IMF Sees Path to Senegal Debt Deal but Timeline Remains Unclear

The International Monetary Fund says it is optimistic that Senegal can reach an agreement with its creditors, while cautioning that the timeframe for resolving the country’s debt situation remains uncertain.

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

“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,” Georgieva said.

Test for the G20 framework

Georgieva said the outcome of Senegal’s negotiations would indicate whether changes to the G20 debt treatment framework were delivering the faster results intended.

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

The G20 and the Paris Club launched the debt treatment initiative in November 2020. It was designed to help low-income countries facing unsustainable debt address insolvency or liquidity problems.

However, the initiative has faced criticism over the slow pace of negotiations, including in Zambia and Ghana. Senegal’s case is therefore being watched as another test of whether the framework can support a more effective restructuring process.

Senegal’s debt crisis

Senegal’s financial crisis followed 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 liabilities linked to state-owned enterprises and government guarantees.

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

Dakar hopes an initial disbursement under the proposed programme could be made as early as November, while it is also hoping to reach an agreement in principle with creditors in December. Those dates remain targets rather than confirmed milestones.

The IMF has not announced a definitive timetable, and negotiations between Senegal and its creditors are still continuing.