The International Monetary Fund is reviewing the viability of Senegal’s financing strategy and analyzing its debt sustainability as it works to finalize an agreement on reforms to underpin a new support program, an IMF official said on Thursday.
A team of IMF officials recently completed a mission to Dakar but did not announce a new support package, following the suspension of the previous one after debt misreporting was uncovered.
Political infighting and disagreements with the IMF over potential debt restructuring have weighed on Senegal’s bonds, some of which hit record-low prices this week, according to Reuters.
On Friday, the 2031 dollar-denominated bond fell more than 3 cents to 64.125 cents on the dollar, heading for a record-low close, according to LSEG data, after ending last year around 90 cents.
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IMF spokesperson Julie Kozack said at a press briefing that assessing the viability of Senegal’s financing strategy “partly depends on coming up with measures that would help reduce vulnerabilities around debt,” including centralizing debt management operations, improving transparency, and strengthening overall fiscal controls.
She added that addressing the debt misreporting would rely on measures taken by Senegalese authorities and that the IMF would not request any early repayment of obligations.
“The IMF and the World Bank are also working jointly toward finalizing an updated debt sustainability analysis that would reflect the revised debt data and the macroeconomic assumptions,” Kozack said.
However, she emphasized that decisions on how Senegal should tackle its heavy debt burden are ultimately up to the government.
The country’s international bond prices fell this week after Prime Minister Ousmane Sonko said over the weekend that IMF officials were advocating for a restructuring of Senegal’s debt, a step he said the government would not accept.
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Image Credit: Reuters
