Senegal faces scrutiny from the International Monetary Fund over its liquidity requirements, the country’s finance minister said on Friday.
The West African nation is negotiating a new lending program with the IMF as it deals with the fallout from billions in debts that were not disclosed by the previous administration, according to Reuters.
Finance Minister Cheikh Diba told parliament that Senegal required a “very large amount” of financing, averaging 6,000 billion CFA francs ($10.60 billion) annually. “And the IMF believes we cannot guarantee this over the debt sustainability horizon,” Diba said. “We, however, believe it is possible.”
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The IMF did not immediately respond to an emailed request for comment. Diba added that the government was also reviewing “all problematic sources and propose refinancing instead.” He explained, “When we replace this debt with more acceptable terms and longer maturities, we create fiscal space.
“Through “active debt management,” the government expected to free up over 500 billion CFA francs in budgetary space for 2025, he said.
Following the comments, Senegal’s government bonds fell, with near-term maturities losing roughly 2 cents. The euro-denominated bonds were bid at 73.15 cents, while the dollar-denominated 2031 note was bid at 64.88 cents.
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Image Credit: Reuters
