• Unpaid domestic debts hit CFA363 billion by end of 2024, or 2.6% of GDP.

• 80% of arrears affect private firms, especially small and mid-sized businesses.

• Government vows zero new arrears in 2025 under IMF-backed program.

Mali has promised to stop accumulating new domestic arrears in 2025. The pledge comes under its current program with the International Monetary Fund, as unpaid debts to suppliers and public firms reached CFA363 billion (about $614.7 million) by the end of 2024. That is roughly 2.6% of the country’s GDP.

These payment delays mostly affect local businesses that provided goods or services to the government but were not paid on time. IMF data shows that nearly 80% of the arrears concern the private sector, putting financial pressure on many small and medium-sized enterprises.

The remaining 20% is owed to public entities, especially in key areas like energy and infrastructure. For Malian authorities, the issue is now urgent. The late payments are causing a chain reaction, reaching beyond vendors and suppliers. Many affected businesses also owe money to local banks, and the delays in state payments are hurting their ability to repay those loans.

This risk could spill into the banking sector, which is already heavily exposed, around 25% of its assets are tied to the public sector.

To address the issue, the government is rolling out several measures. These include better tracking of state cash flow, streamlining public bank accounts, and fully activating the Treasury’s single account system. These steps are aimed at tightening control over financial flows and avoiding off-budget payments.

Bamako has also committed to a strict ceiling of zero new arrears for 2025, one of the benchmarks closely watched by the IMF.

Still, the path to fiscal recovery will be tough. Mali faces limited access to foreign aid and rising borrowing costs on the regional market. Bond yields now often exceed 9% or even 10%.

If the no-arrears pledge is met, it could boost confidence among creditors and help improve how the government’s financial management is viewed. But success will depend on tight budget discipline and real structural reforms, at a time when the country is still grappling with serious security and political challenges.

Fiacre E. Kakpo