Omanghana
The United States has called for Senegal’s debt restructuring to be completed in less than a year, describing the country’s request for relief as an encouraging sign of progress under the G20 Common Framework.
U.S. Treasury Undersecretary for International Affairs Erin Browne outlined Washington’s position on October 15 during the IMF and World Bank annual meetings in Bangkok. The timeframe represents a policy objective rather than a formal ultimatum.
Senegal is seeking to restore financial stability after the discovery in 2024 of substantial public debt that had not been disclosed by the previous administration. The revelations undermined confidence in the country’s accounts and complicated its access to international financing.
The debt reassessment pushed the country’s debt-to-GDP ratio to around 130 per cent and prompted the International Monetary Fund to freeze its existing US$1.8 billion support program.
The government is now pursuing a debt overhaul alongside a proposed US$2.2 billion IMF program. IMF Managing Director Kristalina Georgieva has expressed optimism about the negotiations, noting that staff had reached an agreement on the financing package while Senegal and its creditors continued discussions on debt treatment.
The restructuring is being closely watched as a test of efforts to make the G20 Common Framework faster and more effective. Earlier cases, including Zambia and Ghana, exposed lengthy delays in coordinating agreements among different creditor groups.
Senegal is aiming for an agreement in principle with official lenders and bondholders by December, according to sources cited by Reuters. Its government has also held discussions with banks holding debt outside its international bonds.
However, negotiations remain challenging. A group of international bondholders has appointed financial advisers and warned that proposals involving reductions in principal repayments could complicate efforts to reach a swift settlement.
Source: Omanghana
