Senegal’s hidden debt sparks questions about IMF’s oversight
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Article summary
- IMF missed elevated level of debt despite its involvement in the country since 2019.
- Levels of underestimated debt only the “tip of the iceberg”, as IMF misses other key data in previous projections.
Senegal is facing unforeseen elevated debt problems, sparked by the country’s Court of Auditors March report documenting that it had taken on undisclosed loans equivalent to 25 per cent of its GDP between 2019 and 2024. Although Senegal has been under several IMF programmes since 2019, the substantial additional borrowing was apparently not uncovered by the Fund.
According to International Development Economics Associates (IDEAs), a July 2024 public audit found Senegal’s public debt at the end of 2023 was 99 per cent of GDP – while earlier in the year the government had reported 74 per cent debt-to-GDP ratio. Afroenomics Law highlighted in October that this debt rose to 110 per cent of GDP in 2024, and up to 118 per cent at the end of the year. The IMF has suggested this discrepancy was due to misreporting from the Government of Senegal.
However, IDEAs stressed that the oversight poses questions about the IMF’s quality control, with the Fund missing various opportunities to identify the issue, “in mission after mission over five years…in the balance of payments, in the monetary survey, in the national accounts, and, of course, in the fiscal accounts.” The IMF suspended its $1.8bn credit facility to Senegal in 2024, following the audit findings.
Senegal’s underestimated debt is only the “tip of the iceberg”
IDEAs had previously found major errors in the IMF’s October 2024 World Economic Outlook projections for Senegal, particularly on inflation where the Fund forecast increases for Senegal far above its own global estimate of 2 per cent (–13.4 and 41.9 per cent for 2025 and 2026, respectively). IDEAs claimed that the fact that the IMF was getting a core macroeconomic indicator like inflation so wrong over such a short period was just the “tip of the iceberg”. It noted that IMF’s numerical miscalculations – which in some cases have driven overly optimistic Debt Sustainability Analyses (see Inside the Institutions, What is the World Bank & IMF debt sustainability framework for low-income countries?) – have led to inappropriate conditionality being imposed in other countries in Africa, as seen in the most recent IMF programme review for Kenya (see Observer Autumn 2024, Autumn 2023).
Senegal’s Parliament recently committed to recognise this undisclosed debt as part of an omnibus fiscal bill. However, no steps have been agreed to determine how Senegal has got to this point nor to assess its implications for IMF global operations and systems.
According to a 9 November Reuters article, the current government has blamed this hidden debt on its predecessor. Prime Minister Ousmane Sonko noted his opposition to a potential debt restructure once the ongoing IMF debt sustainability assessment has been finalised noting, it “would be a disgrace for Senegal,” as seen in other cases across the African continent (see Observer Spring 2025; Dispatch Springs 2023). In August, Sonko announced a new economic recovery plan for Senegal, pledging to finance 90 per cent of the initiative through domestic resources and avoid additional debt.
On 14 November S&P downgraded Senegal’s credit rating to CCC+ (from B-), warning of further cuts if the government does not manage to refinance the debt. Conversations between the government and the IMF on the country’s options for debt restructuring are still ongoing.
