IMF Sees Path to Senegal Debt Deal Despite Timeline Uncertainty

The International Monetary Fund has expressed confidence that Senegal can reach an agreement with its creditors, while cautioning that the length of the renegotiation process remains uncertain.

IMF Managing Director Kristalina Georgieva said the Fund would support Senegal through a staff-negotiated agreement covering a $2.2 billion programme. The treatment of the country’s debt is still being worked out between Dakar and its creditors.

Speaking in Bangkok during the annual meetings of the IMF and the World Bank, Georgieva said discussions with major creditors showed that they understood the importance of Senegal’s case.

“My conversations with key creditors show everybody understands this is the test case to the playbook we have adopted through the Global Sovereign Debt Roundtable,” she said.

Georgieva also linked the negotiations to the effectiveness of the G20’s debt treatment framework. She said the outcome would indicate whether changes to the framework were producing results.

“It is very important that we demonstrate that yes, indeed, the G20 common framework is improved, enhanced, and it can deliver results quickly,” Georgieva said.

Debt reassessment

Senegal’s financial difficulties intensified after the discovery in 2024 of undeclared public debt incurred by the previous administration. Subsequent audits reassessed the country’s debt at approximately 130 per cent of gross domestic product, including obligations linked to state-owned enterprises and government guarantees.

The revelations led to the suspension of an earlier IMF programme and contributed to a decline in investor confidence.

The G20 and the Paris Club launched their debt treatment initiative in November 2020 to help low-income countries facing unsustainable debt manage insolvency or liquidity pressures. The process has faced criticism over the pace of negotiations, including in Zambia and Ghana.

Unclear timetable

The IMF has not set out a timetable for Senegal’s debt negotiations. Dakar hopes an initial disbursement under the programme could be made as early as November and that an agreement in principle with creditors could be reached in December.

Those targets remain expectations rather than confirmed dates. The IMF’s stated optimism therefore comes alongside continued uncertainty over when the debt treatment will be completed.