Senegal is forecast to post real GDP growth of around 8% in 2025, fuelled by new oil and gas production, but the outlook is clouded by the revelation of billions in hidden sovereign debt, equivalent to more than 119% of GDP.
Energy sector drives optimism
The start of deep-water oil production and liquefied natural gas exports has lifted expectations for Senegal to become one of West Africa’s fastest-growing economies. Revenues from hydrocarbons are expected to bolster public finances and attract foreign investment into supporting infrastructure.
Debt scandal shakes confidence
The discovery of extensive hidden liabilities has rattled markets and prompted the IMF to freeze lending. Investor confidence has been undermined, with fears that debt servicing could crowd out essential social and economic spending. Analysts warn the scandal risks tarnishing Senegal’s reputation as a stable investment destination in the region.
Banking and fintech under pressure
Traditional banks exposed to government securities face heightened risk, while lenders are tightening credit conditions amid fiscal uncertainty. In contrast, digital banking and mobile money platforms continue to expand, providing critical access to finance for households and small businesses. Their agility and independence from sovereign debt dynamics make them more resilient in the current climate.
Outlook
Senegal’s oil-driven growth potential remains significant, but fiscal mismanagement could jeopardise long-term gains. Effective debt restructuring and stronger governance will be essential. Meanwhile, digital finance is emerging as a parallel engine of resilience, keeping liquidity flowing even as traditional markets falter.
REFH – Newshub, 26 August 2025
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