Senegal has secured funds to service its Euro-denominated debt obligations. According to sources cited by Bloomberg, this payment of almost $485million due in March 2026 includes a crucial ₤333.3 million ($394 million) principal repayment on its 2028 euro-denominated bond and various coupons. This news triggered an immediate rally on the nation’s 2031 and 2048 bonds, turning them into top performers in emerging markets this week.
The government of the West African nation, led by President Bassirou Diomaye Faye and Prime Minister Ousmane Sonko’s administration, has been under intense pressure from global investors and the IMF following the 2024 discovery of $7 billion in undisclosed debt left by the previous government.
Senegal’s sovereign creditworthiness has been under significant strain. In mid-2025, Standard & Poor’s downgraded the country’s long-term foreign currency rating to ‘B-’, the lowest level in about 25 years.
It cited the sharp rise in public debt after audits revealed previously undisclosed borrowings and the widening fiscal deficit that left little buffer against shocks. The downgrade also reflected risks around fiscal transparency and future financing costs, complicating efforts to re-engage with international lenders like the IMF.
This financing squeeze has already shifted Senegal’s debt strategy. With the IMF’s $1.8bn lending programme effectively frozen since 2024 due to reporting irregularities, the government has leaned heavily on domestic and regional markets to fund its obligations, including strong demand for recent CFA-franc-denominated bond issues.
While investors have supported these local issuances, sustained reliance on shorter-term regional debt raises questions about rollover risk and medium-term fiscal sustainability if external support remains stalled.
Meeting this deadline was crucial in signalling Senegal’s ability to meet debt repayments and a critical test of the country’s solvency. People familiar with the matter told Bloomberg that the funding has been successfully consolidated ahead of the March deadline for the Eurobond payments.
The move was necessary to avoid a forced debt restructuring. Investor anxiety had spiked after the IMF suspended a $1.8 billion package, leaving Senegal as the only African nation trading in “distress territory” with risk premiums exceeding 1,150 basis points. Securing this liquidity was essential to restore market confidence and prove that the Faye administration can manage its inherited liabilities.
However, to achieve this feat, the government pivoted to a heavy internal borrowing strategy. Senegal raised 510 billion CFA francs on the regional market in just over a month, with plans to raise another 490 billion by the end of Q1 says reports from Bloomberg.
By shifting issuance toward shorter-term bills and exceeding debt auction targets, the finance ministry generated the cash flow required to cover the March maturities.
Despite the successful fundraising, credit analysts like Mark Bohlund of REDD Intelligence warn that the reliance on short-term regional bills could create a “liquidity lid” that may become unsustainable in the second half of the year. For now, however, Senegal has bought itself the time it needs to avoid a credit meltdown.
