IMF says it’s ready for a new funded program to Senegal

By: Chidozie Nwali

The International Monetary Fund (IMF) said significant steps have been taken towards laying the foundation for a new loan package to Senegal, following the conclusion of a two-week mission to Dakar, where the fund noted that  the West African economy has shown resilience in the face of global uncertainties and tight financial conditions. IMF said in a statement late Thursday.

A major focus of the mission was addressing the severe fiscal and debt vulnerabilities revealed by the past administration’s undisclosed borrowing, which led to the suspension of a prior $1.8 billion IMF program in 2024.

Mr. Edward Gemayel, IMF Mission Chief for Senegal, said the Senegalese authorities have shown transparency in addressing its hidden debts and are also focused on improving its fiscal deficit.

“The authorities deserve recognition for their continued commitment to transparency, fiscal discipline, and sound macroeconomic management.” He said.

“This mission has provided a solid basis for moving forward, and we look forward to continuing our dialogue in the coming weeks to finalize agreement on the remaining policies and reforms that will underpin the new program.” He said.

Senegal’s economy remains robust in 2025, supported by the first full year of oil and gas production and a rebound in agriculture. The IMF projected Real GDP growth at about 7.9 percent this year.

Overall deficit is projected to narrow sharply from 13.4 percent of GDP in 2024 to 7.8 percent in 2025. According to the fund.

Also, the draft of Senegal’s 2026 Budget targets a further reduction of the deficit to 5.4 percent of GDP.

The West African country faces scrutiny over hidden debts from the prior administration, leading the IMF to freeze its $1.8 billion USD loan program after uncovering misreported deficits.

However, IMF said this misreporting are been addressed and the Senegalese authority has shown transparency by carrying out an audit of its total debt and correct figures are been provided.

In October Moody credit rating agency downgraded Senegal’s long-term foreign and local currency issuer ratings to Caa1 from B3; pushing the West African country’s ratings deeper into non-investment-grade territory.

Moody cited increased risks to Senegal’s debt trajectory and liquidity position, largely stemming from the revelations of substantially higher public debt figures following a government audit earlier this year.

Meanwhile, the Ministry of Finance and Budget  in Dakar, rejected the downgrade stating that it “does not reflect the reality of the country’s economic fundamentals, nor the public policy measures currently being implemented to consolidate budget stability and reinforce debt sustainability-calling the move “speculative, subjective, and biased.”