KEY POINTS
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- Mali will repay $332 million in domestic debt by year-end.
- Political instability and conflict have contributed to Mali’s economic challenges.
- The IMF has raised concerns about Mali’s rising domestic debt levels.
Mali’s economy minister said on state television that the country will aim to reduce its mounting debt load by paying down 200 billion CFA francs ($332 million) of its domestic debt starting next week and continuing until the end of the year.
Mali to repay 200 billion CFA francs to ease debt burden
The action is viewed as a component of a larger plan to stabilise the country’s faltering economy, which has been negatively damaged by regional sanctions, political unrest, and protracted hostilities.
After coups in 2020 and 2021, a military junta is currently in charge of the West African nation, which has recently faced severe economic difficulties. The Economic Community of West African States (ECOWAS) imposed sanctions as a result of the political unrest, further taxing Mali’s financial sector. Furthermore, the country’s economic condition has deteriorated due to armed conflict with Islamist extremists in the country’s central and northern areas, making it more challenging for the government to control its debt and promote economic growth.
“We are facing increasing challenges, and this debt repayment is one of the measures we are taking to address them,” said Economy Minister Alousseni Sanou in his official television address, acknowledging these difficulties. Sanou did not, however, reveal the entire amount of Mali’s internal debt or the portion that would still be owed under this payment arrangement.
IMF warned of rising domestic debt in Mali, reaching 22.1% of GDP
International institutions like the International Monetary Fund (IMF) have been increasingly concerned about Mali’s domestic debt. The IMF warned that Mali was headed towards unmanageable debt levels in a study released last year, expressing concern at the rate of the country’s debt creation. It also emphasised that Mali’s domestic debt had increased dramatically in recent years, rising from 8.1% of GDP in 2015 to 22.1% in 2021.
According to a report by Reuters, the government is trying to manage this growing debt by repaying 200 billion CFA francs, but analysts warn that this measure might only offer short-term respite until structural changes are made. Raising money is a struggle for the nation, especially in light of the continuous political unrest and conflict.
