Senegal’s dollar‑denominated bonds slumped to roughly 50 cents on the dollar after President Bassirou Diomaye Faye dismissed Prime Minister Ousmane Sonko, a vocal opponent of debt restructuring. The political showdown threatens to push the West African state toward sovereign default, while the new administration scrambles to secure an IMF programme.

The crisis is now rooted in domestic borrowing. After being cut off from international markets, Senegal raised close to CFAF 4 trillion (about $7 billion) last year through the WAEMU‑pegged market, issuing regular UMOA Titres auctions and retail savings bonds. Yet yields on three‑year issues have surged to just over 8 %, far above regional peers such as Côte d’Ivoire.

Yields raise margin calls on swaps that use Senegal’s bonds as collateral for €1 billion of external financing. Debt officials claim the risk is “almost nonexistent,” but bid rejections have spiked to 80‑90 % as investors avoid costly issues. With only half of the planned CFAF 120 billion slated for June issued, the government’s financing runway is narrowing sharply and could force a restructuring of external and domestic obligations.