Senegal Rules Out Debt Restructuring, Aims for Liability Management
Senegal's Finance Minister Cheikh Diba has dismissed the possibility of a debt restructuring during a call with international investors. Instead, the government plans to pursue liability management strategies to meet its debt obligations.
According to sources privy to the meeting, Diba emphasized the government's commitment to repaying its debts and indicated that it is exploring alternative financing options. These could include issuing sukuk and securing loans from development banks.
Senegal's debt has recently come under scrutiny after an audit revealed that it was significantly higher than previously reported. The government has acknowledged this and is working with the IMF to negotiate a new financing program.
The country's dollar bonds have responded positively to the latest developments, with the 2048 note rising by 1.6 cents to 69.8 cents on the dollar. Senegal aims to reach an agreement with the IMF by June, following the suspension of a $1.8 billion program due to the investigation into its public finances.
The government also intends to implement reforms to reduce public expenditure in the energy sector and actively manage its debt. Additionally, Diba stated that the government will consider reforming energy subsidies while ensuring that the population can afford such measures.