Senegal and the International Monetary Fund staff have reached a preliminary agreement on a 36-month Extended Credit Facility arrangement worth about US$2.2 billion, a potential lifeline for the West African economy as government works to restore fiscal stability and address debt vulnerabilities.
The agreement, reached after IMF discussions in Dakar from Aug. 19 to Sept. 1, is not yet final. It still requires approval from IMF management and the institution’s Executive Board, as well as financing assurances from Senegal’s development partners.
The authorities must also take “decisive corrective actions” to support their request for a waiver in a misreporting case before the Board can consider the program. The proposed package would support Senegal’s economic, financial reform program for 2026–2029.
According to IMF mission chief Mercedes Vera Martin, the program is designed to restore macroeconomic stability and debt sustainability, reduce fiscal and external risks, expand social spending and promote sustainable, private-sector-led growth.
The proposed arrangement would be a 36-month Extended Credit Facility worth approximately US$2.2 billion. This amount is equivalent to SDR 1,537.1 million, or 475 percent of Senegal’s IMF quota. The program would support Senegal’s economic and financial reforms from **2026 to 2029.
The agreement remains subject to approval by IMF management and the IMF Executive Board. Before the Board can consider the arrangement, Senegal must take corrective action in connection with the misreporting case and obtain the necessary financing assurances from its development partners.
If approved, the IMF-supported program is expected to help Senegal secure additional financing from the World Bank, the African Development Bank and other development partners.
Senegal’s economy grew by 6.7% in 2025, according to the IMF, helped by oil production entering its first full year.
Growth excluding hydrocarbons, however, slowed to 2.2%, highlighting the government’s challenge in ensuring that the benefits of new oil activity translate into broader economic expansion. Inflation remained contained at 1.4%.
Non-hydrocarbon growth rebounded in the first quarter of 2026, reaching 4.7% year-on-year, supported by strong private consumption.
The IMF said the resilience of the economy provides a foundation for the reform program, while warning that fiscal and external vulnerabilities must be addressed to protect long-term stability.
The fiscal strategy will focus on raising more domestic revenue and streamlining public expenditure. The authorities also plan to strengthen social safety nets, particularly through targeted cash transfers intended to shield vulnerable households from the effects of fiscal consolidation.
A central reform is the planned adoption of a medium-term revenue strategy in 2027. The strategy is expected to improve domestic revenue mobilization and create room for priority spending, including social programs and other development needs.
The proposed program also calls for improvements in public financial governance. These include better public debt management, closer monitoring of domestic arrears and stronger oversight of state-owned enterprises. The govt has additionally announced its intention to seek debt treatment aimed at restoring debt sustainability.
The IMF’s reference to a previous misreporting case adds a significant governance dimension to the negotiations.
The Fund said it welcomed Senegal’s continued engagement and commitment to addressing vulnerabilities exposed by the case, but emphasized that further decisive action would be needed to resolve the issues and strengthen safeguards against similar incidents in the future.
The IMF team met with President Bassirou Diomaye Diakhar Faye, Prime Minister Ahmadou Al Aminou Lo, senior finance officials, representatives of Senegal’s Court of Accounts and officials from the Central Bank of West African States.
Discussions also included development partners, private-sector representatives, civil society organizations and other stakeholders.
If approved, the IMF-backed arrangement could help unlock additional support from the World Bank, the African Development Bank and other development partners.
The financing would give Senegal greater room to implement reforms, but the conditions attached to the agreement suggest that approval will depend on credible corrective measures, stronger transparency and firm commitments to fiscal discipline.
For Senegal, the proposed deal represents both financial support and a test of the government’s ability to rebuild confidence in its public finances.
The authorities will need to balance debt reduction and fiscal consolidation with social protection, economic growth and efforts to ensure that the country’s emerging oil sector supports development beyond hydrocarbons.
