With public debt levels in Senegal reaching alarming heights, economists in Dakar have called for urgent measures to diversify the country’s borrowing sources and reduce reliance on traditional multilateral institutions.
why the current debt strategy needs urgent review
The gathering of financial experts held in Dakar emphasized that the nation’s debt-to-GDP ratio has surged to 132%, driven in part by undisclosed financial commitments allegedly made between 2019 and 2024. While government officials have pointed to these irregularities, former President Macky Sall has refuted the claims. Regardless of origin, the debt burden now threatens key sectors including education, health and infrastructure development.
key recommendations from the economic forum
During the conference titled ‘’Addressing Senegal’s Debt Crisis,’’ several actionable proposals emerged:
- Expand bilateral partnerships: Experts suggest following Turkey’s example by engaging non-traditional creditors such as Saudi Arabia or China, which offer more flexible terms and greater respect for national sovereignty.
- Conduct a full public debt audit: A comprehensive review is essential to assess the true scale of obligations and identify areas for restructuring or relief.
- Strengthen negotiation leverage: Before engaging with the IMF, Senegal should prepare robust counter-proposals that protect social spending and prioritize domestic economic priorities.
- Explore alternative financial structures: Establishing an independent central bank could provide greater monetary sovereignty and reduce vulnerability to external financial pressures.
Demba Moussa Dembélé, Founder of the African Research and Cooperation for Endogenous Development, stressed the need to move away from what he termed a ‘’neo-colonial lending system,’’ advocating closer cooperation with countries like China that avoid imposing rigid structural adjustment conditions.
Ali Zafar, an economic advisor at the United Nations Development Programme, highlighted the limitations of relying solely on the IMF. He pointed out that ‘’there are other sources of financing beyond Washington’s multilateral lenders,’’ encouraging bilateral negotiations that align with Senegal’s long-term development goals.
He also warned against diverting critical revenue to debt service or using international loans to repay existing creditors, calling for a more strategic and transparent approach to fiscal management.
next steps and ongoing negotiations
Senegalese officials, including Alioune Diouf, Director of National Debt at the Ministry of Finance and Budget, recently met with IMF leadership in Washington to discuss debt sustainability and reform measures. While talks continue, the government faces mounting pressure to implement reforms that balance fiscal responsibility with social equity.
The call for diversification reflects a broader shift among African nations seeking greater financial autonomy and resilience. By broadening its creditor base and adopting more transparent fiscal practices, Senegal could mitigate debt risks and foster sustainable growth without compromising essential public services.
