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Senegal’s fuel subsidy expenditures could overrun its 2026 budget allocation by up to 1.15 trillion CFA francs ($2 billion) if global oil prices climb to $115 per barrel, Finance Minister Cheikh Diba announced on Friday.
The alarming fiscal projection intensifies the financial strain on the nation’s $40 billion economy, which has faced severe turbulence since 2024 after the current administration uncovered up to $13 billion in previously unreported state debts.
This discovery led the International Monetary Fund (IMF) to freeze its financial support, locking Senegal out of international bond markets and forcing a heavy reliance on regional loans and domestic tax revenues.
To address the brewing crisis, Minister Diba informed parliament that Senegal plans to restart formal negotiations with the IMF for a new financial rescue package during the week of June 8 to finalise core terms by the end of the month.
The primary roadblock remains how to handle the country’s massive debt burden.
President Bassirou Diomaye Faye has reportedly pitched an undisclosed alternative strategy directly to IMF Managing Director Kristalina Georgieva, which the administration claims will be cheaper and more effective than traditional restructuring.
Following the announcement, Senegal’s international dollar bonds saw a modest boost, reaching their highest trading levels since mid-May.
The sudden budget deficit was triggered by geopolitical conflicts in the Middle East earlier this year, which shattered Senegal’s initial calculation of 250 billion CFA francs for annual fuel subsidies.
Prime Minister Ousmane Sonko stated that the government now requires an additional 1 trillion CFA francs or more—equivalent to an entire fifth of the national budget—to cover the gap.
While the Finance Ministry requested a domestic fuel price hike to mitigate the shortfall, Prime Minister Sonko rejected the proposal, maintaining that the administration will exhaust all options to shield ordinary citizens from rising energy costs.
