Previous Quarterly Editions
Expropriation Risk: 64 65 66 66 ►Political Violence Risk:74 74 74 74 ►Terrorism Risk:75 77 77 80 ►Exchange Transfer and Trade Sanction Risk: 55 64 64 64 ►Sovereign Default Risk:75 75 75 83 ▲
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Geopolitical alignmentEast 1 2 3 4 5 West
Alignment five years agoEast 1 2 3 4 5 West
Degree of contestationSettled 1 2 3 Contested
Since the second military takeover in May 2021, Mali has increasingly moved away from its traditional Western partners and allies, as the current administration seeks international legitimacy and support from Russia.
As part of this shift, the administration led by Colonel Assimi Goita, a Western-trained military officer, has upended Mali’s bilateral relations with France, the country’s former colonial power. Goita’s administration has also framed its diplomatic dispute with France as an anti-colonial struggle, and this has inflamed anti-French sentiment across Mali.
The strained diplomatic ties have led to the Goita administration rescinding Bamako’s defence cooperation agreement with France that led Paris in August to close the last French military base in Mali and to withdraw its counterterrorism troops from the country. As a sign of Bamako’s further distance from France, the government withdrew from the Western-backed Joint Force of the Group of Five for the Sahel (G5 Sahel) composed of Chad, Burkina Faso, Mauritania, and Niger, that was intended to improve security and stability in the Sahel region.
The diplomatic feuds between Paris and Bamako have spread over to include other Western partners and France’s West African allies. For instance, the Malian government branded 45 soldiers from neighbouring Cote d’Ivoire, a key ally of France, as mercenaries following their arrests in July when they arrived in Mali to provide support to the United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA).
Mali’s ongoing political turmoil has seen the current administration pivot to Russia for financial, technical, and military support. Mercenaries from the Kremlin-backed Wagner Group have almost replaced French and European forces as close partners of the Malian military government in the fight against jihadist groups in the country. The involvement of the Wagner Group has added an extra complication to the operating environment for Mali’s Western partners and allies with some governments leaving the country, while others are planning to do so.
The Swedish Armed Forces issued a statement in March 2022 announcing the withdrawal of troops from the MINUSMA when the mission’s current mandate ends in June 2023. Sweden’s foreign minister had earlier signalled that the presence of Russian mercenaries in Mali was making the presence of Swedish forces untenable.
TREND ►
Under Mali’s military-led government, the risk of expropriation will likely remain high for companies and individuals that are perceived to be anti-junta or an ‘instrument’ of Western governments, notably France, to undermine the current administration in Mali.
Given the country’s difficult economic and financial environment, Mali’s government is likely to pile pressure on individual and corporate entities for additional payments through new or increased taxes, to help the government to fund and run public services and pay salaries. Individual and corporate entities that fail to meet government demands for additional payments are at risk of asset confiscation.
The military-led government extended the initial 18-month transition period for an additional 24 months, effective from March 2022. This is a significant climb-down from the junta’s initial decision to extend the transition period for five years. As a result, the Economic Community of West African States (ECOWAS) has accepted the new transitional period and lifted the financial sanctions and trade embargo imposed on Mali in January 2022, following the government’s then five-year plan.
Even so, Mali’s political situation is polarised as political leaders remain divided between a short or protracted timetable to return the country to democratic rule. The military government is also wary of a plot of a countercoup that has led to the arrests of some individuals including senior Malian military officers.
Meanwhile, Mali’s inter-regional armed conflict and insurgency by Islamist militants are proving intractable for several reasons including deep-seated mistrust between Tuareg leaders aligned to the Al-Qaeda-affiliated Group for Supporting Islam and Muslims and the Malian government.
Since July 2014, the operations of MINUSMA have struggled to establish stability in the northern and central regions, where armed groups continue to stage attacks against civilian and military targets.
The security situation in Mali’s northern and central regions remains dire. Attacks by jihadists and armed militias as well as intercommunal violence are ongoing in these two regions, with sporadic attacks also taking place in Koulikoro in the western region and in Sikasso region, the hub of the country’s cotton industry. Mining sites located in the south are relatively protected from regular armed attacks.
Jihadist groups are intensifying and expanding attacks outside the capital. However, attacks in July targeting Mali’s strategic military base in Kati, 15 kilometres from Bamako, highlights the growing security risk in the capital.
MINUSMA forces will not be collaborating with Wagner Group’s mercenaries, raising the risk of a repeat of the antagonistic relations between Wagner and the UN mission in Central African Republic.
Furthermore, sharing of information between MINUSMA and Malian forces will be difficult, thereby limiting the operational capability of both entities in the fight against jihadists in the country.
In terms of exchange transfer and trade sanctions, the risk level in Mali has largely subsided following ECOWAS’s lifting of the financial sanctions and trade embargo on the country. The sanctions have worsened the country’s economic woes, which have been exacerbated by high energy and food prices, partly a result of the international fallout of the February 2022 Russian invasion of Ukraine.
However, risks around exchange transfer and trade sanctions will likely increase in the year ahead if the military government inn Mali fails to demonstrate genuine commitment to return the country to democratic rule.
Mali’s sovereign default risk has dropped from high to elevated level 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.
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