Senegalese Economic Crisis Under Sonko Presidency: IMF Program Suspension

• Senegal's fiscal and financial margins have significantly reduced due to a combination of factors.
• The country lost its certification of creditworthiness after suspending the IMF program in 2024-2026.
• Moody's downgraded Senegal from Ba3 to Caa1 in just twelve months, while S&P lowered the note to CCC+.
• Investment development has plummeted by 98.9%, falling to $37 million according to the UNCTAD.
• The government was forced to borrow over $5 billion on regional UEMOA markets at rates near 9%.

Cet état des lieux n’est pas une simple accumulation de chiffres : il constitue la preuve d’une stratégie de déstabilisation, dont l’effet a été de piéger le président de la République et de rendre le pays « ramassable » en 2029.

The economic situation in Senegal has been deteriorating since the presidency of Bassirou Diomaye Faye. The country's fiscal and financial margins have significantly reduced due to a combination of factors, including a decline in non-hydrocarbon growth from 8% to less than 3%, a budget deficit explosion to 13.4% of GDP, and a revised public debt reaching 119% of GDP. Moody's downgraded Senegal from Ba3 to Caa1 in just twelve months, while S&P lowered the note to CCC+. The country's investment development has plummeted by 98.9%, falling to $37 million according to the UNCTAD. As a result, the government was forced to borrow over $5 billion on regional UEMOA markets at rates near 9%, compared to 1.5% for concessionary financing.

The suspension of the IMF program in 2024-2026 has had a ripple effect on Senegal's economy. The country lost its certification of creditworthiness, which led to a drying up of conditional multilateral financing essential for stabilizing the treasury and supporting public investments. As a result, Senegal was forced to turn massively to regional UEMOA markets, borrowing at rates near 9% where concessionary financing rates were around 1.5%. This trend has been exacerbated by Moody's four consecutive downgrades in twelve months.

The economic situation in Senegal is a cause for concern, particularly for lawyers and compliance officers who need to monitor the country's economic situation and potential implications on investment and trade agreements. The reduction in fiscal and financial margins has significant consequences for the government's ability to implement policies and make decisions. Moreover, the impact of the IMF program suspension and subsequent downgrades by Moody's and S&P have far-reaching effects on the economy, including reduced investment development, increased borrowing costs, and a higher public debt burden.

This development highlights the significant reduction in Senegal's fiscal and financial margins, making it essential for lawyers and compliance officers to monitor the country's economic situation and potential implications on investment and trade agreements.

Source: Original reporting via Quand l’ambition politique détruit l’État