Debt restructuring is not the best solution to Senegal's current financial difficulties. This is the opinion of Mor Thiam, a researcher specializing in public finance and debt.

Invited to the "Seneweb Eco" program this Sunday, July 5, Mr. Thiam explained why he prefers other options.

According to a lecturer at the University of Poitiers in France, several reasons argue against restructuring. The first is political. He believes it entails a loss of sovereignty. "Politically, when you decide to restructure, you lose part of your sovereignty. You abandon your political program and you may be subject to more or less drastic conditions," he emphasizes.

He also highlights a legal risk. "When you decide to restructure, you have to negotiate."

Creditors who have lent money also pursue their own interests. The cases of Zambia or Ghana have shown innovative, but punitive clauses,” he explains, citing Zambia as an example where, according to him, “they had a clause indexed to the macroeconomic conditions of the State,” a provision that can significantly increase debt service.

Another difficulty: the very complexity of a restructuring. "You have very fragmented creditors. You have to bring them together, but it's very difficult and it takes time. During all this time, you are in an unstable situation because you no longer have access to the markets until the restructuring is completed," he warns.

According to the academic, Senegal's situation is not a problem of debt sustainability. "From a budgetary standpoint, there is no problem with the sustainability of Senegal's public debt," he maintains, before clarifying that "Senegal's problem lies more in the three-year repayment deadlines that cover roughly 2026 to 2028."

He believes that other solutions could have been preferred. "The IMF, that is to say refinancing this debt through concessional loans, would make it possible to smooth out these eurobonds that are coming to maturity and to refinance this debt again with much lower rates," he says.

Furthermore, Mor Thiam questions the lack of intervention from the Central Bank. "Why didn't the Central Bank intervene in the case of Senegal?" he asks, before adding that "these institutions should serve the States, but not necessarily other international institutions."