The International Monetary Fund (IMF) has wrapped up its latest mission to Senegal without finalizing a new lending programme, though officials say progress has been made and a deal could be reached in the coming weeks.

IMF Mission Chief Edward Gemayel told journalists in Dakar that discussions with Senegal’s economic team remain ongoing, describing the country’s efforts to restore fiscal credibility as “serious and determined.”

“We still need some more discussions,” Gemayel said. “Hopefully, in the coming weeks we can reach a conclusion.”

The IMF visit marks a critical stage in Senegal’s bid to secure fresh financial support following the discovery of billions of dollars in unreported public debt accumulated under the previous administration — a revelation that triggered the suspension of the country’s $1.8 billion lending programme last year.

Debt Misreporting and a Path to Fiscal Repair

The undisclosed liabilities, which have now swelled to more than $11 billion, pushed Senegal’s total public sector debt to 132 percent of GDP by the end of 2024, according to IMF estimates. The figure includes around 4 percent of GDP in domestic expenditure arrears, raising alarm over the government’s debt sustainability.

Senegal’s new administration has been working closely with the IMF to clean up its fiscal accounts and re-establish trust with creditors and investors. The government is now seeking a new IMF-supported programme, while simultaneously requesting a waiver for debt misreporting, which must be approved by the Fund’s Executive Board.

Gemayel noted that the waiver process and the new lending arrangement are being developed “in parallel,” but hinted that they may not be submitted for board approval at the same time.

Fiscal Ambitions and Risks

The government’s medium-term fiscal strategy targets a deficit reduction to 5.4 percent of GDP by 2026, from 7.8 percent this year and a staggering 13.4 percent recorded in 2024.

“While the ambition is laudable,” Gemayel said in a statement, “the very high tax yield assumed from the announced measures poses a significant risk, underscoring the need for more conservative projections.”

The IMF team arrived in Dakar on October 22 to begin technical discussions on the new programme. Talks have centred on restoring macroeconomic stability while ensuring sufficient fiscal space for growth and social investment.

Restructuring or Re-Profiling?

One key issue still under review is Senegal’s debt sustainability analysis (DSA) — a critical step that will determine whether the country must undertake a debt restructuring or simply re-profile its obligations.

“Regarding debt, Senegal intends to continue implementing conventional active debt management operations, both on domestic and external debt, in order to reduce debt-related vulnerabilities,” the Finance Ministry said in a statement released Monday.

Investors remain divided on the likely outcome. A full restructuring could mean losses for creditors, while a re-profiling would focus on extending maturities without reducing principal or interest payments.

Confidence Amid Uncertainty

Despite the fiscal challenges, IMF officials praised Senegal’s reform drive, noting that the government had demonstrated strong commitment to fiscal discipline and transparency.

“They are very serious about putting in place the consolidation path, which is very aggressive in our view,” Gemayel said. “That shows you how much they are determined to bring debt on a downward trajectory.”

The outcome of the ongoing talks will be closely watched by regional and global investors, as Senegal — one of West Africa’s most stable economies — navigates the delicate balance between restoring debt sustainability and sustaining growth.

If approved, the new IMF programme would mark a critical reset for the country’s economic policy framework, reinforcing accountability and fiscal resilience at a time when rising global interest rates and domestic spending pressures continue to test emerging market economies across Africa.