Sénégal DGFD Creation Sparks Governance Reforms for Public Finance

• A financial crisis in 2024 exposed the need for refounding the government's institutions responsible for budget preparation, execution, control, and evaluation.
• The Court of Auditors' report revealed a hidden debt crisis, with the central administration's debt reaching 99.7% of the GDP by the end of 2023.
• The IMF estimates the total public debt at around 132% of the GDP as of 2024.
• Seven key reforms are proposed to establish a new governance structure, prioritizing transparency, independence, and accountability.
• The creation of the DGFD and the proposed HCGFP may require lawyers to advise clients on compliance with these new structures and regulations.

Le véritable problème n'est pas le niveau de la dette. C'est que le système n'a pas permis de détecter les dérives à temps.

In 2024, a financial crisis revealed the need for more than just budgetary adjustments. The government's institutions, responsible for preparing, executing, controlling, and evaluating the state budget, needed to be refounded. A report by the Court of Auditors in February 2025 exposed that the central administration's debt had reached 99.7% of the country's GDP by the end of 2023, 25 points higher than officially reported figures. The actual budget deficit was 12.3% of the GDP, compared to the 4.9% announced. The IMF now estimates the total public debt at around 132% of the GDP as of 2024. However, the real issue is not the level of debt but rather the failure of the system to detect irregularities in time. For years, significant commitments were made outside of the budgetary framework without any monitoring or oversight from internal controls, parliamentary review, or community surveillance.

The creation of the Direction générale des Financements et de la Dette (DGFD) in June 2026 marked a significant step towards establishing a new governance structure. The DGFD unifies previously dispersed functions, addressing the root cause of the hidden debt crisis. However, building on this foundation requires further reforms to ensure transparency, independence, and accountability. Seven key reforms are proposed: anchoring the budget within a multi-annual trajectory, instituting an independent sentinel institution, increasing public finance transparency, enhancing independent budget oversight, strengthening parliamentary control, promoting participatory governance, and implementing a new framework for debt management. The creation of the DGFD and the proposed Haut Conseil de Gouvernance des Finances Publiques (HCGFP) may require lawyers to advise clients on compliance with these new structures and regulations.

The passage from a first-generation governance structure, which modernized texts but failed to build institutions, to a second-generation one that prioritizes transparency, independence, and responsibility is crucial. This shift will enable the Sénégal to learn from other countries' experiences and adapt its own system accordingly. The creation of the DGFD and the proposed HCGFP are essential steps towards establishing a robust public finance governance framework. By anchoring the budget within a multi-annual trajectory, instituting an independent sentinel institution, and promoting participatory governance, the Sénégal can prevent similar crises from occurring in the future.

The creation of the DGFD and proposed HCGFP may require lawyers to advise clients on compliance with new governance structures and regulations, particularly in relation to public finance transparency and independent budget oversight.

Source: Original reporting via Le Monde