Senegal has not received a single dollar from the International Monetary Fund, and its debt has not fallen by a single franc.
On September 1, 2026, the country’s authorities and IMF staff concluded a technical agreement on a programme of about $2.2 billion over 36 months.
It remains subject to corrective measures over past misreporting, financing assurances and board approval.
Since then, two markets have been judging the same signature: the international eurobond market and the regional public securities market of the West African Economic and Monetary Union (Uemoa).
Florent Kanga Gbongué, an economist specialising in finance, financial markets, risk management and sovereign debt, explains the stakes of Senegal’s agreement with the IMF.
Que change concrètement l’accord avec le FMI dans la gestion de la dette du Sénégal ?
The agreement changes how the debt is managed, not yet its size. It sets a three-year budget framework, conditions the return of concessional financing and opens the way to a negotiated treatment with creditors.
The Court of Auditors reassessed the 2023 deficit at 12.3% of GDP, against 4.9% announced.
According to the IMF, the debt reached close to 119% of GDP for central government at the end of 2024, and about 132% for the entire public sector.
The government has presented a treatment plan in parallel. It intends to exclude debt denominated in CFA francs, to preserve the regional market, and to use the G20 Common Framework; around $5 billion of eurobonds would be concerned.
On September 11, the Treasury raised 101.3 billion CFA francs ($170 million) on the regional market, at 7.89% over five years.
At the same time, its eurobonds were trading at around half their face value, and S&P lowered Senegal’s foreign-currency rating to CC, indicating an extremely high risk of default. Two markets, one debt, two prices.
Kanga Gbongué calls this gap the perimeter premium. It is partly a matter of rules.
In Uemoa, which brings together the eight countries using the CFA franc, government securities denominated and funded in CFA francs are weighted at 0% in the calculation of banks’ required capital.
Held to maturity, they carry no capital charge, and their depreciation for credit risk remains optional.
This arrangement has a real use: it facilitates states’ financing and limits forced sales of public securities by banks during periods of tension.
But it also carries a risk: by delaying the accounting and prudential recognition of a deterioration, it can make the problem less visible without making it disappear.
These rules do not remove sovereign risk; they mainly influence when and how it appears in banks’ accounts.
Read more: Crise de la dette sénégalaise : une boussole pour s’orienter
Quels sont les principaux enjeux de cet accord pour les finances publiques sénégalaises ?
The stock balance sheet requires a fully inventoried debt, including guarantees, public enterprise commitments and arrears.
A useful indicator is the stock-flow adjustment, meaning the gap between the change in debt and the budget deficit.
When it is durably high, that gap must be explained: it can reflect legitimate financial operations, but also commitments insufficiently recorded in the public accounts. In Senegal’s case, the Court of Auditors’ findings precisely highlighted the importance of this reconciliation.
The budget balance sheet measures the real burden: in 2026, scheduled interest represents about one-fifth of revenues. The liquidity balance sheet is tighter.
On a financing need of $10.63 billion, more than $7.53 billion amortises principal: seven francs borrowed out of ten repay old loans.
The debate between reprofiling and restructuring is therefore not semantic.
If the problem is mainly one of liquidity, extending maturities – that is, pushing back the dates on which the state must repay the principal of its loans – may suffice.
If it is one of solvency, only a reduction in present value will restore sustainability. The programme’s viability analysis will decide; the IMF has recalled that the Common Framework does not predetermine the type of operation.
The more CFA-franc debt is protected, the more the effort falls on eurobond holders or on the budget. The perimeter premium is the price the market attaches to that choice.
Quels effets cet accord pourrait-il avoir sur la croissance et l’investissement au Sénégal ?
The 6.7% growth of 2025 owes much to hydrocarbons: the economy outside oil and gas, which creates jobs, grew by only 2.2%. For 2026, the IMF forecast 2.2% in April, the government 2.5%.
In a study covering more than 20,000 banks in 191 countries, economists Nicola Gennaioli, Alberto Martin and Stefano Rossi show that government securities represent on average 9% of bank assets.
They also find that in the event of a state default, the most exposed banks cut their lending to the economy more sharply. In Uemoa, government securities are estimated at between 25% and 35% of bank assets.
According to Fitch Ratings, the Union’s banks’ aggregate exposure to states would be equivalent to about three times their equity.
Read more: Crise de la dette: les quatre leviers qui peuvent aider le Sénégal à éviter la restructuration
IMF studies show that restructuring domestic debt brings less relief, and costs more durably in growth and credit, than restructuring external debt.
In a system where banks hold a high share of public debt, preserving the regional market is less a favour granted to local creditors than a financial stability precaution.
Authorities in the Eastern Caribbean Currency Union had made the same choice.
Protecting is not, however, erasing. The recent experience of the [country] illustrates this: a prudential derogation had allowed, from January 2024, unpaid government securities to be kept temporarily in the category of healthy loans.
When it ended, in April 2025, the banks concerned had to reclassify these exposures. A prudential rule can therefore defer recognition of risk, but it does not cancel it.
Kanga Gbongué’s ongoing work on the link between states and banks in Uemoa suggests that the duration of exposure, even more than its level at a given moment, can amplify the transmission of sovereign risk to credit.
The settlement, as announced, of the coupon due on September 13 – interest paid periodically to bondholders – was followed by a rebound in Senegalese international bonds, without dispelling uncertainty over the modalities of the treatment to come.
A study shows that restructurings undertaken before a payment default are, on average, faster to negotiate, associated with more limited haircuts and with smaller output losses than those undertaken after a default.
Quelles marges de manœuvre le Sénégal conserve-t-il pour réduire durablement sa dette ?
Broadening the tax base and reducing inefficient exemptions will contribute more to restoring public finances than uniform budget cuts.
Recomposing spending will make it possible to protect high-return public investment and targeted social transfers. A savings rule on oil and gas revenues can also reduce budget vulnerability.
Concretely, it would consist of paying into a dedicated fund the exceptional or unexpected share of these revenues, rather than using it immediately to finance current spending.
These resources could then serve to amortise debt, to stabilise the budget when prices or production fall, or to finance clearly identified public investments.
Finally, clearing arrears would restore cash flow to companies the state is slow to pay.
Kanga Gbongué’s work on Uemoa estimates that at around 62% of GDP, markets begin to reassess sovereign risk more sharply, well before the community ceiling of 70%.
This estimate is a market signal, not a norm mechanically applicable to all states. The IMF has also noted that sovereign restructurings have often occurred “too little, too late”.
Five public indicators would make it possible to track the results: the stock-flow adjustment, the share of interest in revenues, the debt falling due during the year, banks’ exposure to the state and the evolution of credit to the private sector.
A sixth indicator sheds light on them: the perimeter premium.
With Lambert N’Galadjo Bamba, Kanga Gbongué has developed models that distinguish, within the regional sovereign premium, credit risk from liquidity risk.
Applied to market data available after September, they will make it possible to establish whether the gap is narrowing because confidence is returning, or because accounting and prudential rules are deferring its recognition.
A final precaution concerns debt ratios. The revision of the national accounts base, which raises the estimated level of GDP by about 13.5%, will mechanically reduce the debt-to-GDP ratio.
It will not, however, reduce the nominal amount of the debt, the interest to be paid, or the repayment schedules.
Florent Kanga Gbongue does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Source: The Conversation
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“excerpt”: “Senegal’s technical agreement with the IMF on a $2.2 billion programme has not yet delivered any funds or reduced the debt. The international eurobond market and the regional Uemoa market are pricing the same sovereign debt very differently, a gap economist Florent Kanga Gbongué calls the perimeter premium.”
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