Senegal Makes $471 Million Debt Payment But Faces Tough Times Ahead

FILE - Senegal's top opposition leader Ousmane Sonko, right, and his key ally Bassirou Diomaye Faye address supporters in Dakar, Senegal, Friday March 15, 2024.

By Dominic Wabwireh with other agencies

Senegal successfully paid nearly half a billion dollars in debt obligations on Friday, avoiding default, but spending cuts, delayed payments to other lenders, and growing civil unrest cast doubt on how much time the effort buys the West African nation.

The Central Bank of West African States transferred 380 million euros to eurobond holders and $33 million for dollar-denominated bonds, covering principal and coupons.

President Bassirou Diomaye Faye's government mobilized local resources via regional markets after the IMF suspended its program following the discovery of $13 billion in undeclared debt—the largest ever hidden debt in a country with an IMF program, according to investors.

Growing pains

But the payment comes with sacrifices. A university student died during protests over aid last month, teachers have struck, and unions say construction alone lost tens of thousands of jobs.

Senegal is also falling behind on payments to France, Britain, Italy and Spain, sources told Reuters—delays longer than before and more worrying.

Long road to recovery

Senegal plans to raise 4.1 trillion CFA francs on regional markets in 2026, but analysts warn it needs billions in affordable long-term financing.

With debt at 132% of GDP and $9.7 billion in interest and amortization due this year, "difficult choices" lie ahead.

Prime Minister Ousmane Sonko has rejected IMF restructuring proposals as a "disgrace," leaving the government to navigate a narrow path between solvency and social stability.