Senegal has denied allegations that it secretly borrowed €650 million ($754 million) to avert a potential default, insisting the transactions complied with market transparency rules.
The response follows a report by the Financial Times, which said the government secured funding last year from the Africa Finance Corporation (AFC) and First Abu Dhabi Bank under arrangements that gave the lenders preferential treatment over existing bondholders.
In a statement issued late Tuesday, Senegal’s finance ministry said the deals were part of a broader strategy to diversify funding sources as the country seeks to manage its rising debt and cover state spending.
According to the report, the borrowing was structured through newly issued domestic sovereign bonds using financial instruments known as total return swaps—mechanisms that can prioritise repayment to certain creditors in the event of default.
The government rejected claims that the transactions were concealed, stating they were conducted “in accordance with market transparency rules” and offered more favourable terms than those available on international markets. The loans carry an interest rate of 7.1%.
The AFC agreement, finalised in May 2025, allowed Senegal to raise up to €350 million, while a separate three-year swap deal with First Abu Dhabi Bank, signed in June, provided an additional €300 million. Both arrangements are due to mature in 2028.
Earlier this month, Senegal repaid $471 million in external debt, easing concerns among analysts about a possible default.
However, the country continues to face mounting fiscal pressures. Its budget deficit is estimated at nearly 14% of gross domestic product, while public debt stood at around 132% of GDP at the end of 2024.
The current administration, which took office in April 2024, has accused former president Macky Sall’s government of concealing the true scale of the country’s financial situation.
An International Monetary Fund (IMF) mission last year found that Senegal had misreported key data on budget deficits and public debt between 2019 and 2023. The IMF has since suspended a $1.8 billion support programme agreed in 2023, pending further clarification and reforms from the new government.