Gambiaj.com – (DAKAR, Senegal) – Senegal’s financial credibility suffered another major setback on Friday after S&P Global downgraded the country’s long-term sovereign rating from “B-” to “CCC+”, citing a precarious debt position and mounting refinancing risks, Reuters reported.
The rating agency also placed Senegal on CreditWatch with a developing outlook, signaling that further downgrades remain possible if authorities fail to secure refinancing for looming commercial debt maturities.
In its assessment, S&P warned that Senegal’s public finances have reached a critical point. “Public sector borrowing needs for 2026 are high, as are the level and cost of overall public debt and the starting point of the budget deficit, making public finances precarious,” the agency stated.
The downgrade marks the latest chapter in a financial crisis that erupted last year after the new administration disclosed the existence of previously undeclared public debt stock—now estimated at $11 billion—incurred under the former government.
The revelation shocked investors and cast doubt over the reliability of Senegal’s public accounts, triggering severe turbulence across international markets.
The fallout has been swift. The International Monetary Fund suspended a $1.8 billion program with Senegal following the discovery of the hidden liabilities, leading to a steep decline in the country’s Eurobonds and a wave of downgrades from major credit agencies.
S&P had already lowered Senegal’s rating to B- with a negative outlook in July, while Moody’s cut its own rating to CAA1 last month, underscoring the broader market consensus on Senegal’s deteriorating creditworthiness.
Government officials have since engaged in multiple rounds of negotiations with the IMF in an attempt to resolve the discrepancies in previous debt reporting. However, discussions during the Fund’s visit to Dakar last week concluded without a new agreement, deepening uncertainty over Senegal’s fiscal trajectory.
With significant refinancing obligations approaching in 2026 and external borrowing options shrinking due to weakened investor confidence, Senegal faces what analysts describe as an increasingly narrow path to avoid default. Experts warn that the country may be forced into drastic fiscal adjustments or even pursue a debt restructuring if it cannot stabilize its position.
S&P’s placement of Senegal under CreditWatch means any further setbacks—whether stalled IMF talks or repayment challenges—could result in additional downgrades, pushing the country even closer to technical default.
