The new government, led by President Bassirou Diomaye Faye and Prime Minister Ousmane Sonko, insists on rejecting the restructuring that the Fund considers a prerequisite for providing any financial support. Sonko believes that reducing spending will harm the economy and limit growth, and affirms that “mobilizing revenues is better than submitting to painful restructuring.”
This rejection has had a direct impact on financial markets, with the value of Senegalese bonds falling and the cost of default insurance rising, leading to a decline in investor confidence. In contrast, the Fund continues to push for an adjustment in the course of fiscal policy.
Dakar has already begun taking measures to increase taxes and reduce government spending, but these measures remain limited compared to the size of the crisis. The power equation between the President and the Prime Minister also complicates the situation, especially since Sonko is seen as the most influential figure.
Under this tension, Senegal seems stuck between the demands of the Fund and the pressures of the street, amid fears that the growing deficit and debt will turn into a deeper crisis if a solution is not reached soon.
