Gambiaj.com – (DAKAR, Senegal) – Senegal’s financial crisis has deepened after S&P Global Ratings sharply downgraded the country’s sovereign credit rating, warning that a default or distressed debt exchange on its external commercial debt is now “extremely likely.”
In a decision issued on Friday, September 4, 2026, S&P lowered Senegal’s long-term foreign-currency sovereign rating from CCC+ to CC, while cutting the long-term local-currency rating from CCC+ to CCC. Both ratings carry a negative outlook.
The downgrade reflects S&P’s assessment that the debt restructuring being pursued by the Senegalese government is likely to result in losses for external creditors.
Debt Restructuring Raises Default Risk
S&P said it expects the ongoing renegotiation of Senegal’s debt to leave foreign-currency creditors receiving less than what was originally promised.
That could take the form of a reduction in principal, lower interest payments, or changes to the terms and timing of repayment, the agency said.
“An exchange in distressed conditions or a default on Senegal’s foreign-currency commercial debt is extremely likely,” S&P said.
The agency’s assessment follows the discovery in 2024 of billions of dollars in previously undisclosed public debt accumulated under Senegal’s former administration. The revelation has placed significant pressure on the government’s finances and complicated efforts to restore fiscal stability.
Senegal has been struggling to refinance its obligations while attempting to bring its debt back under control.
IMF Deal Offers Some Relief
The downgrade comes only days after Senegal reached an agreement with the International Monetary Fund that is expected to unlock a $2.2 billion, three-year lending programme.
The IMF agreement is intended to support the country’s economic and fiscal adjustment programme, but S&P’s latest assessment suggests that the financing will not, by itself, remove the immediate risks surrounding Senegal’s external debt.
The agency also confirmed Senegal’s short-term foreign- and local-currency ratings at C.
Second Major Downgrade in Days
S&P’s decision follows a similar move by Moody’s, which downgraded Senegal’s sovereign rating from Caa1 to Caa2 late last month and assigned a negative outlook.
Moody’s cited rising refinancing risks and limited room for the government to reduce its debt burden.
The successive downgrades by the two major international rating agencies underscore the scale of the financial challenges facing Dakar as it seeks to restructure its debt and restore investor confidence.
S&P to Review Rating Again on September 25
S&P said its next scheduled publication on Senegal’s sovereign rating will be Friday, September 25.
The agency indicated that an improvement remains possible if Senegal successfully completes a distressed debt exchange.
It said it could raise the foreign-currency rating if such an exchange is effectively completed.
For the local-currency rating to return to CCC+, S&P said it would need to see a significant reduction in the risk of default or distressed restructuring of domestic debt, alongside a substantial strengthening of the government’s cash position.
For now, however, the agency’s CC rating places Senegal only one notch above a selective default category, reflecting the severity of the risks surrounding the country’s debt obligations.
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