Senegal faces financial strain despite paying millions in debt

Senegal has finalised its payment of nearly half a billion dollars towards its debt obligations, helping the country avoid a potential default, according to Africa News and agencies on March 14th. 

Although the payment has reassured international lenders, the West African country still continues to face financial and political unrest that could make their journey ahead challenging.

This payment seems to be a major test for President Bassirou Diomaye Faye, who has been attempting to untangle a financial mess. It was reported on May 27th that Amadou Mansour Faye, the former minister and brother in law of ex-president Macky Sall,was indicted for allegedly embezzling over $4.6 million in public funds. 

The Central Bank of West African States sent roughly 380 million euros to investors holding Senegal’s eurobonds. An additional $33 million was also paid to cover bonds issued in U.S. dollars. 

The government managed to secure the funds by raising money through regional financial markets. This came after the International Monetary Fund (IMF) suspended its program with Senegal following the discovery of $13 billion in previously undisclosed debt. Investors described it as the biggest hidden debt ever uncovered in a country that was under an IMF-supported program.

While the government’s effort to fix the system have made many people more inclined to support the president it has not stopped the growing unrest on the streets.  Just last month, anger over unpaid grants combined with violent student protests has shown that many are losing patience. The unrest led to the death of the medical student, Abdoulaye Ba.

Looking ahead, Senegal plans to raise about 4.1 trillion CFA francs from regional markets in 2026. But analysts warn the country will still need billions in affordable long-term financing to manage its rising debt, which has reached about 132 percent of its GDP.

Africa News and agencies, Maghrebi.org