S&P Global Ratings downgraded Senegal’s long-term foreign currency rating, citing a high chance that the country will default on its debt following an agreement reached with the IMF for a $2.2 billion loan. The rating decision drops the West African nation deeper into junk territory and underscores its vulnerability since the government identified billions of dollars in undisclosed debt from a previous administration.
Disagreements over how to resolve the problem created a political crisis that ended an alliance between leading figures in the government that came to power in 2024. President Bassirou Diomaye Faye suggested he was open to debt restructuring, which his previous Prime Minister Ousmane Sonko opposed. The schism led to Faye firing Sonko and dissolving his government before appointing new ministers. Sonko, who now holds the influential role of parliamentary speaker, recently softened his stance on debt restructuring.