• Côte d'Ivoire keeps BB/B rating, but Senegal debt exposure flagged
  

• Ivorian banks now key conduit for risky Senegalese bond financing
  

• S&P sees limited contagion, but rising regional stress is a concern
  

S&P Global Ratings has affirmed Côte d'Ivoire's sovereign credit rating at 'BB/B' with a stable outlook. The agency warned, however, about the growing exposure of Ivorian banks to Senegalese public debt as Dakar faces a major fiscal crisis.

The warning follows S&P’s downgrade of Senegal’s sovereign rating to 'CCC+' on Friday, November 14, 2025, citing massive funding requirements projected to reach 29 percent of GDP in 2026 alone. S&P noted that the regional environment has become more uncertain after Senegal's downgrade.

Ivorian Banks as Key Intermediaries

Ivorian banks have become the leading buyers of Senegalese government securities on the regional market. The stock held by Abidjan-based institutions reached 1.8 trillion XOF (3.18 billion dollars) in September 2025, equivalent to nearly 3.1 percent of Côte d'Ivoire's GDP. S&P explained that this rapid increase is largely driven by Ivorian banks serving as intermediaries for international investors seeking access to the WAEMU bond market. These banks now account for 42 percent of purchases of Senegalese government securities, a level S&P described as unprecedented within the Union.

The rating agency downgraded Senegal's foreign currency rating because its debt burden has been revised to 119 percent of GDP, its financing needs are at record levels, and there is rising uncertainty over negotiations with the International Monetary Fund. Senegal is now heavily dependent on the regional market, where rates exceed 7 percent, and must refinance the equivalent of 29 percent of its GDP in 2026, including 2.6 trillion XOF in external debt.

S&P considers that financing conditions could deteriorate further without a swift agreement with the IMF, especially since Prime Minister Ousmane Sonko has stated clearly that no debt restructuring is envisaged.

Despite regional pressures, S&P assessed that the contagion risk for Côte d'Ivoire remains limited. The agency emphasized that only 2 percent of Ivorian securities are held by non-resident investors, a figure that contrasts significantly with Senegal's far greater dependence on external investors.

Ivorian banks are viewed as stronger and better capitalized than the regional average, with liquidity levels that support domestic demand for government bonds. Their solvency ratio reached 16.3 percent in June 2025, which is well above the WAEMU minimum requirement. The Ivorian market continues to be driven by domestic investors and benefits from the monetary framework of the BCEAO and the CFA franc’s peg to the euro.

Proactive Debt Management and Growth Outlook

S&P also highlighted the government's proactive debt management strategy. Since 2024, Côte d'Ivoire has carried out several innovative operations, including the issuance of the first Africa-issued sustainable bond guaranteed by the World Bank, a sustainable Samurai bond backed by the Japan Bank for International Cooperation, the first CFA franc-denominated bond issued on an international market, and a significant Eurobond buyback. According to S&P, these operations, combined with continued access to concessional financing, have helped contain the rise in debt servicing costs.

The stable outlook reflects S&P's confidence in Côte d'Ivoire’s economic prospects, in the continuity of economic policy following the re-election of President Alassane Ouattara, and in the strong momentum of the cocoa, gold, and hydrocarbon sectors. S&P projects average growth of 6.5 percent between 2025 and 2028, driven by expanded port and road capacity, the industrialization of the agricultural sector, and the ramp-up of the Baleine and Calao oil projects.

S&P cautioned that Côte d'Ivoire remains exposed to domestic political risks related to President Ouattara's succession as well as to regional risks, particularly if Senegal's situation deteriorates further. A sustained loss of confidence in Senegal's creditworthiness could increase liquidity pressures across the WAEMU zone and indirectly affect the balance sheets of Ivorian banks.

For now, the agency maintains that Côte d'Ivoire's fundamentals, including sustained growth, preferential access to international donors, and a deep domestic investor base, are strong enough to keep the rating stable. However, S&P described Senegal's situation as an emerging risk for the Union and said it will remain a central point of vigilance in the coming months.

Fiacre E. Kakpo