Key takeaways:
- The African Development Bank approved 20 billion CFA francs ($35.4 million) to help Senegal
- Senegal’s public debt burden is estimated at 132% of GDP
- Senegal is also in talks with the IMF for a new loan
The African Development Bank has approved 20 billion CFA francs ($35.4 million) in financing to help Senegal strengthen its public finance management, as the West African country works to contain a debt crisis that has shaken investor confidence.
The AfDB said in a statement on their official website that the funding is intended to help Senegal increase domestic resource mobilization, implement structural reforms, and strengthen public finance management and transparency. It was not immediately clear whether the financing is structured as a grant or a loan.
Wilfrid Abiola, head of the AfDB’s Senegal country office, said the operation reflects the bank’s continued support for the country’s reform agenda.
“Through this operation, the African Development Bank reaffirms its commitment to standing alongside Senegal to consolidate economic reforms, strengthen domestic resource mobilisation, and create the conditions for more resilient growth,” Abiola said.
How Senegal’s debt crisis unfolded
Senegal’s debt troubles trace back to September 2024, when the government of President Bassirou Diomaye Faye disclosed that fiscal deficits and public debt reported under former President Macky Sall had been significantly understated for years.
A February 2025 audit by Senegal’s Court of Auditors found that hidden deficits averaged approximately 5.5% of GDP annually between 2019 and 2023, implying actual deficits closer to 11% of GDP.
Estimates of the previously unreported debt have varied, with the IMF’s calculations based on end-2023 figures identifying more than $11 billion, while some market and credit-rating analyses put the figure at approximately $13 billion.
The fallout has been steep. Senegal’s public debt burden is now estimated by the IMF at around 132% of GDP, and the Fund has cut its 2026 growth forecast for the country to 2.2%.
IMF talks continue as default risk looms
Meanwhile, Senegal is in discussions with the IMF for a new loan program after the Fund suspended its previous $1.8 billion credit line in October 2025 following the debt revelations.
Its former Prime Minister, Ousmane Sonko, has repeatedly ruled out debt restructuring, describing an IMF-proposed restructuring plan as a “disgrace” and saying the government prefers to address its debt burden through measures such as raising domestic revenue rather than defaulting or restructuring.
Analysts have warned that without IMF support or a restructuring deal, Senegal risks an eventual default.
Recent domestic borrowing has come at a steep cost, with the government raising funds through Treasury bills and bonds at weighted average yields of 6.81% for 364-day bills and 7.98% for three-year bonds in a mid-April sale, reflecting the premium investors are demanding given Senegal’s elevated default risk.
