A significant conference on the debt crisis recently took place in Dakar, though Prime Minister Ousmane Sonko, originally slated to oversee its opening, was unable to attend due to illness, as confirmed by Justice Minister Yacine Fall. In his stead, Ayib Daffé, president of the ruling Pastef parliamentary group, addressed the assembly. Daffé stressed the urgent need to “broaden perspectives” and move beyond “conventional thinking,” a clear reference to the International Monetary Fund’s (IMF) proposal for debt restructuring, which Dakar has consistently rejected.
The imperative for new debt solutions
Economists gathered at the conference unanimously asserted that Senegal’s external debt is unsustainable, directly contradicting previous government claims. They emphasized the critical need for immediate solutions. Economist Souleymane Bah highlighted the core issue, stating, “The State’s current revenues do not allow for the payment of principal and interest. What they usually do with this external debt is borrow to repay. With interest rates continuing to rise, this is not a solution at all. Other alternatives are needed.“
The primary objective of this conference, organized by the Ideas Africa Network think tank, was precisely to explore these alternative solutions, as they believe the IMF’s approach is inadequate.
Ndongo Samba Sylla, a researcher and economist with Ideas, criticized the IMF’s methodology. He explained, “Because the IMF has an approach that is opposed to economic transformation. It is a purely accounting and pro-creditor approach. The IMF will do everything to lend you money, so that you can signal that you can borrow again, that you can pay creditors, but not to invest in economic transformation.“
Among the innovative avenues discussed were reforming the monetary system, considering a departure from the Franc CFA, and advocating for the cancellation of debt deemed “illegitimate” due to its opaque contracting by the previous administration.
However, a potential contradiction emerged within the current leadership. While experts in Dakar, under the implied patronage of Prime Minister Ousmane Sonko, deliberated on solutions independent of the IMF, President Bassirou Diomaye Faye was simultaneously in Nairobi, Kenya, meeting with IMF Director Kristalina Georgieva. No significant breakthroughs from this meeting have been reported so far.
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