Senegal is grappling with a sharp financial crisis, as its Eurobond yields soared to 21.79 percent for the March 2038 issuance, up from 19.48 percent, signaling rising investor concern and potential default risks.
The spike comes amid revelations of undisclosed debt and a downgrade in the country’s credit rating.
A recent audit by Senegal’s new government uncovered $11 billion in previously misreported or hidden debt, pushing the nation’s debt-to-GDP ratio to around 132 percent, far above earlier official estimates.
The International Monetary Fund (IMF) had suspended its $1.8 billion lending program to Senegal last year due to these irregularities, and negotiations for a new program stalled as the government refused debt restructuring.
The macroeconomic outlook is equally concerning. Public debt continues to grow, projected to rise another 12 percent by year-end 2025. Fiscal shortfalls have also widened, with revenues consistently falling below budget estimates over the past three years.
Investors are now pricing Senegal’s Eurobonds as distressed assets, trading at roughly 80 cents on the dollar to reflect the heightened risk. Rating agencies have downgraded Senegal’s sovereign credit to ‘B−’ with a negative outlook, putting it on par with Nigeria’s current rating.
In contrast, Nigeria’s sovereign debt profile remains relatively stable, supported by higher oil revenues, fiscal consolidation, and greater transparency in federal borrowing. Nigerian Eurobonds continue to attract investor confidence, with some issues trading at premiums, highlighting a sharp divergence between the two West African economies.
