Senegal: What if dissolving the National Assembly doesn't end the budget deadlock? (By Professor Amath Ndiaye)

Senegal is experiencing a worrying budgetary and financial crisis. The rejection of the 2026 supplementary budget law and the difficulties encountered with the 2027 budget raise the prospect of the National Assembly being dissolved as early as December 2nd.

This possibility raises a fundamental question: can Senegal withstand several more months without the expected funding from the IMF and without decisive progress in negotiations with its international creditors?

Elections no earlier than January 31, 2027

Article 87 of the Constitution authorizes the dissolution of the National Assembly after the first two years of its term. New elections must be held within 60 to 90 days of the publication of the dissolution decree.

In the event of a dissolution on December 2, 2026, elections could be held as early as Sunday, January 31, 2027, which is within the shortest constitutional timeframe.

We would then have to wait for the final proclamation of the results, the installation of the new Assembly and the clarification of the budgetary guidelines.

Even in this accelerated scenario, the normal resumption of the budgetary procedure could occur in February or March 2027.

Senegal would thus have lost two to three additional months, with no guarantee that the budget blockage will be resolved after the elections.

The first IMF disbursements could be postponed until May or June 2027.

On September 1, 2026, Senegal concluded a technical agreement with the IMF services for $2.2 billion, or approximately 1,243 billion FCFA, over three years.

This agreement remains subject to the approval of the IMF Executive Board, which requires, among other things, corrective measures, sufficient financing assurances and a credible recovery program.

Assuming that elections take place on January 31, 2027, that the new Assembly is installed in February and that a credible budgetary framework is quickly adopted, the first disbursements could occur, according to my central scenario, between May and June 2027.

In a more favorable scenario, they could begin as early as March or April if the technical negotiations progress sufficiently before the elections.

These estimates do not constitute an official IMF timetable. However, they show that Senegal could wait eight to nine months after the technical agreement of September 1st before receiving the first disbursements.

The risk of another parliamentary deadlock after the elections

Dissolution does not guarantee the disappearance of disagreements between the government and the National Assembly.

If the elections resulted in a majority opposed to the government's budgetary guidelines, with no possibility of compromise, the country could find itself in the same institutional deadlock after several months of transition.

This would be an economically catastrophic scenario: organizing new elections, losing several months and finding ourselves in a budgetary deadlock situation comparable to that of today.

The government could then face new difficulties in getting its budget adopted, in respecting the commitments made to the IMF and in carrying out the reforms necessary to restore public finances.

A different parliamentary majority does not necessarily mean paralysis. The key remains the ability of the institutions to agree on a credible economic program.

Negotiations with international creditors could stall.

Senegal has launched its Debt Treatment Plan (PTDS) to restore the sustainability of its public finances and reduce the debt service burden.

Negotiations with international private creditors can continue during the election period, but their outcome depends in particular on the credibility of the budget program supported by the IMF.

Eurobond holders will have to negotiate restructuring terms that may affect maturities, interest rates, and potentially the principal. Some have already expressed their opposition to capital reductions.

A prolonged delay in the IMF's approval of the program could complicate discussions and postpone debt treatment agreements.

Debt repayment deadlines will not wait for the elections

Senegal will have to continue to honor its financial obligations during this period.

An important deadline is scheduled for March 13, 2027, with the repayment of approximately 333 million euros of principal on a eurobond, plus interest.

It would occur just a few weeks after the earliest elections and before the first IMF disbursements in our central scenario.

At the same time, the state must finance wages, public services, energy subsidies and priority investments.

Access to the UEMOA regional market remains possible, but the rates demanded by investors are already particularly high.

The political calendar does not suspend either debt repayments or the state's daily financing needs.

A sovereign rating that has already been severely downgraded

On October 29, 2026, Moody's downgraded Senegal's foreign currency sovereign debt rating from Caa2 to Ca, reflecting an extremely high credit risk.

The agency anticipates significant losses for some creditors as part of the debt treatment.

A prolongation of budgetary uncertainties could accentuate investor distrust, keep eurobonds at heavily discounted prices and complicate the refinancing of the State.

The risk of default cannot therefore be ruled out, even if it is neither automatic nor inevitable.

Membership in the WAEMU is a factor of monetary stability and facilitates access to the regional market, without eliminating the risks associated with excessive debt burden.

A financial crisis that risks exacerbating social tensions

The expected economic growth for 2026 has been revised down to 2.7%, while the projected budget deficit has reached 7.6% of GDP. Energy subsidies have been reassessed at 790.3 billion FCFA.

In addition to this, there are payment arrears owed to companies, estimated at nearly 1,956 billion FCFA.

The continuation of cash flow difficulties could delay payments to businesses, weaken their operations, threaten jobs and lead to further cuts in public investment.

Workers, young people and low-income households would be particularly exposed, in a context already marked by purchasing power difficulties and social demands.

The danger is that a prolonged budgetary and financial crisis will lead to a worsening of the economic and social stagnation.

A call for political responsibility

Faced with these uncertainties and the dangers that threaten our economy, I call for greater maturity, patriotism and a sense of the nation's best interests from all our political leaders, without distinction.

Political differences are legitimate in a democracy, but they must not obscure the daily suffering of the people. Empathy for Senegalese citizens facing precarious living conditions, unemployment, and a lack of purchasing power must guide our decisions.

Senegal today needs responsibility, dialogue, and compromise. The nation's best interests must prevail over political rivalries.

Professor Amath NDIAYE, economist, FASEG-UCAD