Financing Senegal: Reflections on Mobilising Public Assets After Moody’s Rating Action

Moody’s downgrade of Senegal’s sovereign rating has fuelled debate over how development should be financed. On 28 August 2026, the agency lowered the rating from Caa1 to Caa2, with a negative outlook, according to the reported information. The decision points to risks related to debt, refinancing and covering future financing needs.

The country’s gross financing needs are estimated at around 25% of GDP in 2026. Since the start of the year, the government is reported to have already raised an amount equivalent to around 8% of GDP on the regional market.

Reducing reliance on new borrowing

The analysis highlighted questions a model under which infrastructure, deficits and budgetary needs have largely been financed through debt. This mechanism is presented as more vulnerable when growth slows, debt rises and the cost of capital increases.

The proposed approach is to increase the country’s ability to generate capital from its own resources. Senegal has public shareholdings, companies, infrastructure, concessions, land, natural resources and financial institutions. Its young population, diaspora, private sector and geographical position are also cited as potential strengths.

The IMF’s limited but useful role

The International Monetary Fund can contribute to macroeconomic stabilisation, restoring a sustainable fiscal path and strengthening governance. But, according to this analysis, it can neither single-handedly define Senegal’s development model nor provide on its own the long-term capital needed for investment.

The challenge, therefore, would be to better assess and manage available assets in order to mobilise more resources. Options mentioned include increasing the value of public shareholdings, attracting institutional investors, public-private partnerships, mobilising national savings and increasing diaspora participation.

National fund or strengthening FONSIS

Two options are put forward: creating a National Investment Fund with professional and independent governance, or strengthening the Sovereign Fund for Strategic Investments, FONSIS. The latter already exists and its work is praised by many specialists, according to the source.

In both cases, the stated goal would be to turn public assets into productive capital, facilitate access to capital markets and prioritise financing investment rather than current expenditure.