(Ecofin Agency) - The hidden debt comes with a repayment schedule that is not publicly disclosed. By 2028, the Senegalese government will have to repay the equivalent of $4.13 billion in debt.

The International Monetary Fund (IMF) is working “fast and bold” with Senegalese authorities to address concerns over the underreporting of public debt between 2019 and 2023, as recently revealed by the country’s Court of Auditors. In an emailed statement, IMF Communications Director Julie Kozack confirmed that, under the institution’s rules, no financial disbursements will be made until these discussions are finalized.

Following the discovery of these accounting irregularities, Prime Minister Ousmane Sonko’s government opted out of the second review of Senegal’s ongoing $1.8 billion program with the IMF, leading to a suspension of related disbursements. Despite this setback, Senegalese officials hope to reach a new agreement with the IMF by June 2025. While IMF representatives say they are making every effort to resolve the issue within a reasonable timeframe, they have not provided a specific deadline. Meanwhile, talks are also underway with the World Bank for a separate $300 million financing package.

So far, Senegal has not defaulted on its international obligations. However, pressure on the government’s ability to meet its commitments is expected to remain high over the next two years. The Court of Auditors’ report uncovered CFA2.5 trillion ($4.13 billion) in undisclosed debt owed to local banks. Some sources indicate that efforts are underway to restructure parts of this debt, though officials stress that these adjustments do not amount to a forced restructuring, which would be considered a default.

In its initial 2025 draft budget, the government had allocated CFA2.93 trillion for debt repayment. However, following the Court of Auditors' findings, projections for 2025 and 2026 may need to be revised upward.

Without renewed support from the IMF and other Bretton Woods institutions, Senegal’s options are limited. Still, the country’s position in international markets is not entirely bleak. The value of its $1 billion eurobond, maturing on March 13, 2028, has dropped 6% since the start of the year and is now trading at 87.18%. This decline accelerated after Senegal’s sovereign credit rating was downgraded. However, the market reaction has been less severe than some had feared. The bond is currently valued at 28.5% above its lowest point, recorded on June 15, 2022, when it fell to 76.2%.