The Finance Ministry and the West African Debt Management Agency of Mali has disclosed that Mali has defaulted on more than US$31 million of bond payments. It however, blamed the sanctions imposed on the country by the Economic Community of West African Countries (ECOWAS) over delay of elections by the country’s military junta.

Mali failed to repay 15.6 billion CFA francs (US$26.6 million) in relation to a treasury bond that matured on 31 January, the debt agency of West Africa’s monetary union zone said in a note to investors.

“It is notable that this payment incident occurs in a context where the state of Mali is subject to sanctions,” the note from UMOA-Titres said.

Mali’s finance ministry earlier said that the country had failed to meet a debt payment of 2.7 billion CFA francs (US$4.7 million) on Treasury bond coupons, blaming the ECOWAS sanctions and those imposed by the BCEAO central bank that administers the CFA franc.

The ministry averred that the deadline to meet the coupon payments on two sets of bonds passed on January with the Finance Ministry being unable to comply with its coupon payment obligations because of measures that have largely cut it off from regional financial markets.

The ministry said, adding that Mali would pay its debts as soon as the restrictions are lifted. “Because of these restrictions and despite having sufficient reserves in its treasury, the Central Bank did not proceed to meet the bond repayment scheduled for 28 January.”

The defaults add to the mounting troubles for Mali, which has experienced two coups since August 2020 and has struggled for years to stem an Islamist insurgency that has drawn in foreign powers including former colonial ruler France.

Sanctions Bite Hard

The 15-member ECOWAS economic bloc and the Union Economique et Monétaire Ouest Africaine (UEMOA) regional monetary union both imposed sanctions on Mali on January 9, after the military junta that first seized power in a 2020 coup and decided to delay a national election.

ECOWAS has frozen Malian state assets in its member states’ commercial banks and suspended non-essential financial transactions with Mali.

The UEMOA, which has eight member countries including Mali, also imposed sanctions, instructing all financial institutions under its umbrella to suspend Mali with immediate effect.

The junta took power in August 2020, then staged a second coup last year May, 2021, against a transitional government that had been put in place. It indicated it would organise elections in February this year 2022, only to delay them and propose staying in power until 2025.

The delay infuriated allies including France, which has led an international military mission to fight the Islamist insurgency in Mali. Stung by criticism from Paris that the junta was “out of control”, the junta expelled the French ambassador on Monday (31 January).

The junta appeared to receive a surge of domestic support after the sanctions were announced, as government-organized demonstrations hit ECOWAS and France.

Some analysts, however, warned that the Malian economy could soon be on its knees as the impact of the sanctions ripple through the economy.

William Linder, Head of Risk Consultants, indicated that the sanctions were already starting to hurt, with price rises for a range of items such as salt, cooking oil, bananas and potatoes. Many of these would normally be imported from Ivory Coast or Senegal.