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This decision, announced on July 14, comes in the context of a growing debt burden and adds to a series of warnings already issued by other rating agencies.
The American credit rating agency Standard and Poor’s downgraded Senegal’s rating to B minus recently, triggering a negative outlook from the agency. Senegal’s new rating comes as the country faces a debt crisis that S&P said could “intensify funding pressures on the government”.This decision, announced on July 14, comes in the context of a growing debt burden and adds to a series of warnings already issued by other rating agencies.
The agency estimated Dakar’s debt-to-GDP ratio for last year at 118%, up from its previous forecast of 104%. In February, Moody’s, another American agency, already downgraded Senegal’s rating from B1 to B3, also accompanied by a negative outlook. Dakar has put forward a plan to reduce the budget deficit by 3%, by 2027, a challenging task.
Investing.com — S&P Global downgraded Senegal’s sovereign credit rating to B- on Monday and placed it on a negative outlook, signalling potential further downgrades due to concerns about the country’s rising debt levels. The rating agency revised its estimate of Senegal’s debt-to-GDP ratio for last year to 118%, up from its previous forecast of 104%, following an audit that prompted the country to increase its reported debt figures.
S&P explained that the negative outlook reflects worries that the higher debt figure, combined with larger-than-expected financing needs this year and substantial debt payments due next year, will “intensify funding pressures on the government.”
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The rating agency also noted that Senegal’s external financing requirements are significantly higher than previously estimated, which could complicate the country’s negotiations for a new program with the International Monetary Fund.