Gambiaj.com – (Dakar, Senegal) – Senegal’s sovereign credit rating has been significantly downgraded by Moody’s Investors Service, a move driven by recent revelations from the country’s Court of Auditors regarding the true state of public finances under former President Macky Sall. The downgrade, first reported by Bloomberg, raises concerns about Senegal’s economic stability and fiscal management.

According to Moody’s press release, Senegal’s long-term foreign currency credit rating has been lowered by two notches to B3, placing it six levels below investment grade. Even more troubling, the outlook has been classified as “Negative,” following a prior warning that the rating was under review for a possible downgrade.

The decision comes at a pivotal moment in Senegal’s political landscape, as President Bassirou Diomaye Faye, who assumed office in April, has ordered a comprehensive audit of the nation’s finances. The findings from this audit underscore a dramatic rise in national debt during Sall’s final term in office.

Financial figures revealed in the Court of Auditors’ report are deeply concerning. The debt-to-GDP ratio surged to 99.7% in 2023, a sharp increase from 65.6% in 2019. Moreover, the budget deficit was reassessed at 12.3% of GDP in 2023—more than double the 4.9% initially reported by the previous administration.

Moody’s evaluation, as quoted by Bloomberg, points to serious governance failures, stating, “The downgrade is motivated by substantially weaker budgetary indicators revealed by Senegal’s Court of Auditors. The extent and nature of these discrepancies significantly restrict Senegal’s fiscal maneuverability and contribute to high financing needs, while also highlighting material governance deficiencies.”

The credit rating downgrade is expected to have serious implications for Senegal’s ability to secure funding from international markets and attract foreign investments. This comes at a time when the country is grappling with major economic challenges and seeks to restore investor confidence under the new administration.