Senegal Debunks €650M Secret Borrowing Allegations. Dakar, Senegal — The Senegalese government has refuted allegations that it secretly borrowed €650 million ($754 million) to avoid default, emphasizing that its financial actions were in compliance with “market transparency rules.”
The government, which came into power in April 2024, has accused the previous administration of former President Macky Sall of concealing a significant amount of debt.
According to a report by the Financial Times, the new Senegalese government secretly secured the funds from the Africa Finance Corporation and First Abu Dhabi Bank in 2024.
The report claims that these borrowings gave the banks privileges over existing bondholders.
However, the Senegalese finance ministry countered this, stating that the transactions were part of a strategy to diversify funding sources.
The government explained that the loans, which carry a 7. 1-percent interest rate, are “much more advantageous “than those available on international markets and were not concealed.
The deal with the Africa Finance Corporation, completed in May last year, enabled Senegal to raise up to €350 million, while the agreement with First Abu Dhabi Bank in June allowed for an additional €300 million, both loans set to end in 2028.
Despite the ongoing financial challenges, Senegal recently managed to pay off an international debt of $471 million, defying fears of default.
The nation faces a budget deficit of nearly 14 percent of GDP and a public sector debt estimated at 132 percent of national output at the end of 2024.
The current government also accused the previous administration of misrepresenting the budgetary situation.
The International Monetary Fund (IMF) had to suspend a $1. 8-billion aid program in 2023 due to concerns over false statements regarding budget deficits and public debt for the 2019–2023 period.
The situation underscores the ongoing fiscal challenges faced by Senegal, as it grapples with repaying its substantial debt and covering operational costs.
Further details are expected as the government continues to address its financial situation.
