Standard & Poor’s has downgraded again the credit rating of Senegal from B- to CCC+, deepening the country’s position in junk territory amid the $ 7 billion hidden debt scandal and the $ 747 million borrowed secretly by Dakar through Total Return Swaps (TRS) to keep up appearance and hide its alarming financial situation.
The global rating agency said it lowered the West African country rating to CCC+ due to the growing gross financing to 26% of GDP in 2026, the freezing of IMF $1.8 Bln bailout talks and increasing reliance on the regional debt market.
According to S&P, this heightens rollover risk because regional financing typically comes at shorter tenors and higher costs than the foreign currency commercial and concessional debt to which the country has lost access, following the findings of the debt audit.
The outlook is negative due to persistent risks to refinancing Senegal’s elevated government debt stock, amid deteriorating global financing conditions and a lack of progress in securing multilateral support that would unlock access to cheaper, concessional funding and ease liquidity pressures.
Senegal is among the most heavily indebted speculative-grade sovereigns globally. Its government debt stood at 118% of GDP as of December 2025, by our estimate. Incorporating liabilities from state-related entities (about 9% of GDP) and arrears (about 4% of GDP) included in the IMF’s end-2024 estimate, it would be closer to 131%, assuming these components remain broadly stable as a share of GDP.
With the suspension of the IMF bailout program, blocking Senegal’s access to longer maturity external financing, the country has increased its reliance on the West African Economic and Monetary Union (WAEMU) domestic markets to meet its high gross financing needs which hit 26% of GDP while interest payments alone are projected to consume 25% of government revenue this year, leaving limited room for essential spending.
According to S&P, higher reliance on domestic financing will perpetuate Senegal’s elevated refinancing requirements, and rising cost of debt at rates that also reflect the recent deterioration in global financial markets due to the Middle East war.
Furthermore, the country’s public debt has soared to 132% of GDP, after the revelation of hidden liabilities equivalent to roughly 25% of economic output. External debt service obligations remain elevated, with analysts noting roughly $4.6 billion due in 2026, including commercial maturities that are harder to roll over at sustainable rates.
Senegal’s deeper junk status signals heightened default risks to investors and creditors. It makes future borrowing even more expensive and restricts access to international capital markets, forcing greater dependence on regional lenders. This could trigger a vicious cycle: higher interest rates undermine productive investment, while any further delays in IMF talks prolong uncertainty.
