Senegal’s new PM promises stability and debt relief: what it means for the economy

Senegal’s Prime Minister Ahmadou Alhaminou Lo delivered his general policy statement before the National Assembly on Tuesday, September 8, 2026, in an extraordinary session, as required by Article 55 of the Constitution. The address came just over three months after his appointment on May 25, 2026, by President Bassirou Diomaye Diakhar Faye, and the formation of his government on June 1.

Lo, a former Secretary-General of the Government and Minister of State for the Senegal 2050 Agenda, immediately signaled continuity with his predecessor, Ousmane Sonko, who is now President of the National Assembly. “Nothing changes; we will maintain the course,” Lo asserted, reaffirming the seven breaks outlined in the previous DPG and the “Senegal 2050” framework as the guiding compass. He did note that the method would evolve, centered on six principles: prioritizing, financing differently, executing, measuring, engaging in dialogue, and ensuring accountability.

In a candid assessment of public finances, the Prime Minister revealed that the consolidated public debt stood at approximately 132% of GDP at the end of 2024, equivalent to over 23,500 billion FCFA, with a deficit revised to 13.7% of GDP. In 2025, growth outside the hydrocarbon sector was only 2.2%, and the budget deficit was 6.4%. He attributed the worsening situation partly to the Iran-US-Israel war that began in February 2026, which led to five successive downgrades of Senegal’s sovereign rating by Moody’s and Standard & Poor’s.

Lo confirmed that a technical agreement was reached on September 1, 2026, with the International Monetary Fund (IMF) on a new program focused on investment and transparency. He stressed that no conditionality exceeds the commitments already made under the “Diomaye President” plan. He also outlined a Debt Treatment Plan for Senegal (PTDS), announced on September 1 and “almost finalized,” which aims to extend maturities and lower the average cost of debt with support from the IMF, the World Bank, and official creditors. Clearing arrears owed to the private sector, estimated at 1,956 billion FCFA at the end of March 2025, is an immediate priority.

The Prime Minister also announced a reform of energy subsidies, with costs to be reduced to below 1% of GDP by 2029, focusing on the most vulnerable households. He set a goal of cutting the price per kilowatt-hour of electricity by 30% by 2030. In social policy, he targeted coverage of one million poor and vulnerable households by a social safety net by 2027, with the budget doubled to 140 billion FCFA. In housing, the aim is to deliver at least 30,000 units annually to address a deficit of 500,000 homes.

On sensitive issues, Lo referenced ongoing investigations into events from February 2021 to February 2024, reviews of mining and oil contracts, land audits along the coast and state land, and the Yakaar-Teranga gas field, whose contract expires in July 2026, with the state expecting $55 million in compensation. He also highlighted the end, since July 2025, of any foreign military presence on Senegalese soil.

A series of “catalytic” projects was presented as key for the decade: development of the Yakaar-Teranga gas field, a national gas network, modernization of the refinery (SAR 2), the Kédougou mining hub, the Great Water Transfer, a new Dakar-Tambacounda-Kidira railway line, four new regional hospitals, and the Dakar Millenium Center, a 500 billion FCFA urban project in Ouakam.

Lo concluded by placing institutional, macroeconomic, and social stability at the heart of his approach, calling for shared efforts from Senegalese citizens based on fiscal responsibility, local consumption, and volunteering. “This government does not ask to be judged on its intentions, but on its efficiency and results,” he said, promising quarterly execution reviews that he will personally chair.