• The U.S. wants Senegal’s debt restructuring completed transparently and in under a year, using the G20 Common Framework as a test case.
  • Senegal is negotiating with four creditor committees while seeking a $2.2 billion IMF program, but an audit of hidden liabilities may delay approval.
  • The Global Sovereign Debt Roundtable met in Bangkok and discussed expanding membership, though no new countries were named.

A Test Case for the Common Framework

U.S. Treasury Under Secretary for International Affairs Erin Browne said the G20 made progress on modernizing the financial system and improving debt restructuring for financially distressed countries, as the U.S. pushes for Senegal’s debt treatment to be completed transparently and in less than one year. The comments came after the Global Sovereign Debt Roundtable met in Bangkok on October 14, where co-chairs IMF Managing Director Kristalina Georgieva, World Bank President Ajay Banga and Browne released their seventh progress report.

Senegal’s restructuring has become a proving ground for the G20’s Common Framework, which was launched in 2020 but has been criticized for lengthy negotiations, notably in Zambia and Ghana. “Senegal is a test of the restructuring ‘playbook’ developed through the roundtable,” Georgieva said, expressing optimism but declining to announce a completion date. The debt treatment remains a negotiation between Senegal and its creditors.

Parallel Committees and a Tight Timetable

Senegal is seeking to accelerate talks through four parallel creditor committees covering bilateral lenders, bondholders, commercial banks and regional development institutions. A Senegalese government source cited a possible six-to-nine-month agreement, according to Reuters, though that estimate was not publicly confirmed by the Paris Club. U.S. officials want a transparent process completed in less than a year, but that remains a policy objective rather than a confirmed deadline.

A meaningful downside risk has emerged. Bloomberg reported on October 14 that an outstanding international audit of Senegal’s liabilities could make IMF Executive Board approval difficult before year-end, according to people familiar with the matter. The audit follows the 2024 discovery of previously unreported borrowing under the previous administration, which raised estimated public debt to approximately 130% of GDP, including state-owned enterprises and government-guaranteed borrowing. The revelations triggered downgrades, a bond selloff and the suspension of the previous IMF program.

Senegal is pursuing a proposed $2.2 billion IMF program alongside creditor negotiations. A staff-level agreement is not equivalent to final board approval or disbursement; creditor assurances, a debt sustainability assessment and corrective measures remain conditions. The IMF warns that elevated debt, tighter financing conditions and energy-subsidy costs are significant vulnerabilities.

Complications and Broader Implications

Nearly $1.3 billion in borrowing through total return swaps has complicated the picture. The roundtable’s latest discussions examined these derivatives, which can significantly disrupt a restructuring. Senegal also intends to exclude regional CFA franc-denominated debt from restructuring, a move that could protect regional financial stability but shift more relief burden onto other creditors. Financial for Development Lab analysis argues that protecting these claims is important to avoid regional contagion and a broader credit crunch.

The roundtable also discussed expanding its membership to include more countries, though the World Bank’s public meeting statement did not identify newly admitted countries or a finalized expansion timetable. The G-24 welcomed the Common Framework’s memorandum-of-understanding template and the roundtable’s updated restructuring playbook on October 13, describing them as tools for improving coordination and comparable creditor treatment.

Senegal does have advantages relative to some previous restructuring cases. Offshore oil and gas production, economic growth, access to regional financing and the CFA franc’s euro peg are sources of resilience, according to Reuters. Domestically, the policy agenda includes centralizing debt management, improving debt data, auditing payment arrears and strengthening budget controls.

Speed Versus Adequacy

A faster, credible settlement could demonstrate that restructuring need not mean years of financial uncertainty. But the documented debate is chiefly about speed versus adequacy. Boston University development-policy professor Kevin Gallagher argues that restructuring must be quicker, but also deliver sufficient relief and distribute losses more fairly. Restructuring lawyer Lee Buchheit warns that bilateral-creditor disputes can still drag on for years.

In the short term, the key milestones are completion of the debt audit and sustainability assessment, sufficient creditor financing assurances, IMF Board consideration, and agreement on the scope and terms of debt relief. A deal within a year remains an ambition; Senegal’s earlier hopes for near-term disbursement and creditor agreement face reported audit-related delays. Over the longer term, success would mean more than meeting a deadline: Senegal would need durable debt relief, credible public accounts and continued access to financing.

Correction: An earlier version of this article misstated the date of the Global Sovereign Debt Roundtable meeting. It was October 14, not October 15.