Explainer-Why is Senegal reworking its debt and what makes it different?

Senegal is reworking its debt in exchange for a $2.2 billion International Monetary Fund (IMF) bailout, two years after a hidden debt scandal pushed the country into crisis. The government discovered billions of dollars of undisclosed public debt in September 2024, which has since ballooned to over $11 billion according to the IMF, with some analysts estimating it to be closer to $13 billion.

This has led to a debt-to-GDP ratio of 130%, triggering a sharp selloff in Senegal's bonds and credit rating downgrades. The government has signaled that around half of its external debt, primarily held by multilateral lenders and development banks, will not be touched, impacting how it will rework the rest of its borrowings.

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