IMF Classifies Senegal's Total Return Swaps as External Debt
The IMF says Senegal's total return swap financing counts as external debt, but its treatment under the G20 Common Framework is for the government and creditors to decide.
Senegal's derivatives-based "total return swap" financing is treated as external debt, but how the instruments are handled during the country's debt restructuring will be decided by the government and its creditors, an International Monetary Fund spokesperson said.
The classification matters because the instruments are counted in the IMF's debt sustainability analysis, the Fund's key assessment of a country's borrowing position. The spokesperson said the swaps fall into the external debt category because their creditors are non-residents.
That classification, however, does not settle the scope of treatment for the instruments in the debt overhaul, which the government and its creditors will determine, the IMF said.
Senegal announced earlier this month that it would rework its debt while leaving out obligations denominated in the regional CFA franc, as it seeks a $2.2 billion financing programme with the IMF.
According to the Finance Ministry, Senegal had raised 721 billion CFA francs, or about $1.26 billion, in net financing from total return swaps as of December 2025, through transactions backed by CFA franc-denominated bonds.
Finance Minister Cheikh Diba said in March that the instruments carried a yield of around 7%, compared with 11% to 12% in Eurobond markets. Senegal joins other African sovereigns, including Angola and Nigeria, that have used total return swaps.
Senegal has said it will use an "enhanced" version of the G20's Common Framework to restructure its debt, but has released few details on how that approach would differ from the existing mechanism. Bondholders have formed an ad hoc group to engage with the government during the process.