- Regional investors show strong demand despite fiscal overhaul
- Total 2025 issuance hits $2.26bn as Dakar navigates debt constraints
Dakar, Senegal – Senegal has raised 225.5 billion CFA francs ($403 million) on the regional debt market, surpassing its 205 billion CFA francs ($367 million) target, the Ministry of Finance said Monday.
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The auction attracted 264.3 billion CFA francs ($472 million) in subscriptions, delivering a coverage rate of 128.93% and an absorption rate of 85.32%.
Officials called it “another demonstration of dynamism in the regional government securities market in the midst of the revision of Senegal’s financial laws”.
Local demand leads the charge
Investors from Côte d’Ivoire and Senegal accounted for 95% of successful bids, contributing 126.1 billion CFA francs ($227 million) and 88.4 billion CFA francs ($158 million) respectively.
“Amid the public debt crisis Senegal is currently facing, the regional securities market seems to be the safest place to go for fresh loans. And this operation proves Senegal still have investors who see things differently despite all the unpalatable reports on the country’s financial situation,” says Idrissa Konaté, researcher and chief project director at the National School of Applied Economics of Cheikh Anta Diop University.
A Barclays report released Monday estimated Senegal’s public debt at 119% of GDP in 2024, up from 99.7% in 2023. The assessment triggered a sharp market reaction, with Senegal’s dollar bonds plunging by as much as 3.81 cents to 64.69 cents on the dollar.
“The scariest part of that report says it could take Senegal close to a decade to bring its debt burden back below the 100% mark. Moreover, the government keeps borrowing, with interest payments soaring and budget deficit widening. Where are we going with all this?
“However, some investors still have faith in the country, as they believe Senegal will eventually overcome this crisis. You have to be close to the situation to have such confidence and that is why investors from Côte d’Ivoire and Senegal dominated this bond issue, in my humble opinion.
“But if you take a closer look at the operation, investors tend to ignore the long-term offers. What does that mean? Are they afraid of the future? Do they have a bleak outlook of the country’s financial performance?” Konaté says.
Yields edge higher
Weighted average yields climbed slightly, reaching 7.21% for the 364-day BAT (up from 6.75%) and 7.53% for the 3-year OAT (up from 7.44%). The increase “reflects the persistence of a restrictive monetary policy and a risk premium that investors continue to demand”, the ministry said.
Since January, Senegal has raised 1,262 billion CFA francs ($2.26 billion) through regional auctions, while servicing 512 billion CFA francs ($916 million) in debt.
