By Lansana Gagny Sakho
The agreement at the services level of September 1, 2026: what it says, what it demands, and what the markets will observe
In the economic history of a country, there are days whose significance surpasses that of all the speeches that accompany them. The 1st of September 2026 is one of those days. On that day, the IMF announced that it had reached an agreement with the Senegalese authorities on a services level agreement for an ECF program of $2.2 billion over 36 months, for the period 2026-2029.
The speed with which this signal was sent deserves to be emphasized. It is a deliberate political message addressed simultaneously to the financial markets, international investors, and multilateral partners: the new government has chosen, from its first day, to place economic discipline at the heart of its actions. It did not wait to act. It acted to establish itself.
This rapidity says something essential about the method of the new Prime Minister. Where others would have taken the time to organize their cabinet, to consolidate their internal authority before tackling difficult issues, Ahmadou Al Aminou Lo chose to start with the most structuring. The signing of the IMF agreement is governance through actions, not through announcements. And this is precisely the type of signal that the markets have been waiting for for two years.
The 1st of September 2026 represents a break from financial isolation
Since the suspension of the IMF program in 2024, Senegal had been living in what international finance practitioners call financial isolation, a situation where the absence of a credible multilateral anchor mechanically increases the cost of every loan, every financing, every partnership. This isolation had a specific and documented cost: borrowing on the UEMOA regional market at rates around 9%, compared to 1 to 2% for concessional financing. Out of the $5 billion raised in 2025 on this market, the additional cost amounted to hundreds of billions of CFA francs paid by the Senegalese taxpayer.
The agreement of September 1, 2026, theoretically puts an end to this isolation. It tells the markets what they have been waiting to hear for two years: Senegal has accepted an external budget discipline, documented and verifiable. The IMF is not just a funder. It is, for the international financial markets, a certifier of trajectory. Its agreement tells investors, rating agencies, and other multilateral creditors: Senegal’s economic policy is now subject to independent monitoring. This information alone is worth more than the disbursement amounts.
The four concrete effects of this agreement
Beyond the political and symbolic signal, the agreement of September 1, 2026 has specific and measurable economic effects that will unfold in the weeks and months following its approval by the IMF Board of Directors.
The first concerns the cost of financing. With public debt expected to exceed 26,000 billion CFA francs by the end of 2026 and debt service already absorbing nearly 27% of public revenues, any improvement in country risk perception can generate substantial savings. For example, a one percentage point gain on $1 billion of borrowing represents approximately $10 million in interest saved each year, or nearly 6 billion CFA francs. These resources can then be redirected towards public investments and essential services.
The second expected effect is the unlocking of multilateral financing. Institutions such as the World Bank, the African Development Bank, or the French Development Agency generally consider an IMF program as a guarantee of macroeconomic credibility. The IMF itself indicates that this agreement is intended to catalyze additional funding from technical and financial partners, multiplying its leverage effect well beyond its initial amount.
Third consequence: the gradual stabilization of sovereign risk. The downgrade of Senegal’s rating to Caa2 was linked in particular to the absence of a program with the IMF and questions about the country’s budget trajectory. The agreement constitutes the first credible signal capable of halting the downgrade and preparing for a positive revision after several favorable evaluations.
Finally, this agreement can contribute to the gradual return of investor confidence. This confidence is essential at a time when foreign direct investments fell to around $37 million in 2025, a particularly low level for an economy with ambitions for industrial transformation. An IMF program does not guarantee an immediate return of capital, but it greatly reduces uncertainty, which is currently one of the main obstacles to investment.
Ultimately, the economic value of this agreement far exceeds the amounts mobilized. Its main contribution lies in its ability to reduce the risk premium, improve access to financing, gradually restore investor confidence, and recreate the conditions for growth funded at a more sustainable cost.
“An agreement at the services level is not yet an approved program. It is a promise of mutually accepted discipline. The value of this promise will be measured in its execution.”
The Gordian knot of the agreement with the IMF: the institutional question
The agreement with the IMF raises a fundamental institutional question: how does an agreement that requires precise budget discipline articulate with the institutional cohabitation situation between an executive and a legislative branch whose relations have been explicitly mentioned by Moody’s as a risk factor?
The honest answer is that this agreement simultaneously creates an opportunity and a constraint. An opportunity because the external budget discipline imposed by the IMF can help transcend internal political disputes: when commitments are made with a credible international institution, challenging them becomes more politically costly. A major constraint because budget laws, borrowing authorizations, and tax reform texts will continue to pass through a National Assembly whose president, who is at the root of the current difficulties, has no priority other than his own political interests.
This is precisely why internal institutional coherence between the two heads of the executive, between the executive and the legislative, remains a condition for the success of this program. An IMF agreement that the parliament does not allow to be executed is an IMF agreement that collapses at the first review. And a program suspended halfway through would be more damaging than a lack of program.
What the markets will observe in the coming months
For investors, rating agencies, and multilateral partners who closely follow Senegal, the agreement of September 1, 2026 opens a period of observation with a simple stake: will the authorities turn this signal into results?
1. Adoption of the 2027 budget law on time in line with the program’s budget objectives. A budget law adopted without legislative blockage would be a strong signal of institutional coherence.
2. The first review of the program scheduled six months after approval. This is the first examination of the actual execution of commitments. A satisfactory first review would trigger the first disbursement and send a positive signal to the markets.
3. The evolution of Moody’s rating, a stabilization of the outlook (from negative to stable) would be the first sign that agencies have taken note of the change in trajectory. It would come as early as after a satisfactory first review.
4. The return of FDI above $500 million in 2026-2027, a symbolic threshold that would mark the end of the collapse and the beginning of the reconstruction of attractiveness. This threshold will not be reached by the IMF agreement alone, but it is a necessary condition.
The challenge of the parastatal sector as a condition for success
On September 1, 2026, Senegal took the first concrete step towards necessary recovery. The speed of action of the new Prime Minister, the quality of the signal sent to the markets, the coherence between the DPG and the IMF agreement: these elements deserve frank recognition. The right course is set. It remains to be maintained.
Maintaining this course requires a condition that speeches do not exhaust: competence. The IMF program imposes specific budget objectives, documented structural reforms, measurable results at each semi-annual review. These requirements can only be met if the institutions responsible for their implementation are led by men and women whose technical competence matches the announced ambition.
This is particularly true for the parastatal sector, these 180 entities whose Forvis Mazars report revealed that they carried a consolidated debt exceeding 128.6% of GDP. PETROSEN, SENELEC, SONACOS, AIBD, the new DGFD, the strategic national companies: it is these entities that will implement or not the reforms promised to the IMF. It is their boards of directors and general management that will guarantee or compromise the credibility of the program.
What the success of the IMF program requires from the parastatal sector
Competent administrators capable of reading a financial statement, questioning a variance, challenging a CEO on results. Parastatal governance is not a space for political reward. It is the first level of control over public spending.
Leaders selected based on competence, as shown by the signal from ARTP with its open call for applications. This method must become the rule, not the exception, for all strategic entities in the parastatal sector.
Applied and evaluated performance contracts, law 2022-08 and its decrees impose them. Their effective implementation, with real managerial consequences in case of non-achievement of objectives, is the essential condition for a performing parastatal sector.
The agreement of September 1, 2026 opens a window. The competence of the men and women who will lead Senegal’s key institutions will determine whether this window leads to lasting transformation or a missed opportunity. Good governance is not an afterthought, it is the infrastructure of everything else.
Sources
• IMF: Press Release: Senegal services level agreement, ECF 36 months, $2.2 billion USD, September 1, 2026
• IMF: Mission Mrs. Mercedes Vera Martin, Dakar, August 19 – September 1, 2026
• Moody’s Ratings Decision on Senegal downgrade to Caa2, August 28, 2026
• UNCTAD World Investment Report 2026 (FDI inflows Senegal: $37M, -98.9%)
Lansana Gagny SAKHO Adm.A, C.M.C
President of the Circle of Public Administrators | PCA APIX-SA
Secretary General of CAVIE
Expert in public governance & Economic Intelligence
