Mali debt sale cancelled because of sanctions over election delay

PUBLISHED: Wed, 12 Jan 2022 07:20:19 GMT
Loucoumane Coulibaly and Tiemoko Diallo
Leaders from the Economic Community of West African States (ECOWAS) attend an extraordinary summit to discuss a proposal by transitional authorities in Mali to delay elections and a return of the constitutional rule in Accra, Ghana January 9, 2022. Ange Servais Mahouena/Ivory Coast Presidential Press Service/Handout via REUTERS

ABIDJAN/BAMAKO, Jan 11 (Reuters) – Mali will not be able to complete a 30 billion CFA franc ($52 million) sale of T-bills this week because of sanctions imposed by its neighbours, regional financial officials said.

West Africa’s main political bloc and its monetary union announced the sanctions on Sunday over the interim authorities’ failure to hold democratic elections next month as agreed after a 2020 military coup.

The sanctions, imposed by the Economic Community of West African States (ECOWAS) and the regional monetary union UEMOA, include the suspension of financial transactions, the closing of land and air borders and the freezing of Mali’s assets in central and commercial banks.

Mali, which raised more than $2 billion last year on the regional debt market, was scheduled to sell the T-bills on Wednesday, according to the website of Abidjan-based regional debt-planning agency UMOA-Titres.

“The Malian government will not be able to raise funds to finance its budget or finance certain important projects after the note that we received from UEMOA,” an UMOA-Titres official told Reuters on condition of anonymity. “We are not going to approve any request.”

An official with West Africa’s BCEAO central bank also said the sale would not happen and said the freezing of transfers from the BCEAO could lead to a liquidity shortage in Mali.

Mali’s government was not immediately available to comment.

The sanctions were imposed after Mali’s government proposed to extend its rule until December 2025 – nearly four years longer than originally agreed.

Interim President Assimi Goita, who led the coup against Ibrahim Boubacar Keita in August 2020, said on Monday that Mali could withstand sanctions but that he was open to negotiations with neighbours.

Malian political parties opposed to the interim government said they regretted the sanctions but placed the blame at the feet of the authorities, who they urged to “opt for the path of seeking consensus and unity”.

Western powers, led by former colonial power France, which has thousands of troop in Mali to fight jihadists linked to al Qaeda and Islamic State, have backed the sanctions.

But the transitional authorities received support on Tuesday from Russia, which has deployed soldiers to Mali. Western countries say a large number of Russian mercenaries have also arrived in Mali, a claim Mali’s government denies and Russia has not directly addressed.

“The imposition of sanctions against the already difficult circumstances faced by the country will considerably worsen the situation in the country and for the population,” Russian ambassador Vasily Nebenzya told a meeting of the U.N. Security Council.

($1 = 574.7500 CFA francs)

(Reporting by Loucoumane Coulibaly, additional reporting by Tiemoko Diallo and Daphne Psaledakis; Writing by Aaron Ross; Editing by Edward McAllister and Alison Williams)

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