DAKAR, May 22 (Reuters) - Senegal President Bassirou Diomaye Faye on Friday dismissed Prime Minister Ousmane Sonko and dissolved the government, a move that risks deepening uncertainty in a ‌country already grappling with a debt crisis and drawn-out talks with the International Monetary Fund.

A statement read on state media said all ministers were dismissed, with the outgoing government tasked with handling day-to-day affairs, according to Oumar Samba Ba, secretary-general of the presidency.

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The decision follows months of growing tensions between the two allies-turned-rivals. Sonko, a charismatic figure with a strong youth following, had backed Faye in the 2024 election after being barred from running himself due to a defamation conviction.

In a post on social media after the announcement, Sonko said: “Tonight I will sleep with a ⁠light heart in the Keur Gorgui neighbourhood,” referring to his residence.

The split comes as Senegal faces mounting economic pressure. The International Monetary Fund froze its $1.8 billion lending program with Senegal following the discovery of misreported debt, pushing the country's end-2024 debt level to 132% of its economic output.

Faye’s move raises the risk of further delays in reaching a new agreement with the IMF, seen as key to reviving the economy.

Earlier on Friday, before Sonko’s dismissal, Finance Minister Cheikh Diba told parliament Senegal expects to resume talks with the IMF in the week of June 8 and hopes to reach agreement on key points by June 30.

Diba also warned the country’s fuel subsidy bill could exceed its 2026 budget allocation by as much as 1.15 trillion CFA francs ($2 billion) if oil prices rise to $115 per barrel, adding that Sonko had rejected his request to raise fuel prices.

Sonko had opposed any restructuring of ‌the debt, ⁠estimated at $13 billion, which he said the IMF was advocating, while Faye has been less vocal on the issue.

SPECULATION OVER SONKO'S POLITICAL FUTURE

Sonko was a popular opposition leader under the previous administration of President Macky Sall, whose decision to delay the 2024 election spurred unrest.

Both Faye and Sonko are former tax officials who were jailed ahead of the 2024 election. They were released 10 days before the rescheduled contest, which Faye went on to win with 54% of the vote.

Faye then appointed ⁠Sonko as prime minister.

Now that Sonko is out of that job, it is unclear what his next steps will be.

In March, he said he would be willing to take his Pastef party out of the government and return to opposition if Faye departed from the party's agenda, fuelling speculation that the two men's power struggle was ⁠irresolvable.

Pastef dominates the National Assembly, meaning it could complicate governance and the passage of reforms needed to secure IMF support.

Last month lawmakers overwhelmingly approved electoral code changes that could pave the way for Sonko to run for president in 2029.

Among the anti-establishment, pan-Africanist prime minister's signature initiatives was an audit ⁠of Senegal's resource deals, including those governing its emerging oil and gas sector.

In March, Sonko declared a BP gas contract for the Greater Tortue Ahmeyim project unfair and revoked some 71 mining licenses.

He had argued that renegotiating oil and gas contracts would lower domestic energy prices and help rebuild Senegal's battered finances.

Reporting by Anait Miridzhanian and Diadie Ba; Editing by Bate Felix, Jessica Donati, Portia Crowe, Robbie Corey-Boulet and Sanjeev Miglani

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Anait Miridzhanian

Thomson Reuters

Based in Dakar, Anait reports on political and economic news in West and Central Africa. Previously she spent two years in Johannesburg writing market reports and editing stringers' stories. She joined Reuters in 2020 to cover European company news. Anait studied journalism at Sciences Po, Paris, and linguistics at Moscow State Linguistic University.

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