Moody's Ratings downgraded Senegal's long‑term foreign‑currency and local‑currency issuer ratings, as well as its foreign‑currency senior unsecured rating, to Caa2 from Caa1. The agency maintained a negative outlook and affirmed the short‑term rating at Not Prime.
The downgrade was accompanied by a reduction in the country ceilings: the local‑currency ceiling fell to B1 from Ba3, and the foreign‑currency ceiling dropped to B2 from B1.
Moody's highlighted financing needs equal to roughly 25% of Senegal's rebased 2026 GDP. Government debt is projected to stabilise around 100% of GDP through 2028, driven by weaker growth, higher subsidy costs and rising interest expenses. Since the start of the year, regional market borrowing and issuance have amounted to about 8% of GDP.
Interest payments surged to 23.7% of revenue, up from 16.1% in 2023, widening the fiscal gap. The agency estimated a 10%‑20% loss‑given‑default range for private‑sector creditors in any debt‑treatment scenario aimed at easing liquidity pressures.
Moody's cited several drivers: increasing refinancing pressure, deteriorating debt affordability, and the absence of an IMF programme, which has forced reliance on regional market funding and heightened rollover risk. While the fiscal deficit narrowed sharply in 2025 due to cuts in capital spending, weaker growth and higher subsidy outlays in 2026 are expected to reverse that trend. Institutional tensions following the dismissal of former Prime Minister Ousmane Sonko and his election as President of the National Assembly were also noted as a factor that could delay fiscal measures.
The downgrade reflects broader concerns about Senegal's ability to service its debt without external support, with the World Bank providing residual assistance but no new IMF programme in place.
