Senegal Faces Fresh Debt Scrutiny Without IMF Deal, S&P Warns

S&P Global Ratings warned that Senegal's public finances are under pressure and that the failure to secure fresh support from the International Monetary Fund (IMF) will heighten concerns about the country's economic outlook. The ratings agency highlighted that Senegal's debt servicing costs have risen significantly, reaching an estimated 30% of government revenue in 2023, up from 18% in 2021. This increase is attributed to higher global interest rates and a depreciation of the West African CFA franc. S&P noted that a lack of an IMF program could limit Senegal's access to other multilateral and bilateral financing, potentially increasing its reliance on more expensive commercial debt. The agency also pointed to ongoing political uncertainty following the postponement of the February 2024 presidential election as a factor contributing to investor caution. S&P affirmed Senegal's 'B-/B' long-term and short-term foreign currency ratings, but revised the outlook to negative from stable, signaling a potential downgrade if fiscal pressures are not addressed. The country's economic growth is projected to slow to 4.8% in 2024 from 5.2% in 2023, according to the IMF's latest estimates.