IMF’s proposed Senegal debt restructure a ‘disgrace’, prime minister says

International Monetary Fund wants Senegal to restructure its debt but the West African country is resisting such a move because it would be “a disgrace,” Senegalese Prime Minister Ousmane Sonko has told a rally in the capital Dakar. The IMF, which completed a mission to Senegal on Thursday without agreeing a new lending programme, froze Senegal’s previous $1.8 billion programme last year after its then-new leaders disclosed hidden debts which have since ballooned to more than $11 billion.

The IMF, a spokesperson for Sonko and a spokesperson for Senegal’s finance ministry did not immediately respond to requests for comment on Sunday. President Bassirou Diomaye Faye has blamed the hidden debt crisis on his predecessor Macky Sall, a position Sonko reiterated on Saturday at a rally for the ruling Pastef party. “What the IMF is proposing is a restructuring of this abysmal debt that Macky Sall’s party has burdened us with,” he said. “What we told our partners is that we don’t want a restructuring because it would be a disgrace for Senegal.”

“It would imply that Senegal is a bad student who borrowed money with the intent to steal. We told them that this country is a country of dignity, a country of pride, that the Senegalese people will rise to the occasion, and that the Senegalese people will take responsibility.” It was unclear whether Sonko was referring to a restructuring of domestic or international debt, or both. The IMF estimates that at the end of last year total public sector debt, including state-owned enterprises, stood at 132% of GDP, including 4% in domestic expenditure arrears. Mission Chief Edward Gemayel told journalists that talks would continue in the coming weeks and that Senegal was serious about getting its debts in check.

Gemayel also said a debt sustainability analysis, which is still in the works, would determine whether a restructuring was necessary. But in order to get Fund money, Senegal would have to take steps to put its debt on a sustainable path under the IMF parameters. Sonko in August unveiled a new economic recovery plan for Senegal, pledging to finance 90% of the initiative through domestic resources and avoid additional debt. Reuters