FIXING THE WATCHDOGS FOUR REFORMS TO PREVENT THE NEXT HIDDEN DEBT CRISIS

Dr. Souleymane Bah –

Senegal’s US$13.3 billion hidden debt (approximately 8.1 trillion CFA francs, or 25% of GDP) accumulated over five years under active IMF surveillance without detection.

Responsibility is shared: Senegalese officials who falsified records; the BCEAO (Central Bank of West African States), which did not reconcile the CFA franc-denominated bank debt;, and the IMF and World Bank, whose surveillance architecture could not recognize what their own data were showing.

Most of the hidden debt consists of CFA franc-denominated bank loans, not Eurobonds. The
Debt Sustainability Framework (DSF) was never designed to track domestic bank debt or
derivative exposures.

Four reforms are proposed: three for prevention (mandatory automated reconciliation,
statistical anomaly screening, shared accountability for surveillance failure) and one for
remediation (operationalizing the odious debt doctrine for the population already harmed).

These reforms draw on existing tools: the World Bank’s reconciliation platform (piloted in
Indonesia), standard corporate risk management practices, and the Global Sovereign Debt
Roundtable’s own recommendations.

This Policy brief is part of the editorial series published during the Experts meeting and International Conference organized by IDAN on Senegal’s debt Crisis (11 to 13 May,Dakar,Senegal).