Rising Debt: A Pressing Concern for Senegal
The Senegalese government is grappling with escalating public debt, intensified by a decrease in external financing and growing demands on public finances. This situation is causing widespread concern, with entities such as the International Monetary Fund (IMF) closely monitoring developments. Official statistics reveal a significant uptick in public debt at the end of the first quarter of 2025. Debt service alone surged by 44.5% year-over-year in the fourth quarter of 2024, amounting to 822.32 billion CFA francs (approximately 1.4 billion USD). This trend continued into the first quarter of 2025, with an additional 23.98% increase compared to the previous year. Such fiscal strains reflect deeper structural issues within the economy.
The Disparity Between Income and Expenditure
Senegal’s public expenditures remain vast compared to its revenues, with public spending estimated at 1,419.45 billion CFA francs (2.4 billion USD) against revenues of only 1,027.82 billion CFA francs (1.75 billion USD), accounting for merely 21.4% of annual objectives. This persistent imbalance exacerbates the structural deficit, which is further strained by a dramatic 71.5% decline in foreign donations over the past year. Notably, two-thirds of the debt stems from banks, mainly local, in the form of short-term loans and sovereign bonds. The remainder comprises operational arrears, including unpaid subsidies and outstanding invoices in the construction and energy sectors.
Strategic Optimism: Economic Plans Anchor Hopes
Despite the gloomy fiscal landscape, the Senegalese government is cautiously optimistic. During the African Trade and Investment Development Insurance (ATIDI) general assemblies, authorities outlined an ambitious economic strategy aimed at leveraging the anticipated petroleum and gas production by 2050. This initiative is projected to drive GDP growth to 8.8% as early as 2025, according to official forecasts. Such optimism underscores the government’s confidence in overcoming current economic headwinds through strategic natural resource management.
Reviving Credibility: IMF Engagements Resurface
Amid persistent budgetary imbalances, Senegal is eager to restore its credibility with international donors. Dialogues with the International Monetary Fund (IMF), which were previously stalled in 2024 due to data reporting irregularities, have resumed and are reportedly progressing well according to local authorities. The prospective agreement includes reforms, particularly in energy subsidies, where arrears accumulated to over 146 billion CFA francs (248 million USD) by the end of 2024. This accord is expected to enhance fiscal discipline, targeting a reduction in the public deficit to below 3% of GDP by 2027.