Previous Quarterly Editions
Expropriation Risk: 66 66 66 67 ►Political Violence Risk:74 74 74 74 ►Terrorism Risk:77 77 80 82 ▲Exchange Transfer and Trade Sanction Risk: 64 64 64 64 ►Sovereign Default Risk:75 83 83 83 ►
TREND ▲
Protest intensity in 2022 and Q1 2023* 2022 Q1 2023Cost of living : Low LowAll protest: Low Low
Cost-of-living protest risk in 2023*Wage protest: MediumFood/fuel policy protests: 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 calculations, see the introductory essay.
Mali recorded economic growth of 3.9% in 2022, with lower tax revenues as the economy recovers from the aftermaths of the COVID-19 pandemic and the six-month sanctions imposed by the Economic Community of West African States (ECOWAS).
Headline inflation averaged around 7% in 2022 across the West African Economic and Monetary Union (UEMOA is the French acronym), a regional bloc of eight countries that includes Mali. To bring down inflation to below the
UEMOA’s 3% target, the bloc’s central bank – the Bank of West African States (BCEAO in French) – raised interest rates three times in 2022, with a fourth rise in March 2023. The current interest rate stands at 3%.
A spike in fuel and domestic food prices has been a key driver of inflation. Mali’s military government resorted to price control and subsidies to importers to stabilise prices. However, lower tax revenues together with the suspension of foreign budgetary supports since 2020 because of the military coup has left little room for the government to boost social spending. While the government’s restrictive fiscal policy saw the 2022 fiscal deficit drop to 4.9% as
against a forecast of 5.2 % of GDP, the austerity stoked social discontent and industrial actions in the public sector in 2022.
Last year witnessed some strike and protest actions by teachers, hospital staff, justice officials, transporters, magistrates, and staff of the foreign ministry. Transporters, for instance, protested the insecurity on the highways, while magistrates opposed the military administration’s interference in the judiciary to install pro-junta judges. Teachers and health personnel demanded improved working conditions.
In addition to the protests and strikes, an increasing number of high-profile political and civil leaders, that were once staunch supporters of the junta, fell out with Colonel Assimi Goïta, the coup leader who has tightened his grip on power. Some of these former pro-junta cheerleaders accused Goïta of wasting state resources by introducing an additional 26 seats in the transitional parliament as well as increasing the budget of his office. They have also raised alarm that Goïta is trying to engineer the political transition to ensure that he stays in office as an elected civilian leader when the presidential election is held in February 2024.
The growing social and political discontent could increase public demonstrations and industrial action in the months ahead.
TREND ►
Under Mali’s military-led government, the risk of expropriation will remain high, especially for companies and individuals 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. In March 2023, Mali’s supreme court upheld a 2021 judgement condemning Mali telecom operators Moov Africa Malitel and Orange Mali to pay CFAF176 billion to the Malian telecom consumers’ association, for allegedly billing their customers for calls that went to voicemails.
Individual and corporate entities that fail to meet government demands for additional payments are at risk of asset confiscation.
Goïta is seeking to prolong his stay in power beyond the transitional period. In June 2022, he passed a new election law allowing him and other military members of the transitional government to run for political offices in upcoming elections. If Goïta is allowed to run for office, he is almost certain to win the race by any means necessary.
The postponement of the March 19, 2023, constitutional referendum – without a new date being set – also raised concerns the territorial and legislative elections in June and November 2022, as well as the presidential elections in February 2024, could be pushed forward, further delaying the country’s return to democratic rule. However, the Goïta administration said the postponement would not affect the deadline of March 2024 to end the transition period, as agreed with ECOWAS.
The political transition is deepening polarisation in Mali, with this dynamic heightening the risk of political violence. The draft constitution has provoked protestations from Islamic leaders and pro-separatist armed Tuareg and Arab groups in the north. Islamic leaders are protesting over the principle of secularism in the draft constitution and have called on Muslims to oppose it, while the exclusion of a federation in the draft constitution – that would have given greater autonomy to the north of the country – has upset Tuareg and Arab rebels. This raises the risk of a renewed hostilities.
The withdrawal from the constitutional commission by the Coordination of Azawad Movements (CMA) – a coalition of Tuareg-Arab armed groups – indicates the breakdown in relations between the military administration and some of the pro-separatist groups. The group’s February announcement on merging the different movements comprising the CMA into a single political and military entity suggests its preparation for any eventuality. The government’s response to the CMA’s announcement, accusing the group of “collusion with terrorist groups”, underscores the growing tensions between the two parties.
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, will likely be to the benefit of Russia and jihadist groups seeking to entrench their presence in the north.
The breakdown in diplomatic relations with Western governments is also negatively affecting the operations of the United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA) with several contributing countries planning to withdraw their troops from the mission before the end of 2023. If more Western governments withdraw military personnel from Mali, this will leave MINUSMA in a precarious position or force the mission to end by June 2024, when its mandate is due for renewal.
Since the Malian government’s employment of the services of the Russian mercenary group Wagner, cases of human rights abuses linked to the Malian army have increased. The government’s refusal to allow an independent investigation of these abuses suggests the Malian army and Wagner’s mercenaries will continue to operate with impunity.
The exchange transfer and trade sanctions risk dropped following the lifting of ECOWAS sanctions in July 2022. However, the risk will likely increase if Goïta decides to run for the presidency in February 2024, resulting in the re-imposition 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 re-imposition of financial sanctions, which is increasingly likely given Goïta’s likely intent to hold on to power, will almost certainly increase the country’s sovereign default risk.
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