Mali: Snapshots of the Economy Under Sanctions, and a Bit on UEMOA Politics

Mali has been under draconian sanctions since January of this year. The sanctions were imposed by the Economic Community of West African States (ECOWAS) in an attempt at pressuring Mali’s military-dominated transitional government (took power in an August 2020 coup, and reconsolidated power in a May 2021 follow-on coup) to accelerate its timeline for transitioning back to civilian rule. The sanctions include border closures and tight restrictions on financial transfers, exports, etc. Mali’s government had already defaulted on $180 million in debt servicing by March, which is beginning to have some domino effects through the suspension of some World Bank projects and other fallouts.

RFI (May 8) looks at the impact of sanctions, centering interesting comments by the Senegalese economist Pape Demba Thiam. He argues that the Malian economy will reorient rather than collapse. Thiam sees gold, the “war economy,” and the internal economy broadly as factors that are allowing (and will allow) the Malian junta to keep pressing ahead, despite early predictions that the sanctions would lead to collapse within weeks.

Speaking of the World Bank, in April 2022 they released a new “Macro Poverty Outlook” for Mali. I don’t know much about the Bank but bizarrely for a note released in April 2022, the document includes the line that “this projection assumes that the sanctions will expire by the end of March 2022.” In any case, here’s a useful excerpt (p. 2):

The extreme poverty rate is projected to stagnate at around 17.5 percent in 2022, due to the high projected population growth rate of 2.9 percent over 2021-2023. Protracted sanctions may reduce employment and incomes for the urban poor engaged in construction, transport, commerce and hospitality. Internally displaced persons and refugees will increasingly flock into Bamako when the government is ill-equipped to mitigate humanitarian crises and support the vulnerable.

The outlook is subject to multiple downside risks, the most important being regional sanctions extending beyond March, but also from intensified insecurity, further climatic shocks, food insecurity and new COVID outbreaks. It is likely that at least some of these risks will materialize and
concurrent shocks are possible. The Russia-Ukraine war presents additional risks through higher food and energy prices. The projections reflect recent sharp increases in commodity prices since January 2022, though with a high degree of uncertainty. Higher gold prices could help offset the negative impact of surging oil prices.

Jeune Afrique, meanwhile, looks at the West African Monetary and Economic Union (French acronym UEMOA) and its internal divisions regarding the sanctions regime for Mali. The UEMOA’s eight members (Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo) are all members of ECOWAS as well (also right now some members are suspended). Dynamics involving the UEMOA and Mali are now quite complex – in March (here I’m quoting Reuters), a UEMOA court “ordered suspension of the eight-nation body’s sanctions against Mali, imposed in January after the junta delayed elections…[but] it was not immediately clear whether UEMOA would follow the court decision.” Going back to the Jeune Afrique article, UEMOA leaders met yesterday (May 9) in Cote d’Ivoire’s capital Abidjan on the margins of the COP15 summit there. Jeune Afrique describes two camps. One camp favors the lifting of sanctions; so far, this camp appears to consist of Togolese President Faure Gnassingbé (recently asked by Mali’s government to act as a mediator). The other camp favors continued sanctions; key players are Niger’s President Mohamed Bazoum, Cote d’Ivoire’s President Alassane Ouattara, and Senegal’s Macky Sall. Burkina Faso, itself under military rule, is not in good standing, nor is Mali, obviously; the article says that Benin’s President Patrice Talon has not yet taken a clear stance, and the article doesn’t mention Guinea-Bissau’s position.

Even though the UEMOA meeting was yesterday, I haven’t seen any news yet about any decisions taken there – so I assume no game-changing moves have been made yet.

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