New IMF agreement: The state welcomes it, but Senegalese citizens may suffer, says Dr. Balla Khouma

The country's economic image has been linked to a "hidden debt" issue, with the debt ratio increasing by over 30 points and its rating downgraded by Moody's from Ba3 to Caa2 in August 2026. This has limited Senegal's access to international markets, leading to high-interest regional agreements. While the IMF agreement could be a lifeline, Dr. Khouma argues it might dramatically increase household poverty if domestic resource mobilization relies on indirect tax hikes, increased energy prices, reduced exemptions without distinction, or pressure on small businesses.

Similarly, if expenditure rationalization leads to reduced subsidies, limited public recruitment, restricted social investments, or transferred costs to households, it could create socially regressive austerity that targeted cash transfers alone cannot mitigate. Dr. Khouma questions the effectiveness of targeted aid when it only partially covers losses from subsidy removals or increased living costs. He cites Nigeria's experience, where fuel subsidy removal and currency depreciation led to 63% poverty and 27 million people facing food insecurity by autumn 2025, despite IMF-supported reforms.

Ghana's case also shows that even with increased cash transfers, extreme poverty rose to 29.5% in 2023 amid economic