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Bond Market News
Senegal Bets on Tax Surge to Unlock IMF Deal
January 7, 2026
Senegal signaled that a potentially strong Q1 tax collection in 2026 could materially improve its chances of securing a new program with the IMF and help avoid a debt restructuring. Minister of State Ahmadou Al Aminou Lo said that achieving at least 25% of annual tax targets in Q1 would bolster the credibility of the government’s macro framework presented to the IMF. Previously, the IMF suspended a $1.8bn facility in 2024 after the discovery of $7bn in previously undisclosed debt under the prior administration. Despite the improved tone, analysts caution that risks remain elevated — meeting the Q1 target would require tax intake of about XOF 1.35tn ($2.4bn), a 41% YoY jump, underscoring execution challenges. While Prime Minister Ousmane Sonko has ruled out a restructuring, some economists argue that fiscal projections rely on ambitious revenue gains and potentially painful spending cuts. The government forecasts total tax revenue for 2026 at XOF 5.4tn ($9.6bn) or ~23% of GDP, and that achieving these targets would drive revenue growth and strengthen debt sustainability.
Senegal’s dollar bonds extended their recent rally. For instance, its 6.25% 2033s are up by almost ~5 points since the beginning of the year and currently trades at 62.7 cents on the dollar.
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