The International Monetary Fund said on Thursday that it had reached significant progress with Senegal on the creation of a new loan programme, even as it continued an internal investigation into how billions of dollars in unreported debt went unnoticed under its watch.
Senegal is grappling with an unexpectedly large debt burden that the Fund estimates reached 132% of gross domestic product by the end of 2024. The figure rose sharply after the current government revealed extensive debts that were never declared by the previous administration. The discovery has shaken confidence in Senegal’s financial management and prompted questions about how such obligations could remain undisclosed for so long.
Speaking at a press briefing, the Fund’s communications director, Julie Kozack, said discussions with Dakar were advancing at pace. She noted that both sides were “working intensively on the design of the new programme and the measures that were needed to address the root causes of the hidden debt”. The new arrangement is expected to focus on better oversight of public borrowing, tighter controls on state owned enterprises, and clearer reporting standards.
Kozack acknowledged that Senegal faces significant debt vulnerabilities but stressed that the decision to restructure any of its obligations would rest with the Senegalese authorities. The country must balance urgent fiscal pressures with the political consequences of any potential restructuring, especially at a time when public confidence has been tested by the debt revelations.
The unreported liabilities came to light while Senegal was still under a 1.8 billion dollar IMF loan arrangement, which the Fund suspended last year following the emergence of the discrepancies. The suspension has forced the government to operate without the financial cushion that the previous programme offered, adding pressure to secure a new agreement.
Kozack said the IMF was also scrutinising its own procedures to understand how the unreported debts escaped detection. “We are conducting an internal review to understand how these discrepancies went undetected, and also to reinforce safeguards in our own processes,” she said.
The review will examine the Fund’s data integrity frameworks, strengthen its internal review mechanisms, and aim to improve its ability to identify irregularities in the future. It will also include enhanced staff training to ensure that potential inconsistencies in member states’ financial reports are identified more quickly.
For Senegal, the stakes are high. A credible new IMF programme could help restore investor confidence, stabilise public finances and rebuild trust in the country’s economic governance. It would also signal a renewed commitment to transparency after a period in which opaque financial practices have clouded the country’s reputation.
As both sides push forward, the immediate priority remains clear: prevent a recurrence of hidden debt and put Senegal on a more sustainable fiscal path.
