The government of Mali defaulted on $31 million of bond payments on Wednesday after sanctions over delayed elections were imposed by the country’s military junta, Mali’s finance ministry and the West African debt management agency said on Wednesday.
This default adds to Mali’s troubles, which have included two coups in 2020 and a militant insurgency that has drawn foreign powers including the former colonial ruler France.
In a note to investors, the debt agency for West Africa’s monetary union zone said Mali did not repay 15.6 billion CFA francs ($26.6 million) on a bond due on Jan. 31.
“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.
Earlier, the Mali finance ministry said the country failed to meet a debt payment of 2.7 billion CFA francs due on treasury bond coupons, blaming the ECOWAS sanctions as well as those imposed by the BCEAO central bank that manages the CFA franc.
The ministry said that the deadline to pay off two sets of bonds had passed on Jan. 28 and it was unable to follow through with its obligations because of measures that have largely cut it off from regional financial markets.
“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 Jan. 28,” the ministry said, adding that Mali would pay its debts as soon as the restrictions are lifted.
ECOWAS and the UEMOA both imposed sanctions on Mali on Jan. 9 after the military junta that seized power in a coup in 2020 decided to defer elections.
Mali’s state assets have been frozen in ECOWAS member states’ commercial banks and non-essential financial transactions with Mali have been suspended.
The UEMOA, which has eight members, including Mali, imposed sanctions, asking all financial institutions under its umbrella to stop doing business with Mali immediately.
The junta took power in August 2020, and then staged a second coup last May against a transitional government. They announced they would hold elections in February this year, only to postpone them and propose staying in power until 2025.
France, which is leading a military operation against Mali’s Islamist insurgency, has been infuriated by the delay. It expelled the French ambassador on Monday after being criticized by Paris that it was “out of control.”
There seemed to be a surge in domestic support for the junta after the sanctions were announced. A government-organized demonstration denounced ECOWAS and France was attended by tens of thousands of people.
Analysts warn, however, that the rebound might be temporary as the sanctions ripple through the economy.
According to William Linder, director of risk consultants 14 North, the sanctions are already impacting prices, with salt, cooking oil, bananas and potatoes all rising. Normally, these products are imported from the Ivory Coast or Senegal.