By El Hadji Abdoulaye Seck, Economist-researcher at the École nationale d’administration publique du Québec.
The following lines do not concern the entirety of Senegal’s public administration debt, but rather the illegal portion contracted in violation of the laws and regulations in force.
Since the publication of the Court of Auditors report in February 2025, revealing debt agreements concluded outside the framework set by Organic Law No. 2020-07 of February 26, 2020 on public finance laws and Decree No. 2020-978 of April 23, 2020 on the general regulation of public accounting, the country has been facing a series of turbulences: a decrease in its sovereign rating, a slowdown in discussions with the IMF for a new program, and persistent difficulties in raising funds on international markets since 2024.
According to the State Financial Operations Table (TOFE) published in June 2025, the debt of the public administration regularized for the moment as illegal consists of domestic bank debt and external debt, which amount to 2,242.61 billion CFA francs and 249.5 billion CFA francs respectively.
Beyond its technical dimension, this situation raises a question of economic and financial sovereignty: should Senegal submit to the demands of the neoliberal financial system, or rethink the rules of the game?
The urgency is not to give in to the logic of repayment at all costs, but to engage in a sovereign dialogue with the relevant creditors—mainly local banks—to find a concerted and sustainable solution.
Political Responsibility and Sovereign Choices
Senegal must now mobilize its intelligentsia and rely on popular mobilization to break away from the financial conformism of neoliberals.
Breaking away from this conformism does not mean alienating the international financial system; it means taking control of the country’s strategic choices, assuming a sovereign posture, and inscribing debt within a framework of legality, transparency, and equity.
It is time to make a real paradigm shift in the way financial policies are conceived.
The battle against illegal debt must also be fought in the National Assembly. Indeed, the 2026 initial budget bill (PLFI) provides for a repayment of 516 billion CFA francs for illegal domestic bank debt, based on a report from the Forvis Mazars firm—a report that, it should be noted, has not yet been made public.
Therefore, members of parliament have a duty to remove these amounts from the budget, until Senegal’s sovereign stance on illegal debt is stabilized in front of the people.
These resources could be reallocated to priority sectors to alleviate the suffering of vulnerable groups, the first victims of this illegal debt.
Deepening the Debt Question Through a Democratic Process
To resolve the issue of illegal debt, it is essential to first deepen the understanding of the subject by adopting an open and participatory approach, benefiting from real popular support.
It is necessary to establish a citizens’ debt audit committee, bringing together government services, citizen organizations, trade unions, parliamentarians, and specialists.
This committee would be tasked with transparently studying the origin, legitimacy, and impact of the debt, in order to draw clear and reasoned recommendations.
Its conclusions will enable the government to target debt agreements to be reviewed and to prepare, in a sovereign and concerted manner, the next stage of dialogue with creditors, in line with national interests.
Preventive Renegotiation to Quickly Return to the International Financial Market
Some fear that such an approach may compromise Senegal’s return to the international financial market. However, since 2024, the country has already lost access, and the prospects are not improving, given the caution of rating agencies and the procrastination of the IMF.
In this context, a preventive renegotiation, conducted in a transparent and concerted framework, could instead restore Senegal’s credibility.
The 2022 World Bank report on sovereign debt management indicates that preventive restructurings are concluded more quickly, involve shorter periods of market exclusion, and cause fewer economic losses.
Therefore, it is imperative for Senegal to opt for a proactive approach, in order to free up budgetary leeway and emerge successfully from this situation.
Haircut as a Lever
Senegal could propose a haircut, with a defined discount, on the value of illegal debt, accompanied by an exchange of securities incorporating collective action clauses (CAC).
The feasibility of such a solution may be contested by some specialists, who believe that renegotiating debt held by private creditors, as is the case for Senegal’s illegal debt, is almost impossible.
However, the example of Ecuador shows that such success is possible.
In 2008, Ecuadorian President Rafael Correa relied on the conclusions of the citizens’ debt audit committee, set up after the plea of citizen movements against illegal and illegitimate debt, to renegotiate the Eurobonds 2012 and 2030.
At the end of the discussions, Ecuador obtained the agreement of 90% of private creditors for a buyback at 35% of the nominal value—equivalent to a 65% haircut.
The saved amounts, estimated at 7 billion USD, were used to invest heavily in education and health.
This example ended without international legal proceedings, unlike the Greek case.
In 2012, as part of its Private Sector Involvement (PSI), Greece imposed a haircut of over 50% with the participation of 97% of private creditors.
Some German creditors brought the case to the Court of Justice of the European Union (CJEU), invoking Article 26 of the Vienna Convention (principle pacta sunt servanda).
In its judgment T-107/17 of May 23, 2019, the CJEU dismissed the plaintiffs, recalling that this principle applies only to agreements between states (Article 1 of the Vienna Convention).
The Court even invoked the clausula rebus sic stantibus principle, according to which a party may not perform a contract if the circumstances under which it was signed change significantly.
These precedents prove that a state can succeed in renegotiating debts held by private creditors without risking international legal sanctions.
In summary, now is not the time for repayment, but for discussion with stakeholders.
Since the advent of the new regime, the government has rightly renegotiated certain strategic contracts with partners.
Therefore, we must not do less on the issue of illegal debt, which represents a set of debt agreements.
Refusing to pay illegal debt is not an act of disobedience, but an act of justice and responsibility.
In other words, a state that pays illegal debt abdicates its sovereignty, whereas a state that questions it affirms its future.
Renegotiating is not fleeing, it is taking control of one’s financial destiny.
