Senegal is currently grappling with a severe debt crisis, with the International Monetary Fund (IMF) estimating the country's debt at a staggering 132% of its Gross Domestic Product (GDP) by the end of 2024. This escalating debt burden translates into projected debt servicing costs of 5.5 trillion CFA francs, equivalent to approximately $9.1 billion, for the current year. These costs are consuming an ever-increasing portion of Senegal's tax revenue. Despite the pressing need for a debt restructuring, Senegalese Prime Minister Ousmane Sonko has explicitly ruled out this option. In response, the government has announced the closure of 19 agencies, aiming to save an estimated 55 billion CFA francs (about US$97.95 million) over a period of three years. A recent comprehensive report has thoroughly examined the significant implications of two primary pathways: attempting to repay the debt at all costs versus considering a default. Abdoulaye Ndiaye, one of the report's authors, provided an in-depth analysis of what each approach could mean for the nation in an interview with The Conversation Africa.

The origins of Senegal's debt crisis can be traced back to September 2024, when the new government disclosed irregularities within debt reports. This revelation prompted the IMF to freeze its US$1.8 billion credit facility for Senegal in October 2024. Further exacerbating the situation, in February 2025, Senegal's Court of Auditors, the supreme authority for public finance auditing in the country, revealed that the national deficit had been consistently underestimated by 5.6% of GDP per year between 2019 and 2023. This critical finding led to a sharp increase in the debt-to-GDP ratio, from 74% to 100%. From March to October 2025, despite multiple missions to the country, the IMF program remained suspended. Subsequently, the government released a revised 2025 budget and a medium-term outlook, which then estimated the debt at 120% of GDP. A month later, an extended two-week IMF visit highlighted growing public tension between the IMF and the Senegalese government, leading directly to a collapse in government bond prices. Under immense pressure, Prime Minister Ousmane Sonko publicly committed to exhausting all measures to avert a default.

Senegal's current strategy, which aims to repay its debt at all costs, is predicated on two highly optimistic assumptions. The first is the achievement of massive budget consolidation within an exceptionally short timeframe. This ambitious goal requires the country to transition from a primary deficit of approximately 14% of GDP in 2024 to a 2% surplus, a feat that very few nations have accomplished, typically requiring a substantial natural resource windfall, as seen in cases like Antigua and Barbuda. The second assumption relies on the hope that key international players, including the IMF, will deem Senegal's debt sustainable and continue providing loans during these challenging times. To adequately cover its existing deficit and meet debt obligations due between 2026 and 2028, the government faces the daunting task of raising 15 trillion CFA francs, equivalent to US$25 billion.

The feasibility of this repayment strategy faces significant hurdles. While the IMF is generally recognized as the most suitable institution to support countries in crisis, with programs designed for such situations and offering low-cost or zero-interest loans to low-income nations, its own rules stipulate that a program can only be approved if its debt analysis confirms the debt's sustainability. Therefore, it is unlikely that the IMF would lend if Senegal's debt is deemed unsustainable. Should the IMF be unable to provide assistance, Senegal might seek support from emerging lenders, similar to Egypt and Kenya, which secured loans in 2024 from countries like the United Arab Emirates despite concerns about their solvency. However, such support typically comes with a steep price, including tougher conditions and potentially painful privatizations. Another avenue considered is regional financial markets, which lent Senegal over 4 trillion CFA francs (US$6.7 billion) in 2025. While they could continue this support, it would likely be at a reduced scale and carries the risks of crowding out lending to the private sector and exposing the banking sector to increased vulnerabilities. Ultimately, this