Key facts
- Senegal's central government debt reached 25.2 trillion CFA francs ($44 billion) at the end of 2025.
- Arrears stood at 1.956 trillion CFA francs ($3.42 billion) as of March 2025.
- The government raised its deficit forecast to 7.6% of GDP.
- France and China are Senegal's largest bilateral creditors.
- Multilateral lenders held about 40% of external debt in 2024.
- CFA franc-denominated debt accounts for roughly 30% of central government debt at end-2024.
Senegal is grappling with a significant debt burden that requires careful management and negotiation with international creditors, particularly the International Monetary Fund (IMF). The nation's debt-to-GDP ratio climbed to approximately 130% in 2024 following the revelation of misreported debts. President Bassirou Diomaye Faye has indicated a swift approach to debt resolution, aiming for a treatment within months, though the complexity of the situation and potential for investor losses, known as "haircuts," remain significant concerns.
Central government debt stood at 25.2 trillion CFA francs ($44 billion) by the end of 2025, with arrears amounting to 1.956 trillion CFA francs ($3.42 billion) as of March 2025. Prime Minister Ahmadou Al Aminou Lo has warned that these arrears are hindering economic activity. The government recently revised its deficit forecast upward to 7.6% of GDP, citing increased energy subsidies, higher debt servicing costs, and declining revenues.
France and China are Senegal's primary bilateral creditors and are expected to lead discussions on behalf of the Paris Club. However, China's past stance in debt restructurings for Ethiopia and Zambia suggests that negotiations may be challenging, particularly regarding the "comparability of treatment" principle for other lenders. The IMF and World Bank, along with some other multilateral lenders and short-term export credit facilities, are typically shielded from losses. This means that approximately half of the external debt stock could be subject to any relief measures, raising concerns for bondholders.
Senegal has stated that debt denominated in CFA francs, which constitutes about 30% of its central government debt, will not be part of the debt rework. This exclusion, however, could increase the burden on external creditors, especially as Senegal has increased its regional borrowing significantly in recent years. S&P noted that the substantial domestic debt raises the possibility of local-currency obligations being included in a broader debt treatment.
Further complicating matters are Senegal's use of total return swaps (TRS), a derivative-based financing structure backed by local-currency government bonds, which raised $1.26 billion in net financing by end-2025. The IMF has expressed concerns about the opacity of TRS, and their treatment in sovereign restructurings remains largely untested, with Fitch warning that the Common Framework is not adequately equipped to handle them.