In recent days, two international agencies, S&P and Moody's, have lowered Senegal's sovereign rating, going from "B+" to "B" and from "B1" to "B3" respectively, with so-called "negative" outlooks. These announcements have caused a lot of noise, and you may be wondering: what does this mean for our country? Is it as serious as they say? Explanations to better understand.

What is a sovereign rating?

A sovereign rating is like an assessment of a country's ability to repay its debts. Agencies like S&P or Moody's act a bit like teachers giving a grade to a student. The lower the grade, the more they believe there is a risk that the country will have difficulty paying what it owes. In February 2025, these agencies revised their calculations after seeing that Senegal's debt is higher than expected: around 100% of our GDP (Gross Domestic Product, i.e. everything the country produces in a year), compared to 65% previously announced. The budget deficit - the difference between what the State spends and what it earns - is also higher: 10 to 12% of GDP, compared to 5% previously.

Why this degradation?

This new rating comes from an audit conducted in 2024 by the government of President Bassirou Diomaye Faye and the Court of Auditors. They discovered that the figures for past years, under the old regime, were inaccurate. Debt and deficits were underestimated, and loans were made outside the normal rules. These revelations surprised international markets, which lend money to Senegal. As a result, the agencies lost some confidence in our ability to manage our finances, hence the downgrade. What are the concrete consequences for Senegal?

Borrowing costs more

When the rating goes down, lenders (banks, foreign investors) consider that there are more risks in giving us money. To protect themselves, they increase interest rates. With an already high debt, this complicates the life of the State to finance projects such as schools, roads or hospitals.

Less investor confidence

A lower rating may make those who want to invest in Senegal hesitate. They could turn to other countries considered "safer". However, our country remains attractive thanks to Sangomar oil and gold, which promise strong growth (10% in 2025 according to S&P).

Pressure on the budget

The state must repay large loans, such as Eurobonds, in 2025-2026. With higher interest rates, more money will have to be found, which could reduce what is spent on the Senegalese or increase taxes. Two hypotheses that could displease the population.

Is it really that bad?

Not necessarily. Yes, it is a warning sign, but it is not the end of the world. Senegal is not alone in this situation: many countries have high debts. S&P and Moody's themselves say that there is hope. Oil and gold can boost our economy, and if the government acts quickly – “by controlling spending, increasing revenues without suffocating citizens, and regaining the confidence of lenders” – the situation can stabilize.