The IMF has agreed a $2.2bn bailout plan for Senegal, enabling the west African nation to pursue external debt restructuring after hidden borrowing left it among the world's most indebted countries. Senegal's finance ministry launched a "debt treatment plan" as the IMF resumed lending following revelations of billions in misreported debt last year. Euro-denominated bonds due in 2028 plunged to 49 cents on the euro, while US dollar bonds fell to 49 cents on the dollar. Debt exceeded 130% of GDP in 2024 after a state audit exposed extensive loan misreporting.

Despite spending cuts, tax increases, and GDP rebasing, debts remain around 100% of GDP, with interest consuming nearly a quarter of government revenue, according to Moody's. Tensions between President Bassirou Diomaye Faye and former prime minister Ousmane Sonko delayed the IMF deal before Sonko's dismissal this year. The IMF stressed that decisive action is critical to resolve misreporting and strengthen safeguards.

Senegal seeks debt treatment under an enhanced Common Framework, a G20-backed process. The plan excludes CFA franc debts, which "remain outside the scope given the significant role of the regional market." Moody's recently cut Senegal's credit rating deeper into junk, warning that the prolonged absence of an IMF program increased reliance on costly regional market funding. Parliament authorized an investigation into total return swap borrowing revealed by the Financial Times.