{"id":486464,"date":"2025-11-10T16:00:29","date_gmt":"2025-11-10T16:00:29","guid":{"rendered":"https:\/\/www.financialafrik.com\/en\/2025\/11\/10\/restructuring-debt-or-suffocating-senegals-budget-dilemma\/"},"modified":"2025-11-10T16:00:36","modified_gmt":"2025-11-10T16:00:36","slug":"restructuring-debt-or-suffocating-senegals-budget-dilemma","status":"publish","type":"post","link":"https:\/\/www.financialafrik.com\/en\/2025\/11\/10\/restructuring-debt-or-suffocating-senegals-budget-dilemma\/","title":{"rendered":"Restructuring Debt or Suffocating: Senegal’s Budget Dilemma"},"content":{"rendered":"
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By Pr Amath NDIAYE – Economist, FASEG-UCAD<\/em><\/p>\n\n\n\n

As Senegal’s public finances face increasing pressures, the question of an orderly debt restructuring becomes unavoidable. With an estimated debt-to-GDP ratio ranging between 118% and 132%, and a gross financing need of 5,715.5 billion CFA francs in 2025, the country is at a decisive turning point: continue borrowing at prohibitive conditions or restructure its debt to restore confidence.<\/p>\n\n\n\n

A vicious cycle of refinancing<\/strong><\/p>\n\n\n\n

Senegal is stuck in a logic of permanent refinancing. Each new loan taken out to meet previous obligations increases the debt stock due to the additional interests it generates. Debt servicing then becomes a recurring burden that deprives the State of budgetary margins for investment.<\/p>\n\n\n\n

In 2025, interests represent nearly 16% of tax revenues, which means one out of every six francs collected by the Treasury. This situation is even more concerning as the nominal GDP growth, expected at 7% in 2026, remains lower than the average cost of debt (between 7% and 8% on the regional market), indicating that debt is growing faster than the wealth produced.<\/p>\n\n\n\n

Saturated markets and prohibitive rates<\/strong><\/p>\n\n\n\n

The UMOA-Titres market, the main internal source of financing, is now showing its limits. Senegalese banks, already heavily exposed, are reaching their regulatory thresholds. At the same time, international markets are applying rates higher than 10%, an unsustainable level for an emerging country.<\/p>\n\n\n\n

Out of the 5,715 billion CFA francs in financing needs projected for 2025, less than 3,000 billion CFA francs have been raised so far, in November. The financing deficit is widening, raising the risk of partial default or payment delays if strong decisions are not made by the end of the year.<\/p>\n\n\n\n

Why debt restructuring is necessary<\/strong><\/p>\n\n\n\n

A preventive and concerted restructuring would offer a more sustainable solution than the status quo. It would allow:<\/p>\n\n\n\n