Senegal faces a critical juncture in its debt crisis, with a looming Eurobond amortization in March 2026 and limited options for avoiding a potential default, according to a recent policy note by Abdoulaye Ndiaye of NYU Stern School of Business and Martin Kessler of Finance for Development Lab.
The country’s public debt has reached an estimated 132% of GDP, making a sustainable repayment path increasingly difficult. Ndiaye and Kessler argue that attempting to repay at all costs, without substantial financial assistance, could ultimately prove more damaging than pursuing a debt restructuring. This assessment, published by Project Syndicate on February 23, 2026, underscores the severity of the situation as Senegal navigates a complex financial landscape.
The analysis identifies two primary paths forward: attempting to refinance the debt on a large scale while implementing stringent fiscal policies, or pursuing an IMF-supported restructuring under the Common Framework. The first option, avoiding restructuring, is described as a “narrow corridor” requiring both significant fiscal consolidation and the securing of unusually favorable refinancing terms – conditions the authors suggest may be politically unsustainable. Delays in addressing the issue are particularly costly, given the concentrated schedule of external payments beginning with the Eurobond amortization.
The report highlights the risk of increasing reliance on short-term maturities and collateralized structures, which could tighten the relationship between the sovereign and the banking sector and potentially shift the problem onto the regional balance sheet. Achieving the necessary fiscal consolidation to meet sustainability criteria is described as “very hard” to achieve.
Investors are already preparing for potential negotiations, with visits to Senegal scheduled ahead of the March bond payment, according to REDD Intelligence. Discussions are reportedly taking place with lenders in London, Paris, Washington, and Beijing, as Senegal’s leaders weigh the possibility of default. A recent audit by the Cour des Comptes du Sénégal, covering the period from 2019 to March 2024, is also informing the debate, though its findings have not been publicly detailed in full.
The Finance for Development Lab published a policy note on January 19, 2026, outlining a strategic compass for navigating the debt crisis. Further analysis, including a forthcoming paper on hidden debt revelation and optimal default (co-authored by Louphou Coulibaly), is currently under preparation for the Oxford Review of Economic Policy. As of February 24, 2026, no official statement has been released regarding Senegal’s intended course of action.