• Senegal raised CFA108.79 billion ($195 million) on the regional market but at rising short-term borrowing costs.
• Its 364-day yield reached 6.79%, 63 basis points higher than Burkina Faso’s despite security risks there.
• The country faces a $485 million Eurobond repayment in mid-March as its IMF program remains suspended.

Senegal raised CFA108.79 billion ($195 million) on the regional debt market on February 27 exceeding its CFA100 billion target. But the cost of short-term borrowing continued to climb, underscoring lingering investor concerns amid a broader sovereign debt crisis.

According to UMOA-Titres, the regional agency that manages bond issuances for member states of the West African Economic and Monetary Union, the auction was 161% oversubscribed. However, the average yield on 364-day Treasury bills rose to 6.79%, up 17 basis points from the previous session on February 20.

Short-Term Borrowing Costs Higher Than Burkina Faso’s

The latest yield places Senegal in a striking position: it is now borrowing short term at rates 63 basis points higher than Burkina Faso, even though parts of Burkina Faso’s territory remain under the control of armed jihadist groups. Just two days earlier, on February 25, Ouagadougou raised its own 364-day bills at an average yield of 6.16%.

Analysts say the gap reflects market distrust toward Dakar following the 2024 disclosure of nearly $7 billion in previously unreported financial commitments under the prior administration.

The International Monetary Fund estimates that Senegal’s public debt reached 132% of GDP at the end of 2024, compared with the 74% officially reported under former President Macky Sall. Ratings agency Moody’s has since downgraded the country’s sovereign rating to Caa1 with a negative outlook.

Heavy Reliance on Côte d’Ivoire

The geographic breakdown of bids highlights another vulnerability. Côte d’Ivoire and Senegal itself accounted for more than 91% of the amounts accepted at Friday’s auction.

Ivorian banks submitted CFA55.61 billion in bids for the 364-day bills, of which CFA39 billion were accepted.

Meanwhile, Senegal — through its public and semi-public financial institutions — absorbed 82% of the three-year bonds allocated, or CFA42.5 billion out of CFA51.5 billion issued at that maturity.

A Critical Payment in Two Weeks

The auction comes just two weeks before a major repayment deadline. On March 13, Senegal must repay a Eurobond issued in 2018, totaling $485 million in principal and interest.

According to sources cited by Reuters and Bloomberg on February 17, the Treasury has secured the necessary funds to meet the payment. Since January 1, the government led by President Bassirou Diomaye Faye and Prime Minister Ousmane Sonko has raised nearly CFA700 billion on the regional market through weekly UMOA-Titres auctions and, more discreetly, through total return swaps (TRS).

These over-the-counter derivative instruments, negotiated with international banks, allow Senegal’s Treasury to obtain immediate foreign currency liquidity by posting domestic debt securities as collateral.

Estimates cited by Bank of America in early December 2025 suggest Senegal contracted between $750 million and $1 billion in TRS in 2025, backed by 1.3 to 1.5 times their value in local debt. Multiple sources confirm that the government has already used these instruments again in early 2026. Last week, the West African Development Bank (BOAD), which holds part of its liquidity in dollars, disclosed that it was investing in regional sovereign securities — a rare move for the development bank, which has seldom commented publicly on its treasury operations.

Financing efforts continue. Dakar has also launched an additional CFA200 billion fundraising through the syndicated segment of the regional market. Once issued, these bonds are listed on the Regional Stock Exchange (BRVM) in Abidjan. This would mark Senegal’s first public offering of the year, with plans to carry out four such operations in 2026, as it did in 2025.

IMF Program Still on Hold

The main medium-term concern remains the suspension of Senegal’s $1.8 billion IMF program since November 2025, after talks collapsed. The breakdown immediately triggered a sharp sell-off of Senegal’s Eurobonds on international secondary markets, with some securities trading at discounts of up to 49%.

A new IMF mission chief arrived in Dakar in January to restart negotiations, but no agreement has yet been announced. The government has reiterated that it opposes any debt restructuring involving a “haircut” for creditors. Prime Minister Sonko has said the administration prefers a “reprofiling of maturities” rather than a reduction in principal.

Senegal’s total financing needs for 2026 are estimated at CFA6,075 billion under the draft Finance Law, including CFA4,307 billion solely for debt amortization.

Fiacre E. Kakpo