Senegal to settle 1,900 billion FCFA in public arrears

The Senegalese government has announced a plan to settle 1,900 billion FCFA (approximately 2.9 billion euros) in public arrears, an amount representing nearly 10% of the nation's 2024 GDP. This operation aims to prioritize small and medium-sized enterprises (SMEs) that have faced severe liquidity crises due to unpaid state invoices, public procurement delays, and uncompensated tax credits.

The debt crisis follows revelations by the Court of Auditors in February 2025 regarding underestimated public debt and financial misreporting. This discovery led to a freeze in aid from the International Monetary Fund (IMF), necessitating alternative financing methods.

During a parliamentary inquiry on October 15, 2026, Amadou Tidiane Gaye, Director General of Public Accounting and the Treasury, defended the use of Total Return Swaps (TRS) to cover a 1,000 billion FCFA financing deficit. He testified that seven TRS operations were conducted, yielding 721 billion FCFA in net funding. Gaye stated these instruments, with an effective rate of approximately 7%, were used to avoid systemic banking risks and higher international market rates, which could have reached 15%.