Senegal's economic outlook darkens as Moody's downgrades sovereign rating to Caa2

The outlook remains negative, indicating an increased credit risk. Moody's cited a higher risk of default due to persistent liquidity pressures or debt treatment involving private sector creditors. The agency believes the Senegalese state's ability to meet its financial commitments has deteriorated.

Key factors include rising refinancing pressures, weakened debt servicing capacity, and limited deleveraging prospects. Annual debt principal repayment is estimated at 18% of GDP, and interest payments now absorb 23.7% of state revenues, up from 16.1% in 2023. Total public debt, including public enterprises, is approximately 108% of GDP, placing Senegal among the continent's most indebted nations relative to its wealth.

Consequently, Moody's also lowered Senegal's country ceilings to B1 for local currency and B2 for foreign currency, affecting the cost of international financing for public and private borrowers. This downgrade occurred during an International Monetary Fund mission in Dakar, from August 19 to September 1, 2026, to negotiate a new support program. Moody's noted that the prolonged absence of an IMF program has increased Senegal's reliance on regional UEMOA market financing, representing about 25% of GDP, which heightens refinancing risk and borrowing costs.

The agency also highlighted