Senegal faces 130% of GDP debt crisis, weighing IMF restructuring against default

Senegal has disclosed a hidden debt level equal to 130% of its GDP, driven by off‑balance‑sheet borrowing for large infrastructure projects such as the $2.5 bn Dakar‑Bamako railway and the $1.2 bn Grand Dakar port expansion. The surge in debt, largely non‑concessional sovereign loans, has eroded creditor confidence and raised the prospect of a sovereign default.

The government must decide before the end of the month whether to accept an IMF‑led restructuring package, which would bring tighter fiscal oversight but preserve market access, or risk default on Eurobonds maturing in 2027‑2028. President Bassirou Diomaye Faye supports restructuring, while opposition leader Ousmane Sonko, who controls the legislative motion of censure, warns that such a deal could deepen dependence on the IMF and damage Senegal’s financial reputation. Analysts warn the crisis could spread to neighboring Sahel economies if creditors impose harsh terms.

The debt dilemma pits short‑term fiscal stability against long‑term sovereignty, with the IMF’s upcoming debt‑sustainability review poised to shape Senegal’s economic trajectory.