DAKAR, Senegal — The International Monetary Fund (IMF) said Tuesday that Senegal retains its sovereign right to decide how to manage its debt, following policy discussions with officials in Dakar over the country’s growing financial vulnerabilities.
The IMF noted that last week’s talks were part of its role in providing expert analysis and advice for governments to consider.
Government Position
Prime Minister Ousmane Sonko stated over the weekend that IMF officials had pressed for a restructuring of Senegal’s debt, but the government ruled out that option. Sonko said the administration is determined to address financial strains without pursuing restructuring.
Senegal’s debt challenges intensified last year after the new government disclosed hidden liabilities now estimated at more than $11 billion. The revelation prompted the IMF to freeze a $1.8 billion support package for the West African economy.
Market Reaction
Sonko’s comments triggered a selloff of Senegalese bonds on Monday. The yield on the country’s 2048 dollar debt rose further on Tuesday, while rates on shorter-dated maturities eased.
Economic Recovery Plan
In August, the prime minister unveiled a new recovery plan, pledging to finance 90 percent of the initiative through domestic resources and avoid additional borrowing.
Analysts’ Concerns
Analysts warn that rejecting debt restructuring limits Dakar’s options as it faces a widening budget deficit and debt levels now estimated at 132 percent of GDP. Securing an IMF financing programme will require Senegal to outline a credible path toward sustainable debt management.