(Ecofin Agency) - The country is relying on the regional market to meet its growing financing needs due to its difficulties in accessing international markets. During the first half of 2022, it was cut off from the regional financial market but, when it finally entered during the second semester, its operations were steady. This year, the country wants to keep that pace.
In 2022, Mali raised XOF785 billion (US1.3 billion) from the West African financial market to pay its outstanding debts and finance its budget deficit. Comforted by the trust investors placed in its securities last year, the country has raised the volume of funding it wants to source in the market this year.
According to information disclosed by the Malian delegation at the 5thPublic Securities Market Meetings (REMTP 2023) held from January 24 to 26 in Dakar, the country plans to raise more than XOF1,359 billion (US$2.26 billion) in the market in 2023. The amount exceeds 60% of Mali's 2023 budget estimated at XOF2,200 billion (US$3.65 billion).
Specifically, this year, the country expects XOF189 billion (US$314 million) through the issuance of treasury bills and the remaining XOF1,170 billion (US$1.9 billion) through the issuance of syndicated government bonds.
During the same period, the country is scheduled to refund XOF555 billion (US$922 million) in principal.
Last year, Mali, which returned to the regional market after over six months of being out due to sanctions raised XOF94 billion (US$156 million) through treasury bills, XOF361 billion (US$600 million) through the issuance of fungible treasury bonds and XOF330 billion (US$548 million) through syndicated government bonds.
This strong interest in the local market was somehow forced by major rating agencies downgrading the country's sovereign rating following the sanctions imposed by ECOWAS due to the political and diplomatic situation prevailing in Mali.
In September 2022, Moody's changed the country's outlook from negative to stable, the Caa2 rating was still making it hard for Bamako to access international markets, especially in a context marked by tightened access conditions. At the same time, regional rating agency Bloomfield was attributing a BBB long-term rating and an A3 short-term rating with a stable outlook (significantly better than the rating attributed by Moody's) to the country, making it easy for Mali to enter the regional market.
Let's note that despite the security crisis, Malian authorities expect growth to be around 5.1% growth this year, against 3.7% in 2022. Inflation is also expected to be around 2.5% while debt-to-GDP is forecasted to be around 55.3%.
Fiacre E. Kakpo