By Emmanuel Nduka
The government of Senegal has denied claims that it secretly secured €650 million in loans to avert a potential default, asserting that all transactions complied with established transparency regulations.
Response to Financial Times Report
The denial comes after a report by the Financial Times alleged that Senegal quietly obtained financing from the Africa Finance Corporation and First Abu Dhabi Bank, granting them preferential treatment over existing bondholders.
In an official statement, Senegal’s finance ministry said the loans were part of a broader strategy to diversify funding sources while managing rising debt and meeting government expenditure obligations.
Authorities emphasised that the transactions were neither concealed nor irregular and were consistent with market transparency rules.
Details of the Loans
According to reports, Senegal raised €350 million through the Africa Finance Corporation in May 2025, followed by a €300 million arrangement with First Abu Dhabi Bank in June.
Both loans, structured using total return swaps, are set to mature in 2028 with an interest rate of approximately 7.1 percent.
Officials argue the terms are more favourable than current international market rates, particularly given the country’s fiscal pressures. Senegal faces a budget deficit of nearly 14 percent of GDP, with public debt at about 132 percent of national output as of the end of 2024.
Context and Fiscal Oversight
The current administration has also accused the previous government under former President Macky Sall of underreporting debt and budget deficits between 2019 and 2023.
An International Monetary Fund assessment found discrepancies in Senegal’s fiscal reporting during that period, leading to the suspension of a $1.8 billion support programme pending clarification.
Despite analyst concerns about default risks, Senegal recently repaid an international debt of $471 million, demonstrating efforts to stabilise its finances while maintaining access to funding.
