Senegal’s former prime minister Ousmane Sonko has indicated he is open to discussing a debt restructuring with the International Monetary Fund (IMF), signalling a possible breakthrough in efforts to resolve a fiscal crisis that has disrupted relations between Dakar and the lender.

The country’s parliament elected Sonko as speaker on May 26, handing the influential politician a powerful institutional platform days after former ally President Bassirou Diomaye Faye dismissed him and dissolved the cabinet.

Faye sacked Sonko following months of speculation about growing tensions within the ruling leadership over fiscal policy, debt restructuring and negotiations with the IMF. The political fallout comes as Senegal faces heightened scrutiny from investors and creditors after authorities disclosed billions of dollars in previously unreported liabilities that pushed public debt sharply higher and led the IMF to suspend a $1.8bn financing facility.

Sonko’s comments, made in an interview with Radio France International (RFI) broadcast on June 16, mark a notable shift from his previous position. While serving as prime minister, he had opposed discussions with the IMF over debt restructuring, a stance that put him at odds with President Faye.

He suggested that his position had become more flexible as Senegal seeks to restore access to international financing and rebuild confidence among investors and development partners. “We are not in a rigid position,” Sonko told RFI. “We believe there is a possibility of reaching an agreement.”

The ex-premier – who remains the undisputed leader of Pastef, the party he founded in 2014 and to which Faye also belongs – said his opposition had never been directed at restructuring, no matter the circumstances, but rather at what he viewed as an unnecessarily aggressive approach while Senegal remained current on its obligations.

“We didn’t want a drastic restructuring. I opposed it throughout my time as Prime Minister,” he told the French broadcaster. “Considering that the conditions weren’t even right, since the country wasn't in default and was managing to meet its commitments.”

Sonko argued that Senegal's economic fundamentals remained relatively strong despite the debt controversy.

“Our indicators were relatively sound, as were our growth prospects,” Sonko said, adding that he had previously believed an agreement with the IMF remained achievable without a major restructuring.

Debt crisis weighs on economy

Senegal's fiscal position came under intense scrutiny after authorities revealed in 2024 that the previous administration had accumulated approximately $7bn in previously undisclosed liabilities.

The discovery significantly altered assessments of the country's public finances, pushing government debt above 130% of GDP and triggering concerns among investors, ratings agencies and international lenders.

In response, the IMF suspended a $1.8bn support programme while seeking clarification on the scale and nature of the liabilities. The suspension has complicated Senegal's efforts to secure external financing at a time when authorities are seeking to support economic growth and manage rising debt-servicing obligations.

The hidden-debt controversy has become one of the most contentious issues in Senegalese politics. Sonko reiterated in the interview that part of the liabilities could be considered “odious debt” because they were contracted without proper parliamentary approval.

“Part of this debt is indeed an odious debt because it wasn’t even approved by the National Assembly,” he said. “The Senegalese people are now bearing the burden.”

IMF talks resume

Sonko's comments come as discussions between Senegal and the IMF are expected to resume this week, raising hopes that a compromise could be reached on measures needed to restore programme support.

The IMF has previously indicated that greater transparency over public finances and a credible fiscal adjustment strategy would be required before normal lending relations can resume.

Analysts have argued that a restructuring of some debt obligations could help place Senegal's finances on a more sustainable footing, although any agreement would likely require politically difficult fiscal reforms.

However, Sonko warned that he would oppose any arrangement that he believed undermined Senegal's longer-term economic interests.

“If a solution were to be adopted that is not in Senegal's best interest, that sacrifices our options for systemic and structural change on the altar of short-term ratios, we will not accept it,” he told RFI. “And we will use the powers of the National Assembly to say no.”

Despite his reservations, Sonko signalled that he was prepared to assess any proposal on its merits. “We can now assess developments as they unfold,” he said. “In principle, we are not here to obstruct progress.”

Balancing reform and growth amid energy boom

The debt crisis has emerged at a sensitive moment for Senegal, which is seeking to capitalise on the start of hydrocarbons production from two flagship offshore energy projects.

The Sangomar oil field, operated by Australia's Woodside Energy Group Ltd (ASX: WDS), began production in 2024 and is expected to produce around 100,000 barrels per day (bpd) at peak output. Meanwhile, the Greater Tortue Ahmeyim (GTA) liquefied natural gas project, developed by BP (LSE: BP) and Kosmos Energy (NYSE: KOS) on the maritime border with Mauritania, shipped its first LNG cargo earlier this year.

Authorities hope that hydrocarbon revenues will support economic growth and strengthen public finances over the coming years. However, economists caution that restoring fiscal credibility and rebuilding relations with international lenders will remain critical to attracting investment and maintaining macroeconomic stability.

Meanwhile, Senegal is reportedly considering international arbitration in disputes involving BP and Woodside as President Faye’s administration intensifies scrutiny of oil and gas agreements it believes may not sufficiently benefit the state.

Woodside has already filed a case against Senegal at the International Centre for Settlement of Investment Disputes after tax authorities imposed a XOF41bn ($68mn) reassessment. The Australian company argues the claim breaches fiscal guarantees granted during the project’s development phase and said several of the contested taxes should be exempt under the production-sharing agreement.

Sonko in March publicly criticised the GTA agreement as “one-sided and unfair” following an audit by consultancy Mazars into BP’s cost recovery claims. The audit reportedly found that $2.8bn of the $4.1bn in recoverable costs submitted by BP did not meet contractual requirements, while a further $1.8bn in expenses lacked sufficient documentation.

The government estimates GTA could generate $30bn-$40bn in revenue over the next 20 years, but Petrosen Holding chief executive Alioune Gueye previously said the state’s projected share may amount to only about $800mn under current terms.

Trading places: “Diomaye is Sonko”

Bassirou Diomaye Faye was sworn in as Senegal’s youngest-ever president in April 2025, just weeks after being released from prison following a political amnesty announced by outgoing President Macky Sall.

Just hours later, he named Sonko as his prime minister. Sonko – who came third in the previous presidential election in 2019 was banned from running in 2024 for a conviction that his supporters believe was politically motivated – had chosen Faye as his replacement.

The men had campaigned together under the slogan “Diomaye is Sonko,” promising to fight corruption and prioritise national economic interests. Their message proved especially popular among young voters in the West African country, where more than 60% of people are under 25 and formal employment is hard to find. Almost a third of Senegal’s youth are unemployed, according to Afrobarometer.

Faye – a now 46-year-old former tax inspector who was released from prison only 10 days before winning the polls, capturing 54.28% of the vote – has pledged to tackle corruption and use the country’s resources to raise living standards.

Sonko, who remains one of Senegal’s most influential political figures, could play a key role not only in shaping the government’s approach to negotiations with the IMF but in resolving disputes with the energy majors.

Pastef controls 130 of the 165 seats in Senegal’s single legislative chamber. While the party majority in the National Assembly can censure the government, in the event of a deadlock, President Faye could resort to “exceptional powers” to govern by decree for three months.

In such a way, the new government formed by the head of state Faye in defiance of the powerful ex-premier-turned-speaker can overcome potential efforts by lawmakers allied with his estranged ally to block its reforms.