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Investing.com -- S&P Global Ratings lowered Senegal’s long-term foreign currency sovereign credit rating to ’CCC+’ from ’B-’ on Friday, citing the country’s precarious debt position.
The rating agency placed Senegal on CreditWatch developing, signaling potential further downgrades if the government fails to refinance upcoming commercial debt maturities. S&P also lowered its short-term foreign currency rating to ’C’ while affirming its ’B-’ local currency sovereign credit rating.
Senegal faces elevated public-sector borrowing needs for 2026, with gross financing requirements reaching 26% of GDP according to government figures. S&P’s more conservative deficit forecast of 8.1% pushes this requirement even higher to about 29%.
The country’s debt burden stands at 119% of GDP as of December 2024, excluding budgetary arrears and an additional 9% from state-related entities, making it one of the most indebted sovereigns in the speculative-grade category.
Complicating matters, the suspension of the $1.8 billion IMF program in October 2024 has severely limited Senegal’s access to concessional financing. The program was halted after the revelation of widespread underreported public debt and fiscal mismanagement under the previous government.
Negotiations for a new IMF program began in October 2025, with authorities pledging to cut the deficit to 3% by 2027. The government has unveiled a "Jubbanti Koom" Economic Recovery Plan and introduced new tax measures on mobile money, online gaming, tobacco, and alcoholic beverages.
Despite these challenges, Senegal’s economy remains dynamic, driven by strong output from the Sangomar oil field and the recent launch of the Greater Tortue Ahmeyim gas project. GDP growth in the first quarter of 2025 reached 12.1%, with the government forecasting 6.8% growth for the full year.
S&P noted that Senegal has successfully executed 70% of its 2025 financing program, primarily by tapping the regional debt market. However, this strategy carries risks as regional bond issuance comes at a higher cost with yields exceeding 7% and typically shorter maturities than concessional loans.
The rating agency indicated it could upgrade Senegal if the country successfully refinances its upcoming maturities and implements resolute budgetary consolidation.
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