Previous Quarterly Editions
Expropriation Risk: 66 67 67 67 ►Political Violence Risk:74 74 74 74 ►Terrorism Risk:80 82 82 90 ►Exchange Transfer and Trade Sanction Risk: 64 64 63 64 ►Sovereign Default Risk:83 83 83 83 ►
TREND ►
Protest intensity to date* 2022 2023 Low Low Unrest risk in 2024**Cost of living: HighAnti-austerity: Medium
*Note: Protest intensity is calculated based on ACLED. **Risk levels are calculated by WTW. Where data are missing no risk level will be displayed. For details of 'anti-austerity' calculations, see the essays in the introduction; for details of 'cost-of-living' calculations, see the previous edition of the Index.
Mali’s public debt rose to 52.5% of GDP in 2022, of which 27.3% was made up of external debt. According to the International Monetary Fund, the country’s debt-to-GDP ratio is expected to hover around 55.8% in 2023 and 55.3% in 2024, which is well below the 70% limit set by the West African Economic and Monetary Union (WAEMU). Due to increased spending on security, public wages and debt service payment, the fiscal deficit rose to almost 5% of GDP in 2022, above WAEMU’s 3% fiscal deficit limit.
The government is experiencing stricter financing conditions largely due to concerns over the country’s ongoing political turmoil and security challenges that could hinder Bamako’s ability to service its debts in a timely manner. Since the military junta took over in May 2021, the government has defaulted on its debt payment due to economic and financial sanctions imposed by the Economic Community of West African States (ECOWAS) and the Central Bank of West African States (BCEAO).
The last sanctions from January to July 2023 were imposed when the junta proposed in December 2022 an additional five-year transition period as opposed to ECOWAS’s demand for a shorter time. The sanctions were lifted after ECOWAS and the junta agreed to end the political transition with organization of the presidential elections in February 2024. The announcement of the junta in September to delay the February 2024 presidential elections could trigger the reimposition of financial sanctions if the delay is up to a year.
The military administration aims to raise 1,409 billion West African CFA francs (XOF) (US$2.27 billion) in the course of 2023 to finance the 2023 state budget and cover some of Bamako's one-off cash needs. This amount will be issued through 27 issues of public securities and 50 billion infra-annual bonds. In July 2023, the government issued XOF100 billion of regional debt to finance infrastructure spending as planned in the 2023 budget.
Stricter financing conditions under the junta will continue to increase funding costs for the military administration. Given the low subscription rates of Mali’s regional debt issuances in late 2022 and early 2023, the government is working hard to attract regional investors by providing more reassurances, including issuing sovereign guarantees, providing better interest rates, using fiscal and non-fiscal resources to pay the due dates and opening an escrow account by the Public Treasury in the books of BCEAO.
Under Mali’s military government, the risk of expropriation will remain high, especially for companies and individuals who are perceived to be anti-junta or an “instrument” of Western governments to undermine the current administration.
Given Mali’s difficult economic and financial environment, the government is likely to pile pressure on individual and corporate entities for additional payments through new or increased taxes and heavy fines. Individual and corporate entities that fail to meet government demands for additional payments are at risk of asset confiscation.
Assimi Goita is seeking to prolong his stay in power beyond the transitional period. In June 2022, he passed a new election law that allows him and other military members of the transitional government to run for political offices in upcoming elections.
The latest postponement of the February 2024 presidential elections to an unspecified date means a further delay to Mali’s return to democratic rule in March 2024 as agreed with ECOWAS. A further delay beyond the first half of 2024 could trigger protests from anti-junta elements. The uncertainty around the political transition and the heavy-handed behavior of the junta have deepened polarization in Mali — a dynamic that is a key driver behind the rise of political violence and the resumption of hostilities in the north.
In early August 2023, tensions escalated between Bamako and the Tuareg and Arab rebels, triggering renewed fighting in the north. In September, the Permanent Strategic Framework for Peace, Security and Development — an alliance of most of the Tuareg-Arab movements — announced the capture of the military camp in Bourem and two other camps in Lere in Timbuktu in the north. This renewed fighting brings to an end a cease-fire in place since 2015 following a peace agreement in Algeria’s capital.
The security situation in Mali’s northern and central regions remains dire, with jihadist groups intensifying their attacks. Mali’s complete breakdown in diplomatic relations with Western governments — as indicated by the departure in August 2022 of France’s military contingent — has also negatively affected the operations of the United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA).
In June 2023, the U.N. Security Council mandated MINUSMA to conduct a complete withdrawal from Mali by the end of December 2023, after the military administration’s repeated call for an end to the decade-long United Nations peacekeeping mission in the country. The end to the peacekeeping mission and a Western-government-backed international counterterrorism campaign in Mali will almost certainly be to the benefit of Russia and jihadist groups seeking to entrench their presence in the north.
The exchange transfer and trade sanctions risk dropped following the lifting of ECOWAS sanctions in July 2022; however, the risk will likely increase if Goita decides to prolong the transition period beyond 2024 and to run for the presidency. If so, this will result in the reimposition of sanctions by ECOWAS, as the regional bloc has made it clear that no member of the junta should run for political office during the transition.
Mali’s sovereign default risk dropped from high to elevated following ECOWAS’s lifting of the financial sanctions and trade embargo on the country. The elevated risk level is driven largely by Mali’s state of public finances and economic woes. The almost six-month sanctions led the government to default on paying its debts, as Mali was excluded from the regional financial market and denied access to the single account of the Treasury.
A reimposition of financial sanctions, which is increasingly likely given Goita’s likely intent to hold on to power, will almost certainly increase the country’s sovereign default risk.
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