Senegal budget deadlock puts $2.2bn IMF loan at risk

Senegal's budget deadlock is putting a planned $2.2 billion International Monetary Fund loan programme at risk and threatening government spending for 2027.

President Bassirou Diomaye Faye is in a standoff with the National Assembly, where the opposition Pastef party holds 130 of 165 seats. Pastef rejected a revised 2026 budget earlier this month and has said it will also reject the 2027 budget.

The two budget bills are important to Senegal's debt plans. The IMF announced the loan programme in September, but it remains subject to conditions and has not yet been approved by the fund's executive board.

Senegal's public-sector debt was estimated at 132 percent of GDP at the end of 2024. The IMF has asked Senegal to address debt settlement in its budget.

Economist Amath Ndiaye told AFP the budget blockade did not automatically undermine the technical agreement with the IMF, but could seriously delay board approval. Economist Ahmadou Aly Mbaye said the absence of an IMF agreement could delay disbursements expected from other donors and increase pressure on Senegal's finances.

Pastef leader Ousmane Sonko, the speaker of the National Assembly and a former prime minister, has criticised debt restructuring and what he called IMF “conditionalities”. The party has accused the government of cutting social spending in the revised 2026 budget and has questioned revenue forecasts in the proposed 2027 budget.

If the 2027 budget remains blocked, new planned spending would not take effect. The government has said that could expose the country to electricity cuts and prevent it from paying arrears owed to businesses or aid to poor families.