as proposed by Ndiaye and Kessler, which is to restructure its external obligations to reduce the net present value (NPV) of its debt service.

The simplest reason for this refusal is that President Faye and PM Sonko are stubborn out of ignorance. I reject the motive of ignorance because we know that they have gotten good advice in public from several of their distinguished compatriots and^[14] it is impossible that they have not gotten the same good advice from the many senior managers of Senegalese nationality in the World Bank.

A second hypothesis is that the members of the Faye-Sonko government are hiding their own complicity. I find this unlikely, given that Faye and Sonko courageously opposed the Wade-Sall regime that ruled from 2000 to 2024, to the point that Sall threw Sonko in prison to keep him from running for President. I do note that criminal investigations of the hidden debt would be a valid test of this hypothesis.

A third reason is that private lenders and bilateral creditors are pushing Senegal not to accept a restructuring because that would damage the interests of those creditors. That reason is certainly valid but it is valid in all debt workouts so why then do the Senegalese not propose a general restructuring ?

The fourth and most likely reason is that the Fund and the Bank are pressing Faye and Sonko to reject a restructuring because that would harm the preferred creditor status of the Bank and the Fund, would devalue the assets of the chief bilateral lenders (France and China), and would create an expensive precedent for the other embarrassed members of the BCEAO.^[15]

How are the Fund and the Bank squeezing Senegal ?

Senegal is in a bind—long-term domestic adjustment is too expensive and its international “partners” are squeezing it to accept a cruel and painful adjustment because they lack the imagination to do anything else. The mechanisms of this squeeze are as follows.

The Fund has surely informed the Senegalese that there is no hope of new money from the Fund (or from other multilateral lenders) until the government takes difficult fiscal measures, notably tax increases and expenditure cuts, beyond the empty promises and weak action plans that are so eagerly accepted by the Bank (and doubtless by the African Development Bank as well).

The other members of the BCEAO would have told the Senegalese that “where we go one, we go all”—in other words, Senegal cannot make a separate deal with its external creditors without the other BCEAO borrowers getting a similar deal.

The oil and gas companies support the fiscal diktats of the Fund by way of the common petro-imperial mechanism of selling future oil today at a steep discount; given the generally low projections of oil and gas revenue to Senegal, and the strong likelihood that future oil has already been mortgaged, there may not be much that the oil companies can do in 2026 absent any large new discoveries.^[16]

The private lenders and the bilaterals continue to refuse any haircut on their assets until comparability of treatment is imposed on the multilateral lenders^[17].

The Fund and Bank are, as always, desperate to protect their own reputations even if means putting a poor country into another decade of indebted servitude while making a few cosmetic changes in staffing. The Fund quietly changed its feckless mission chief in^[18] January 2026; the Bank has exiled its incompetent Department Director (Keiko Miwa, Japan) to some remote place; the Bank is trying to find a sinecure for its West Africa Vice-President Ousmane Diagana (a Mauritanian who surely knows what Sall and his creditors were doing) in hopes of avoiding further humiliation in the region; and the IMF’s Department Director has recently retired after the debacles of the Fund’s programs in Ethiopia, Kenya, Senegal, and Zambia.

[1]. I thank reviewers for comments on earlier drafts. My recent Substack is The Apricot Tree of Tangiers, “What do the IMF and the World Bank owe Senegal”.

[2]. https://www.elibrary.imf.org/view/journals/002/2023/250/article-A002-en.xml

[3]. The MD of the Fund, eager for a second term in 2024, would have pitched the Bank assistance to Ajay Banga as a way of gaining French support for her second term.

[4]. https://www.elibrary.imf.org/view/journals/002/2023/435/002.2023.issue-435-en.xml

[5]. https://www.imf.org/en/news/articles/2024/09/12/pr24329-senegal-imf-staff-concludes-visit

[6]. Bassirou Diomaye Faye is President of Senegal; Ousmane Sonko is Prime Minister. Macky Sall was President of Senegal from April 2, 2012, through April 1, 2024.

[7]. The CdC report omits the obvious fact that significant off-budget borrowing and spending would have been impossible without some involvement of the BCEAO. The first public account of the CdC report is https://www.reuters.com/world/africa/senegals-government-underestimated-financial-situation-court-auditors-says-2025-02-12/

[8]. https://www.courdescomptes.sn/wp-content/uploads/2025/02/Rapport-de%CC%81finitif-sur-la-situation-des-finances-exercice-2019-au-31-mars-2024.pdf

[9]. https://documents1.worldbank.org/curated/en/099120525203577842/pdf/BOSIB-c501989e-6645-439d-a318-48e466c130e0.pdf. The Strawberry Fields Forever view is that “nothing is real/and nothing to get hung about”

[10]. https://www.imf.org/en/news/articles/2025/08/26/pr25282-senegal-imf-staff-concludes-visit

[11]. One wonders why the Fund referred only to 2019-2023. The CdC report covered the period 2019-March 30, 2024.

[12]. Kozack formerly oversaw IMF work on Argentina, among her other jobs in the Fund, so she cannot excuse the generally vague character of her answers on the grounds that she is only a press officer.

[13]. The March 2026 figure is derived as follows from Ndiaye and Kessler (p.11). Estimating Senegal’s GDP at US$36 billion, the CFAF/US$ exchange rate of 550, and external debt payments of FCFA 510 billion gives [510/(36*550)] ~ 2.6% .

[14]. Ndiaye, A. Kessler, M. “A Strategic Compass for Navigating Senegal’s Debt Crisis”, http://findevlab.org/wp-content/uploads/2026/01/FDL_Policy-Note-31_A-Strategic-Compass-for-Navigating-Senegals-Debt-Crisis_Jan26_FINAL.pdf . The Ndiaye and Kessler paper is a bit vague but is a step in the right direction.

[15]. In addition to the fact that a full restructuring would require a meticulous accounting of every loan, official and otherwise, to Senegal; the various banks involved would naturally fear such an accounting.

[16]. Ndiaye and Kessler (p. 16) do not place great hope in a rescue from oil money.

[17]. Senegal is a small example of why the “Common Framework” has achieved nothing and will never achieve anything.

[18]. Mercedes Vera Martin (Spain) replaced Edouard Gemayel (Lebanon) in January, 2026. Gemayel’s reward for his service on Senegal is a transfer to Zambia. The reader will note another part of the Fund’s refusal to see what Sall was doing--Gemayel’s nationality. Senegal is host to a large and rich Lebanese expatriate community. It buggers belief that Gemayel would not have talked to his compatriots about the secret dealings of the Sall regime.