A significant conference addressing Sénégal’s escalating debt crisis recently convened in Dakar, under the patronage of Prime Minister Ousmane Sonko. Although Sonko himself was unable to attend the opening due to illness, as conveyed by Justice Minister Yacine Fall, the event proceeded with a clear mandate: to explore innovative solutions beyond the traditional framework offered by the International Monetary Fund (FMI).
Representing the ruling Pastef party, Ayib Daffé, president of the African Patriots of Sénégal for Work, Ethics, and Fraternity parliamentary group, emphasized the urgent need to broaden perspectives and move away from a singular approach to debt management. This implicitly challenged the FMI’s proposal for debt restructuring – a renegotiation of loan terms when repayment becomes unfeasible – an option that Dakar has firmly rejected.
“Alternatives are essential”
Economists participating in the conference unanimously agreed that Sénégal’s external debt is unsustainable, a stark contrast to previous official assurances. They stressed the critical need for immediate solutions, as the nation’s current revenues are insufficient to service its obligations to foreign creditors. Economist Souleymane Bah elaborated on this pressing issue.
“The state’s current income simply cannot cover both the principal and interest payments,” Bah explained. “Typically, they borrow more to repay existing external debt. However, with interest rates steadily climbing, this is no longer a viable strategy. We must identify and implement other alternatives.”
The primary objective of this conference, organized by the Ideas Africa Network think tank, is precisely to explore such alternative solutions, based on their belief that the FMI’s approach falls short.
“The FMI’s approach fundamentally opposes economic transformation,” argued Ndongo Samba Sylla, an economist and researcher with Ideas Africa. “It’s a purely accounting-driven, pro-creditor perspective. The FMI’s primary goal is to lend you money so you can signal your ability to borrow again and pay creditors, not to foster investment in genuine economic transformation.”
Among the proposed pathways for Sénégal are comprehensive monetary system reform, a potential withdrawal from the Franc CFA currency zone, and advocating for the cancellation of a portion of the debt deemed “illegitimate.” This illegitimate debt refers to obligations contracted under the previous administration through opaque means, without proper declaration.
However, a potential contradiction emerged within the current leadership. While experts in Dakar, with Prime Minister Ousmane Sonko’s endorsement, deliberated on solutions independent of the FMI, President Bassirou Diomaye Faye was simultaneously in Nairobi, Kenya, engaging in discussions with FMI Director Kristalina Georgieva. As of now, these separate engagements have not yielded further public advancements on the debt issue.
