IMF says Senegalese government retains sovereign right to manage its debt
The International Monetary Fund said on Tuesday that Senegal retained its sovereign right to decide how to deal with its debt.
The International Monetary Fund said on Tuesday that Senegal retained its sovereign right to decide how to deal with its debt.
It made the comments after discussing various options with Dakar on how to address the country’s “significant debt vulnerabilities”.
The IMF said the policy talks last week were part of the organisation’s role to offer expert analysis and advice for government consideration
Prime Minister Ousmane Sonko said over the weekend that Fund officials were pushing for a restructuring of the country’s debt.
Sonko added that the government had ruled this out as a way to address the current strain on the state’s finances.
The International Monetary Fund said on Tuesday that Senegal retained its sovereign right to decide how to deal with its debt.
Senegal has been facing difficulties since last year, after the then new government disclosed hidden debts that are now estimated at more than $11 billion.
This led to the IMF freezing a $1.8 billion financial support package for the West African economy.
Sonko’s comments sparked a selloff of Senegalese bonds on Monday. The yield on the nation’s 2048 dollar debt rose further on Tuesday as rates on shorter-dated maturities eased.
Securing an IMF financing programme requires a government setting out a clear path to put its finances, including its debt burden, on a sustainable footing.
The prime minister unveiled a new economic recovery plan for Senegal in August, pledging to finance 90 per cent of the initiative through domestic resources and avoid additional debt.
Analysts say rejecting the debt restructuring option limits Dakar's choices as it seeks to plug a gaping budget deficit and manage debt that is now estimated at 132 per cent of GDP.
Based on reporting by Africanews.
