To reclaim its sovereignty, Senegal must approach debt differently

Senegal reached a $2.2bn agreement with the International Monetary Fund this month after an earlier IMF deal was halted when authorities disclosed in July 2024 that previously hidden borrowing amounted to roughly a quarter of the country’s GDP. That discovery raised public debt to more than 130% of GDP and intensified public debate about how borrowing was managed and who bears responsibility for the omissions.

Critics argue that decades of IMF and World Bank structural adjustment have produced stagnation, weakened public institutions and failed to deliver the promised structural transformation. The article notes that Senegal underwent debt relief under the HIPC initiative in 2004, which cancelled $488m of debt but required structural conditions including privatisation and deregulation that critics say hurt access to services, employment and small businesses. Recalculations put Senegal’s real public debt at the end of 2023 at 99% of GDP, versus 74% originally reported, a divergence the IMF attributed to shortcomings by the government.

The piece situates Senegal’s experience in a wider African context, citing Zambia’s long history of IMF programmes beginning in the 1980s and Ethiopia’s multi-year delay under the G20 Common Framework — Ethiopia requested treatment in February 2021 and only reached terms with creditors in March 2025 after defaulting, during which time IMF-backed austerity measures were associated with rising poverty and inequality. These examples are used to argue that standard IMF conditionality can be economically painful and politically destabilising.

As an alternative to automatic recourse to new conditionality, the author proposes a different sequence of policy steps: prioritise debt treatment and an independent citizens’ audit of loans contracted between 2019 and 2024 to test legality, legitimacy and public benefit; suspend service on disputed debts during the audit; protect fiscal space for productive investment and social protection rather than broad-based tax hikes and spending cuts; target taxation on extractive industries and wealthy individuals; cap and publish terms of derivative instruments such as Total Return Swaps; seek binding timetables and less asymmetric arbitration under the G20 Common Framework; include reversibility clauses for any new conditionality; and implement four safeguards for hydrocarbon revenue including a transparent stabilisation fund, a dedicated investment envelope for social and productive sectors, an active liability-management strategy prioritising costly external debts, and related measures to channel resource income to development objectives.