When a government borrows money from an international organization such as the IMF in the name of national welfare, but fails to use it for the people’s well-being, the burden ultimately falls on citizens through higher taxes and rising inflation.
In September 2026, Senegal made a staff-level agreement with the IMF for a $2.2 billion, three-year financing program. This money is meant to improve the country’s condition by fixing its broken finances and debt sustainability after a scandal of incorrect representation of debt that ruined the country’s credibility. But the people for whom they made the agreement are ultimately the ones who will pay for it by paying higher taxes.
The agreement is not final. It still needs approval from the IMF Executive Board. Senegal must take “decisive corrective actions” related to past misreporting of debt data and secure financing assurances from creditors.
Senegal has been borrowing money from the IMF since 1979. It has followed the same path for decades: to take a loan and then adjust accordingly. Things were going well until 2010, and then everything dropped after 2024.
When Bassirou Diomaye became president, his government looked at the performance of the last government, and what they found was shocking. Billions of dollars were hidden in loans, and nobody was aware of that, not creditors and not its citizens. Senegal’s debt went from a reported 74% of GDP to 132%. Almost a quarter of government money went into interest on debt. Senegal’s international bonds dropped to half their value after that scandal. Investors feared losses.
When a government makes such a huge mistake in secret, they don’t take responsibility for fixing it; instead, they split the burden. They cut government spending on people and raise taxes.
The IMF reforms are simple: collect more taxes, spend less, and open the economy. Senegal will widen the tax base in 2027, which means more people will pay taxes, and people already paying taxes will pay more taxes. The government will cut spending and end energy subsidies. These subsidies cost Senegal nearly 1,800 billion CFA francs over three years.
They also have some positive sides, like they will make business easier by simplifying laws and making access to banks and credit easier. They will try to help poorer people. The safety net budget will increase from 70 billion CFA francs in 2026 to 140 billion in 2027. The goal is to help 1 million poor households, which is around 7.8 million people.
It may look fair, but it totally depends on how it is done. The IMF promises to “restore debt sustainability.” It promises to “protect vulnerable households.” But when governments cut spending and raise taxes, the pain is not shared equally. When governments borrow money in the people’s name, the people rarely see the benefit. They see the bill. They see higher taxes. They see higher prices. They see a life that gets harder, not easier. It made life smaller, not bigger. That is the opposite of economic freedom.
Countries like Pakistan and Zambia show the same story. In Pakistan, the IMF demanded higher taxes and fewer subsidies. Poverty climbed to 28.9%, and nearly 70 million people now live below the poverty line. In Zambia, the IMF required VAT hikes and fuel price increases. Inflation rose sharply, and rural households — only 14% of whom have electricity — bore the brunt of the subsidy cuts. The money is borrowed in the people’s name, but the people pay the price.
The IMF program provides a plan. The agreement is a step forward. But what happens next will decide everything. Is this a real turning point? The government borrowed billions in the people’s name. Will the people ever see the benefit? Or just the bill? That is the only question that matters.