LEDE: On the 28th and 31st of January, the bond payment deadlines passed.
Mali’s finance ministry and the West African debt management agency said that the country has defaulted on more than $31 million in bond payments, as sanctions imposed over the country’s military junta’s postponement of elections took effect.
The defaults add to Mali’s escalating problems, which have seen two coups since August 2020 and years of fighting to quell an Islamist insurgency that has drawn in foreign countries, including former colonial ruler France.
Mali failed to repay 15.6 billion CFA francs ($26.6 million) on a government bond that matured on Jan. 31, according to a note to investors from the debt agency of West Africa’s monetary union zone.
The UMOA-Titres report noted that “this payment occurrence comes in a setting when the state of Mali is subject to sanctions.”
Mali’s finance ministry had previously stated that the government had missed a debt payment of 2.7 billion CFA francs on treasury bond coupons, citing ECOWAS restrictions as well as those imposed by the BCEAO central bank, which controls the CFA franc.
The Economic Community of West African States (ECOWAS) has frozen Malian state assets in commercial banks and stopped non-essential financial dealings with Mali.
The UEMOA, which has eight member countries, including Mali, has also implemented sanctions, urging all financial institutions under its cover to immediately suspend Mali.
The junta seized power in August 2020, then staged a second coup in May against a transitional government in place. It stated that elections will be held in February of this year, only to postpone them and propose staying in power until 2025.
However, several analysts cautioned that the uptick could be fleeting as the impact of the sanctions spreads throughout the economy.
Price increases for a variety of commodities such as salt, cooking oil, bananas, and potatoes have already begun to bite. Normally, many of these would be imported from the Ivory Coast or Senegal.
Modibo Mao Makalou is a Malian economist and former presidential economic counselor. He stated that due of the sanctions, not only will the Malian government be unable to pay the state’s debt, but it will also be unable to pay for internal operations.