Moody's Downgrades Senegal's Credit Rating to B3, Outlook Negative

Moody's Investors Service has downgraded Senegal's long-term foreign-currency rating from B1 to B3, with a negative outlook, following revelations of significantly weaker fiscal metrics by the country's Court of Auditors. The audit indicated that Senegal's central government debt is estimated at 99.7% of GDP for 2023, approximately 25 percentage points higher than previously reported figures. This downgrade places Senegal one step above a C-level rating, highlighting the country's increased vulnerability to financial shocks. Prime Minister Ousmane Sonko labeled the audit findings as 'catastrophic,' prompting plans for spending rationalization and a new audit by April. The downgrade has led to a decline in the performance of Senegal's dollar bonds, which have been among the worst in emerging markets this month. The findings point to past governance deficiencies, complicating the government's efforts for fiscal consolidation amid elevated funding needs.