The new State debt strategy 2025-2027 focuses on the financial potential of the Senegalese diaspora. The National Public Debt Committee (Cndp) has developed a Medium-Term Debt Strategy for Senegal for 2025-2027. If the Committee recommends mobilizing concessional resources available from traditional donors, it indicates developing domestic financing and innovative local fundraising mechanisms as a strategic approach. It is in this context that the State of Senegal has relied on the Diaspora to raise 1,500 billion CFA on the savings market and the economy of Senegalese abroad. A Diasporabonds to stand out from “Eurobonds” as a source of diversification of debt in local currency. In other words, a bond loan as a debt instrument worthy of our country!
In the new debt financing strategy of Senegal 2025-2027, the State of Senegal is multiplying the ways and means to reverse the trend by focusing mainly on domestic financing to the tune of 59% by 2027. This is a means of mass financing through the issuance of a debt instrument whose backers are none other than the brave Senegalese emigrants. As such, the State of Senegal intends to stand out from traditional donors to find, this time, concessional resources available estimated at 41% from the Diaspora through a rigorous selection of projects to finance. In this context, the State plans to raise 1,500 billion CFA on the savings market and the economy of Senegalese nationals living abroad. This Diaspora-bond constitutes a citizen source of diversification of debt in local currency.
This new approach decreed by the National Public Debt Committee (Cndp) consists of developing domestic financing and even innovative financing. A fundraising mechanism which will be implemented through a sustained increase in the share of spending, savings and savings in local financial transactions. From these international financial flows and other money transfers, the State then seeks to make better profit from this monetary mass manipulated by the Senegalese diaspora. According to figures from a study published in February 2023, transfers from emigrants represent 46% of funding received from outside Senegal. So, around 2.7 billion dollars, or around 1645 billion FCFA. An amount which far exceeds the 1500 billion sought by the Government. And more than Official Development Assistance. (ODA).
An innovative fundraising mechanism!
As proof, almost 90% of the mass of money sent by emigrants is directed towards immediate local consumption. The remaining funds are mobilized in real estate projects if they are not lying dormant in banks. Hence the State’s vision of validly capturing this enormous mass of money through structuring and attractive projects offered to Senegalese people in the Diaspora. “It should be noted, however, that the implementation of this option already requires benchmarking and awareness-raising work as well as an in-depth study of the target’s profiles to successfully structure projects that are sufficiently attractive to capture flows. . These resources of Diaspora Bonds combined with the good absorption capacity of Senegal’s securities on the domestic market (by auction and by public call for savings), estimated at more than 1,500 billion FCFA, will allow in the medium-long term to replace the dominance of resources of external origin in the portfolio with the preeminence of debt in local currency with all the advantages in terms of reducing exposure to exchange rate risk and variable interest rate risk” underlines the Cndp
This State Debt Committee adds that “the orientation of the strategy towards the constitution of a debt dominated by the local currency does not exclude the benefit of the opportunities offered by other types of innovative financing such as financing carried towards the Environment, Social and Governance (ESG) which were tested in 2024. Senegal’s Sustainable Financing Framework Document developed in 2023 and aligned, in this area, with the principles of the International Association of Capital Markets (ICMA) and the Loan Markets Association (LMA) open up great opportunities to capture liquidity directed towards projects aimed at supporting sustainable development,” he indicates.
Geographic sources of debt to diversify!
The National Public Debt Committee emphasizes that it would be essential to carry out a broad geographic diversification of sources, by exploring areas of the Middle East and Asia which currently present immense possibilities in terms of available liquidity. “The financing method relating to Public-Private Partnership (PPP) contracts is strongly encouraged in this strategy. It will be a question of the private sector taking over from the State which has been strongly committed in recent years. The creation of the National Unit to Support Public-Private Partnerships (UNAPPP) and the establishment of texts governing PPP contracts constitute an opportunity that must be taken full advantage of. The financing plan for the year 2025 which results from this strategy gives the distribution by currency, by nature and by type of rate of the resources which will be mobilized to meet the financing need which will be released in the budget” estimates the National Committee of public debt (Cndp) in its strategic plan focusing on the savings market and the economy of Senegalese abroad to raise nearly 1,500 billion CFA. A “diasporabonds” which will undoubtedly achieve the expected results!
