• Senegal’s Q1 2025 growth is estimated at 12.1%, driven by oil production, while non-oil GDP rose by only 3.1%.

• Public debt was revised to 118.8% of GDP by the end of 2024, following the discovery of hidden liabilities.

• Treasury resources of 1,215.9 billion CFA (≈$ 2.06 billion USD) were primarily used for debt service and arrears.

Senegal’s economy is estimated to have grown 12.1% year-on-year in the first quarter of 2025, according to the IMF, citing data from the national statistics agency. The expansion reflects the impact of new oil production from the Sangomar field, which started in June 2024 and rapidly boosted export volumes.

Oil shipments surged by more than 80% over the period, lifting the secondary sector by 37% and providing a significant contribution to public revenues. This growth also supported an 8% rise in investment and a 3.4% increase in consumption; however, momentum outside of hydrocarbons remained weak. Non-oil GDP expanded by only 3.1%, weighed down by construction, which has been disrupted by arrears owed to contractors, and by lower output in the chemical industry.

The country is also benefiting from the commencement of production at the Greater Tortue Ahmeyim gas project, which is being developed jointly with Mauritania. The project shipped its first cargo of liquefied natural gas in April 2025, adding a new revenue stream for the government and exporters.

The IMF estimates GDP growth will remain strong in the short term, projecting 9.7% in the second quarter of 2025, before easing to 4.5% in 2026 and 6% in 2027 as the extraordinary impact of hydrocarbons normalizes. While hydrocarbons provide an immediate boost to export earnings and fiscal receipts, the figures highlight a divergence between the energy-driven expansion and the slower performance of the domestic economy.

The growth headline comes against the backdrop of a sharp reassessment of the country’s debt profile. Following a report by the Court of Accounts in February 2025, the government commissioned an audit that uncovered significant hidden liabilities accumulated between 2019 and 2023, including unregistered loans and arrears. As a result, Senegal’s debt was revised from an officially reported 74.4% of GDP at the end of 2023 to 111%, and then to 118.8% at the end of 2024. The revision highlighted weaknesses in fiscal reporting and debt transparency, intensifying scrutiny from investors and international lenders.

In response, the government has redirected nearly all available liquidity toward servicing obligations. Treasury resources mobilized in the first half of 2025 totaled 1,215.9 billion CFA francs (US$2.06 billion), 92.7% of which came from securities issued on the UMOA-Titres regional bond market. Of these resources, 1,049.9 billion CFA francs were allocated to debt amortization and 246.7 billion to the clearance of external arrears. Broader financing flows, including project loans and other instruments, resulted in a total mobilization of 2,247.8 billion CFA francs by June. The concentration of borrowing toward debt service underscores the limited fiscal space available for new investment or social spending.

An IMF mission led by Edward Gemayel visited Dakar from August 19 to 26 to review the situation. In its statement, the mission noted that “corrective measures are needed, including centralizing debt management and creating a comprehensive database.” It also confirmed that authorities have launched an audit of domestic arrears and are working to consolidate government accounts into the Treasury single account.

Senegal has expressed its intention to request a new IMF-supported program that aligns with its Vision 2050 development framework and the Economic and Social Recovery Plan. The IMF indicated that the matter will be submitted to its Executive Board in the coming weeks and did not specify immediate repayment obligations. However, stricter conditions are expected under any future arrangement.

The second-quarter budget execution report provides further insight into the strengths and weaknesses of Senegal’s public finances. On the revenue side, collections performed relatively well, supported by hydrocarbon-related receipts and more substantial non-tax revenues, demonstrating the government's capacity to raise funds even under fiscal pressure. The report also highlights adherence to legal requirements under the Organic Finance Law and the Transparency Code, with quarterly reporting made public to inform citizens, parliament, and external partners.  

At the same time, the weaknesses are equally visible. The country remains heavily dependent on bond issuance to cover its needs, leaving it exposed to higher refinancing costs and rollover risks. The bulk of resources was directed to debt amortization and arrears clearance, leaving very little room for discretionary investment or social programs.

Payment arrears continue to disrupt economic activity, particularly in the construction sector, where delays in government payments have slowed projects and weighed on sector performance. The report also acknowledges delays in publishing earlier quarterly reports, citing the need to reclassify extrabudgetary expenditures into the state’s financial accounts. This indicates persistent challenges in budget execution, data reliability, and fiscal discipline.

Senegal’s short-term economic outlook remains closely tied to oil and gas production, but the sustainability of its fiscal position depends on restoring credibility in public finance management. The combination of strong hydrocarbon-driven growth and a heavy debt burden highlights the dual challenge facing authorities: leveraging new energy revenues to support development, while implementing reforms to improve transparency, reduce arrears, and manage debt more prudently.

Idriss Linge