The IMF and Senegal agreed on a $2.2 billion loan package, with the West African country announcing a plan to restore “debt sustainability.” The developments mark key steps in tackling an economic crisis sparked by the discovery of previously unreported debt. The IMF suspended an earlier program after the government said it had uncovered billions of dollars in undisclosed debt left by the previous administration, causing the West African nation’s debt bill to soar to more than 130% of its GDP.
Disagreements over how to resolve the debt problem spawned a political crisis that tore up an alliance between leading figures in the government that came to power two years ago. President Bassirou Diomaye Faye suggested he was open to restructuring, which his previous Prime Minister Ousmane Sonko opposed. The disagreement prompted Faye to fire Sonko and dissolve his government before appointing new ministers.