Overview

• Senegal's fiscal deficit and debt figures have been restated to fundamentally weaker levels, with deficits in 2019-2023 now double on average previous levels and the S&P Global Ratings-estimated debt burden at 106% of GDP for 2024, which is 32% of GDP higher than our previous estimate.
• The current administration has stated its intention to implement a significant fiscal adjustment and address the marked shortfalls in related institutional checks and balances.
• We expect that fiscal deficits will gradually adjust, but still average 6.5% of GDP in 2025-2028 and that debt will remain at about 100% of GDP, constraining fiscal flexibility.
• We have therefore lowered our long-term ratings on Senegal to 'B' from 'B+' and affirmed our 'B' short-term ratings.
• The negative outlook on the long-term rating reflects our opinion that Senegal's fiscal consolidation path could be subject to significant implementation risks, which could complicate expected financing plans.

Rating Action

On Feb. 28, 2025, S&P Global Ratings lowered its long-term foreign and local currency sovereign credit ratings on Senegal to 'B' from 'B+'. The outlook is stable. At the same time, the 'B' short-term sovereign credit rating was affirmed.

As a "sovereign rating" (as defined in EU CRA Regulation 1060/2009 "EU CRA Regulation"), the ratings on Senegal are subject to certain publication restrictions set out in Art 8a of the EU CRA Regulation, including publication in accordance with a pre-established calendar (see "Calendar Of 2025 EMEA Sovereign, Regional, And Local Government Rating Publication Dates," published Dec. 19, 2024, on RatingsDirect). Under the EU CRA Regulation, deviations from the announced calendar are allowed only in limited circumstances and must be accompanied by a detailed explanation of the reasons for the deviation. In this case, the reasons for the deviation are the announcement by the government that budget and debt data for the past four years are subject to revision, along with the publication of the audit report on public finances.

The next rating publication on the sovereign rating on Senegal is scheduled for May 16, 2025.

Outlook

The negative outlook reflects our opinion that Senegal's fiscal consolidation path could be subject to significant implementation risks, which could complicate expected financing plans.

Downside scenario

We could lower the rating if Senegal's financing pressures rise. This could happen because of slower fiscal consolidation than planned or more limited access to market funding. While not our base case, we could also lower the rating if we view any future potential debt-repurchase operations, domestic or external, to be akin to a distressed exchange, under our criteria.

Upside scenario

We could revise the outlook to stable if the economy grows faster than we forecast, enabling a more rapid decline in fiscal deficits and government funding needs.

Rationale

Senegal's restated fiscal and debt numbers point to fundamentally weaker credit factors than we previously assessed.   In the audit report published on Feb. 12, Senegal's Court of Auditors indicated that cumulative fiscal deficits over 2019-2024 were on average double what was previously reported in budgetary documents. Consequently, debt to GDP is also much higher and is now estimated by S&P Global Ratings at 106% of GDP at the end of 2024 versus the 77% previously anticipated in our December 2024 estimate. We understand the misstatements occurred primarily because of unreported investments that were funded via external project loans and domestic bank loans. The exact nature of the investments is still relatively hard to evaluate. This lending was reported outside of the Budget Law perimeter. In our opinion, the restated data indicates a significantly more constrained fiscal position than in our base case of December 2024.

The next 12 months will be key in assessing the country's debt sustainability and liquidity headroom, underpinning our negative outlook.   Although a significant amount of public debt was not reported in budgetary documents, authorities nevertheless indicate that they have been able to service that debt in full and on time. However, we still have little information on the main characteristics of this newly reported debt, including its maturity profile and amortization schedule.

Senegal is faced with a spike in debt repayments in 2025 and 2026 due to the amortization of the 2028 Eurobonds. According to the budget and thus before the audit was made public, Communaute Financiere Africaine franc (CFA) 2.923 trillion was due in 2025--$4.6 billion equivalent--and we expect at least similar amounts for 2026. This owes to the amortization of the 2028 Eurobonds. We believe this could create liquidity pressures if Senegal does not actively seek new funding sources, notably as the IMF program granting a US$1.8 billion program credit facility has been suspended when the audit period began, as the authorities have chosen not to go to through the second review. That said, authorities have indicated they will engage with the IMF to obtain a new program by June 2025 and that they have indicated to be working with the World Bank on a $300 million budget support with an expected disbursement in the same month. However, given that the government and the IMF must agree on a new economic and budgetary framework, we see a reasonable likelihood of that timeline slipping. Beyond that, the authorities have also publicly stated their intent to deepen domestic financing avenues. They have also pointed to a potential recourse to innovative financing instruments. Lastly, membership in the West African Economic and Monetary Union (WAEMU) can strengthen Senegal's liquidity, as several back-stop mechanisms can be implemented. While we expect authorities to prudently manage debt refinancing operations, we could view as distressed associated liability management exercises that extend debt maturities or reduce amounts due to investors.

In response to these developments, the government has stressed its intention to reduce future fiscal deficits to 3% by 2027, or about 8% of GDP below the 2024 outturn.   In its 2025 budget, adopted in December 2024 before the audit was released, Senegal had targeted a 4.52% reduction in its 2025 fiscal deficit against 2024 reported levels, to just 7% of GDP. In the budget, measures to meet this target include primarily revenue-enhancing reforms and, in particular, tax increases and a reduction in tax exemptions. Moreover, expenditure in absolute terms is not declining and only moderately declining in percentage of GDP terms. We also have little visibility on the recurring nature of the expenditure made outside budgetary procedures and thus can't estimate whether it can be easily narrowed. The authorities have however engaged in a review process of all investment expenditures to assess which ones could be reduced or cancelled. We also understand the government could revisit the 2025 budget expectations and present a corrective law in the next few weeks, which may provide further clarity on the consolidation path.

The Pastef (Patriotes of Senegal) party won parliamentary elections in a landslide in November 2024. In his general policy speech after the elections, Prime Minister Sonko indicated that he aimed to increase fiscal revenue to about 20% in the next few years, from 18% of revenue in 2024. Beyond this statement, however, we don't have clear visibility on the specific tax hikes targeted.

Although we believe the government is steering in the right direction, we think a fiscal adjustment of this size will be difficult to achieve in this time frame.   The audit points to weak budgetary management. Several issues were identified, notably ineffective monitoring of budget execution with discrepancies between budgeted and actual expenditure and inefficiencies in tax reporting mechanisms. In our view, such instances of malfunction in the budgetary process cannot be immediately rectified and will further weigh on the government's ability to timely execute on its deficit reduction objectives, even though it has stated its willingness to overhaul the budgetary process and implement a plan to address oversights in its institutional settings to prevent similar reporting inefficiencies from happening again.

Such consolidation carries an associated cost to growth and would likely be subject to significant implementation risks. Revenue, estimated at 23% of GDP in 2027, compares well with that of some regional peers, but is still relatively low versus about 30% global average in sovereigns we rate. Our revenue estimates for 2025 include 9% real GDP growth related to an anticipated increase in oil and gas production from the Sonomar and GTA fields. Further complicating this adjustment, with a debt burden of over 100% of GDP, we now estimate the government's interest burden will account for more than 20% of revenue in 2025, up from 14% in our December estimate. We expect the government's debt burden to decline only gradually, and we view the restated position as more vulnerable to shocks, including those which could come with an associated increase in financing pressure. Furthermore, although our revised assumptions include the main findings of the court's audit report, all budgetary documents on which we build our assumptions may take time to be updated, and thus our forecast may be subject to further changes and incorporate additional information, such as the updated cost of debt for previous years or the updated maturity schedule, once these new debt instruments are incorporated.

Key Statistics

Table 1

Senegal--Selected indicators
Mil. XOF	2019	2020	2021	2022	2023	2024	2025	2026	2027	2028
Economic indicators (%)
Nominal GDP (bil. LC)	13,713	14,119	15,261	17,228	18,620	20,370	22,848	24,685	26,362	28,153
Nominal GDP (bil. $)	23	25	28	28	31	34	38	43	46	49
GDP per capita (000s $)	1.5	1.5	1.6	1.6	1.7	1.8	2.0	2.2	2.4	2.5
Real GDP growth	4.6	1.3	6.5	3.8	4.6	5.5	9.0	5.2	4.7	4.7
Real GDP per capita growth	1.8	(1.3)	3.8	1.2	2.0	2.9	6.3	2.7	2.2	2.2
Real investment growth	10.3	7.2	15.8	11.0	(4.6)	3.0	4.0	4.0	3.0	3.0
Investment/GDP	32.0	35.6	38.4	45.6	45.2	43.1	40.3	39.2	38.1	37.0
Savings/GDP	23.9	24.8	26.3	25.5	26.9	28.8	32.1	32.2	32.2	32.7
Exports/GDP	25.0	20.7	24.6	26.9	22.9	24.8	27.6	27.9	28.3	28.6
Real exports growth	14.7	(13.2)	22.5	3.5	(7.9)	12.5	21.0	6.0	6.0	6.0
Unemployment rate	2.9	3.4	3.4	3.0	2.9	6.0	6.0	6.0	6.0	6.0
External indicators (%)
Current account balance/GDP	(8.1)	(10.9)	(12.1)	(20.1)	(18.3)	(14.2)	(8.2)	(7.0)	(5.9)	(4.4)
Current account balance/CARs	(20.9)	(30.5)	(31.2)	(50.0)	(47.2)	(33.2)	(18.6)	(16.2)	(13.9)	(10.3)
CARs/GDP	38.8	35.6	38.7	40.2	38.8	42.9	44.4	43.3	42.8	42.2
Trade balance/GDP	(12.3)	(11.4)	(10.9)	(17.5)	(17.0)	(13.8)	(9.1)	(7.5)	(6.3)	(5.1)
Net FDI/GDP	4.2	7.1	9.2	10.3	12.0	8.1	4.2	3.2	3.1	3.1
Net portfolio equity inflow/GDP	0.0	0.0	0.0	0.0	0.1	0.2	0.1	0.1	0.2	0.2
Gross external financing needs/CARs plus usable reserves	130.3	129.9	132.0	141.0	144.0	128.8	122.1	118.7	116.0	111.6
Narrow net external debt/CARs	120.4	155.7	128.4	141.3	145.9	149.7	133.4	126.1	120.5	117.9
Narrow net external debt/CAPs	99.6	119.3	97.9	94.2	99.1	112.4	112.6	108.5	105.9	106.9
Net external liabilities/CARs	140.7	189.3	165.1	194.9	227.3	221.0	203.9	198.9	194.7	193.5
Net external liabilities/CAPs	116.4	145.0	125.8	130.0	154.5	165.9	172.0	171.1	171.0	175.3
Short-term external debt by remaining maturity/CARs	45.0	43.5	39.5	45.1	44.2	40.0	36.0	37.0	38.3	36.9
Usable reserves/CAPs (months)	2.7	3.1	2.7	3.1	2.7	3.1	2.7	3.0	3.3	3.5
Usable reserves (mil. $)	2,969	3,124	4,246	3,917	4,967	4,497	5,376	6,143	6,651	7,193
Fiscal indicators (general government; %)
Balance/GDP	(9.9)	(9.2)	(11.5)	(12.7)	(12.3)	(11.2)	(8.5)	(7.5)	(6.5)	(5)
Change in net debt/GDP	12.3	12.7	12.4	14.0	18.3	16.0	4.7	6.9	7.0	5.5
Primary balance/GDP	(7.9)	(7.1)	(9.5)	(10.5)	(8.9)	(6.2)	(3.3)	(2.4)	(1.4)	0.2
Revenue/GDP	21.2	20.2	19.4	21.6	21.0	21.0	21.0	22.0	23.0	23.0
Expenditures/GDP	31.1	29.4	30.9	34.4	33.3	32.2	29.5	29.5	29.5	28.0
Interest/revenues	9.3	10.1	10.3	10.3	16.1	23.9	24.9	23.2	22.4	22.6
Debt/GDP	65.6	75.5	83.6	87.1	99.7	106.6	100.1	99.9	100.8	100.2
Debt/revenues	309.2	373.4	429.9	402.7	475.0	507.8	476.7	453.9	438.3	435.4
Net debt/GDP	60.7	71.6	78.6	83.6	95.7	103.5	96.9	96.6	97.5	96.8
Liquid assets/GDP	4.9	3.9	4.9	3.5	4.0	3.2	3.2	3.2	3.3	3.4
Monetary indicators (%)
CPI growth	1.8	2.5	2.2	9.7	5.9	2.5	2.5	2.0	2.0	2.0
GDP deflator growth	2.1	1.6	1.4	8.7	3.3	3.7	2.9	2.7	2.0	2.0
Exchange rate, year-end (LC/$)	583.90	534.56	579.16	615.00	593.63	631.40	583.80	570.68	570.68	570.68
Banks' claims on resident non-gov't sector growth	7.0	1.8	10.8	19.8	5.1	1.5	8.0	8.0	8.0	8.0
Banks' claims on resident non-gov't sector/GDP	32.2	31.8	32.7	34.6	33.7	31.2	30.1	30.1	30.4	30.7
Foreign currency share of claims by banks on residents	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Foreign currency share of residents' bank deposits	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Real effective exchange rate growth	(1.9)	2.8	0.1	0.5	3.2	N/A	N/A	N/A	N/A	N/A
Sources:Central Bank of West African States (BCEAO), National Statistics, World Bank and International Financial Statistics (Economic indicators); BCEAO (External indicators); Ministry of Finance and BCEAO (Fiscal and debt indicators); BCEAO and International Financial Statistics (Monetary indicators).
Adjustments: To arrive at the net general government (GG) debt, we subtract GG deposits in BCEAO and in financial institutions (liquid financial assets) from the GG debt stock.
Definitions: Savings is defined as investment plus the current account surplus (deficit). Investment is defined as expenditure on capital goods, including plant, equipment, and housing, plus the change in inventories. Banks are other depository corporations other than the central bank, whose liabilities are included in the national definition of broad money. Gross external financing needs are defined as current account payments plus short-term external debt at the end of the prior year plus nonresident deposits at the end of the prior year plus long-term external debt maturing within the year. Narrow net external debt is defined as the stock of foreign and local currency public- and private- sector borrowings from nonresidents minus official reserves minus public-sector liquid claims on nonresidents minus financial-sector loans to, deposits with, or investments in nonresident entities. A negative number indicates net external lending. N/A--Not applicable. LC--Local currency. CARs--Current account receipts. FDI--Foreign direct investment. CAPs--Current account payments. The data and ratios above result from S&P Global Ratings' own calculations, drawing on national as well as international sources, reflecting S&P Global Ratings' independent view on the timeliness, coverage, accuracy, credibility, and usability of available information.

Ratings Score Snapshot

Table 2

Senegal--Ratings score snapshot
Key rating factors	Score	Explanation
Institutional assessment	5	The country has established a track record of smooth transfers of power since its independence. However, parts of the population desire more political and economic participation. Checks and balances between institutions, enforcement of contracts, and respect for the rule of law is less reliable than in countries with stronger institutional assessments. Recent findings from the Court of Auditors point to severe malfunctions in the budgetary process.
Economic assessment	4	Based on GDP per capita ($) as per the Selected Indicators in Table 1.Above-average economic growth, measured using real GDP per capita trend growth, which is consistently well above that of other sovereigns in the same GDP per capita category.
External assessment	5	Based on narrow net external debt and gross external financing needs as per Selected Indicators in Table 1.
Fiscal assessment: flexibility and performance	6	Based on the change in net general government debt (% of GDP) as per Selected Indicators in Table 1.
Fiscal assessment: debt burden	6	Based on net general government debt (% of GDP) and general government interest expenditure (% of general government revenue) as per the Selected Indicators in Table 1. More than 40% of gross government debt is denominated in foreign currency. Nonresidents hold over 60% of government commercial debt.More than 40% of gross government debt is denominated in foreign currency. Nonresidents hold over 60% of government commercial debt.
Monetary assessment	4	The local currency (West African CFA franc) is pegged to the euro. Price stability, one of our key measures of monetary policy credibility, is relatively successfully managed, especially compared with other sub-Saharan African sovereigns. Market-based monetary instruments are in place, but monetary policy effectiveness may be untested in a downside scenario. Monetary union membership (Senegal is a member of the West African Economic and Monetary Union) constrains individual countries' monetary flexibility.
Indicative rating	b	As per table 1 of "Sovereign Rating Methodology.
Notches of supplemental adjustments and flexibility	0
Final rating
Foreign currency	B
Notches of uplift	0	We do not believe that default risks apply differently to foreign- and local-currency debt.
Local currency	B
S&P Global Ratings' analysis of sovereign creditworthiness rests on its assessment and scoring of five key rating factors: (i) institutional assessment; (ii) economic assessment; (iii) external assessment; (iv) the average of fiscal flexibility and performance, and debt burden; and (v) monetary assessment. Each of the factors is assessed on a continuum spanning from 1 (strongest) to 6 (weakest). S&P Global Ratings' "Sovereign Rating Methodology," published on Dec. 18, 2017, details how we derive and combine the scores and then derive the sovereign foreign currency rating. In accordance with S&P Global Ratings' sovereign ratings methodology, a change in score does not in all cases lead to a change in the rating, nor is a change in the rating necessarily predicated on changes in one or more of the scores. In determining the final rating the committee can make use of the flexibility afforded by §15 and §§126-128 of the rating methodology.

Environmental, social, and governance (ESG) credit factors for this change in credit rating/outlook and/or CreditWatch status: 

• Transparency and reporting

Related Criteria

• General Criteria: Environmental, Social, And Governance Principles In Credit Ratings, Oct. 10, 2021
• Criteria | Governments | Sovereigns: Sovereign Rating Methodology, Dec. 18, 2017
• General Criteria: Methodology For Linking Long-Term And Short-Term Ratings, April 7, 2017
• General Criteria: Principles Of Credit Ratings, Feb. 16, 2011
• General Criteria: Methodology: Criteria For Determining Transfer And Convertibility Assessments, May 18, 2009

Related Research

• Sovereign Ratings List, Feb. 19, 2025
• Sovereign Ratings History, Feb. 19, 2025
• Sovereign Ratings Score Snapshot, Feb. 6, 2025
• Sovereign Risk Indicators, Dec. 9, 2024, Oct. 7, 2024. Interactive version available at http://www.spratings.com/sri
• Kenya Downgraded To 'B-' On Weaker Fiscal And Debt Trajectory; Outlook Stable, Aug. 23, 2024
• Kenya’s Nationwide Protests Complicate An Already Arduous Path To Fiscal Consolidation, June 27, 2024

In accordance with our relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable (see 'Related Criteria And Research'). At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action (see 'Related Criteria And Research').

Ratings List

Downgraded
	To	From
Senegal
Sovereign Credit Rating	B/Negative/B	B+/Negative/B
Senior Unsecured	B	B+
Ratings Affirmed
Senegal
Transfer & Convertibility Assessment	BBB-

Primary Credit Analyst:	Mickael Vidal, Paris + 33 14 420 6658; mickael.vidal@spglobal.com
Secondary Contact:	Sebastien Boreux, Paris + 33 14 075 2598; sebastien.boreux@spglobal.com
Additional Contact:	Sovereign and IPF EMEA; SOVIPF@spglobal.com