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Senegal

Hidden loans ramp up debt servicing costs

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Finance Ministry say payments will be US$1 billion higher than expected in 2026

Senegal’s debt servicing bill for next year will be almost US$1 billion higher than expected, partly on the back of hidden liabilities accrued by former President Macky Sall.

Finance Ministry figures revealed that debt servicing costs are expected to reach 5.49 trillion CFA francs ($9.7bn) in 2026.

Senegal’s debt increased to 132% of GDP at the end of 2024 after a financial review uncovered around $13bn in spending by Sall’s government that was kept off the balance sheet. The scandal meant that sovereign debt in 2023, before the defeat of Sall’s coalition and the election of President Bassirou Diomaye Faye, was 111% of GDP rather than the 74.4% announced (AC Vol 65 No 7, Historic vote could set a new economic path).

The issue has already partly derailed President Faye’s economic planning, prompting the IMF to suspend its $1.8bn support program for Senegal, while Standard & Poors and Moody’s rarings agencies have both downgraded their credit ratings, making it more expensive for the government to borrow.

Faye and Prime Minister Ousmane Sonko have so far remained popular but they have  to find nearly $10bn by 2028. That means increasing taxes, cutting spending and renegotiating energy contracts and could alienate some of their supporters (AC Vol 66 No 13, Pressure mounts on President Faye over political reforms and anti-corruption drive). It will be easier for them to rid that out if Senegal’s GDP growth hits the 7.8% projected this year.

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