Senegal will “reprofile” 1.956 trillion CFA francs ($3.5 billion) in domestic payment arrears rather than pursue a formal debt restructuring, Prime Minister Ahmadou Al Aminou Lo told the National Assembly this week, warning that the backlog risks stalling economic activity and jobs if left unresolved.
Reprofiling, in Lo’s telling, means extending certain loan maturities and renegotiating interest rates without the formal “restructuring” label. The distinction matters commercially: any change to a loan’s original terms counts as restructuring in the eyes of international bond markets, and that label alone can raise a country’s future borrowing costs and choke off market access.
The arrears trace back to 2024, when Senegal’s new government discovered that the previous administration had failed to disclose significant financial commitments, a revelation that suspended an existing IMF program and triggered the current fiscal crisis. Senegal reached a staff-level agreement with the IMF last week for a new three-year, $2.2 billion financing package, conditioned on restoring public finances.
Source: Ecofin Agency
