• Senegal raises 50 billion CFA francs through 364-day treasury bills

• Three- and five-year bond tranches receive no investor bids

• Repayment of $485 million eurobond due March 13

Senegal's Treasury on Monday raised the full 50 billion CFA francs ($88.6 million) it sought on the regional market, but exclusively through 364-day treasury bills.

Both bond tranches received no bids. A three-year OAT at 6.30% and a five-year OAT at 6.45% failed to attract investors at the rates set by Dakar, reflecting investor caution ahead of a major repayment due later this week.

On Friday, March 13, Senegal must repay 333.3 million euros (about $388 million) on eurobonds issued in March 2018. Total principal and interest due amount to roughly $485 million, according to Reuters and Bloomberg. The Treasury has already raised more than 700 billion CFA francs on the UEMOA market since the start of the year to secure that repayment, with Monday’s auction completing the effort.

At Monday’s sale, the marginal rate on the 364-day T-bill settled at 6.75%, down from 6.98% at the previous auction on Feb. 27. The easing on short-term borrowing costs comes alongside an unusual mismatch. Investors are demanding higher yields to lend to Dakar for 364 days than the government is offering on its three- and five-year bonds.

These tensions are unfolding against the backdrop of an unprecedented public financing crisis. Senegal’s total public sector debt reached 132% of GDP at end-2024, according to the International Monetary Fund. The IMF suspended a $1.8 billion financing program in 2024 after undisclosed commitments were uncovered under the previous administration.

An audit by the Cour des comptes found that the budget deficit had been understated by as much as seven percentage points of GDP annually, placing the debt ratio at close to 100% of GDP at end-2023, compared with the previously reported 74%.

Since then, Dakar has had to rely heavily on the regional market. With the IMF program suspended, the government has financed about 75% of its 2025 borrowing needs through the UEMOA market and has raised around 4 trillion CFA francs so far this year.

That reliance on short-term, relatively costly financing is adding to a looming refinancing challenge. Between 2026 and 2028, the country will need to mobilize nearly 14.87 trillion CFA francs to service its debt.

President Bassirou Diomaye Faye’s government is pursuing a gradual fiscal consolidation plan. It aims to reduce the deficit from 13.4% of GDP in 2024 to 7.8% in 2025, before lowering it further to 5.37% in 2026 and 3% in 2027. However, until the IMF formally endorses a new support program, investors are likely to keep pricing in that uncertainty and remain reluctant to lend to Senegal over longer maturities.

Fiacre E. Kakpo