By Emmanuel Nduka
The government of Senegal has rejected claims that it secretly secured €650 million in loans to avoid a potential default, insisting that all transactions were conducted in line with established transparency rules.
The denial follows a report by the Financial Times alleging that Senegal quietly obtained financing from the Africa Finance Corporation and First Abu Dhabi Bank, granting them preferential treatment over existing bondholders.
In a statement, Senegal’s finance ministry said the deals were part of a broader plan to diversify funding sources as the country works to manage its rising debt burden and meet government expenditure obligations. Authorities stressed that the transactions were neither concealed nor irregular, describing them as consistent with “market transparency rules”.
According to details reported, Senegal raised up to €350 million through a deal with the Africa Finance Corporation in May 2025, followed by a €300 million arrangement with First Abu Dhabi Bank in June. Both loans, structured using financial instruments known as total return swaps, are expected to mature in 2028 and carry an interest rate of about 7.1 percent.
Government officials argue that the terms are more favourable than those available on international markets, especially as the country faces mounting fiscal pressures. Senegal is currently grappling with a budget deficit estimated at nearly 14 percent of its Gross Domestic Product, while public debt stood at about 132 percent of national output at the end of 2024.
The current administration has also accused the government of former president Macky Sall of underreporting the true scale of the country’s debt and budget deficits between 2019 and 2023.
An earlier assessment by the International Monetary Fund found discrepancies in Senegal’s fiscal reporting during that period, prompting the suspension of a $1.8 billion support programme approved in 2023, pending further clarification from the new authorities.
Despite concerns from analysts over default risks, Senegal recently repaid an international debt of $471 million, signaling efforts to stabilise its financial position while maintaining access to funding.
