Amanze Chinonye
Senegal has reached a staff-level agreement with the International Monetary Fund for a proposed $2.2 billion lending programme, nearly two years after a debt misreporting scandal forced the suspension of an earlier deal.
The agreement follows an IMF mission led by Mercedes Vera Martin, which held discussions with Senegalese authorities in Dakar from Aug. 19 to Sept. 1.
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The proposed Extended Credit Facility arrangement, worth 1.54 billion Special Drawing Rights, or 475% of Senegal’s IMF quota, would support the government’s economic and financial reform programme for 2026 – 2029.
The agreement is not yet final. It requires approval by IMF management and the Fund’s Executive Board, as well as decisive corrective action by Senegal to support its request for a waiver related to the debt misreporting case. The country must also secure financing assurances from its development partners, the IMF said.
The programme is expected to help unlock additional financing from the World Bank, African Development Bank and other development partners.
Senegal’s previous $1.8 billion IMF programme was suspended after authorities uncovered major discrepancies in the reporting of public debt, prompting a reassessment of the country’s fiscal position.
The new programme is aimed at restoring the sustainability of public finances while protecting vulnerable households. The government’s fiscal strategy will focus on boosting domestic revenue and streamlining expenditure, while strengthening social safety nets through targeted cash transfers.
Senegal plans to introduce a medium-term revenue strategy in 2027 to improve domestic revenue mobilisation and create room for priority spending, the IMF said.
The reform agenda also includes stronger public debt management, closer monitoring of domestic arrears and tighter oversight of state-owned enterprises. Measures to improve the business environment and financial inclusion are intended to support private-sector-led growth.
The authorities have also announced plans to seek debt treatment to restore debt sustainability.
Senegal’s economy grew 6.7% in 2025 as oil production entered its first full year, although non-hydrocarbon growth slowed to 2.2%. Inflation was 1.4%, within the target range.
Non-hydrocarbon economic growth rebounded to 4.7% year-on-year in the first quarter of 2026, supported by strong private consumption, the IMF said.
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The Fund said Senegal’s recent debt problems had exposed vulnerabilities in public financial management and stressed that further action was needed to resolve the misreporting issues and strengthen safeguards against a recurrence.
The IMF team met President Bassirou Diomaye Faye, Prime Minister Ahmadou Al Aminou Lo, Economy, Finance and Planning Minister Cheikh Diba, Budget Minister Bassirou Sarr and senior government and central bank officials during the mission.
It also held discussions with development partners, private-sector representatives, civil society groups and other stakeholders.
The staff-level agreement marks a step towards restoring IMF support, but Senegal must complete the required corrective measures and secure financing assurances before the proposed programme can be considered by the Executive Board.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
