Since the coup in Mali, the country has already missed an appointment to issue securities on the WAEMU money market. The ongoing transition is not positive for the country's very short-term outlook.

The coup in Mali has disrupted the country's activities on the capital market of the West African Economic and Monetary Union, the Ecofin Agency has learned from market information. On August 26, 2020, an issue of equivalent Treasury bonds in the amount of 30 billion FCFA was "postponed to a later date".

The WAMU-Securities Agency, which organises the market for loans on the issue of securities in this sub-region, did not give details of the reasons for this postponement. "On behalf of the Public Treasury of Mali, the Agency thanks all investors for the constant support for the Union's development financing initiatives", simply explained the institution.

It is not certain that Mali will be on the WAEMU money market on 9 and 23 September as provided for in the country's securities issuance schedule. Uncertainty also hangs over its ability to repay CFAF 51.43 billion representing the main amounts and interest on securities loans, which mature between 1 and 26 September 2020.

This situation weighs primarily on Malian investors who hold the bulk of the public securities issued by the country on the WAEMU market (CFAF 403 billion). Burkinabe investors (CFAF 210 billion) are the second group that is closely monitoring the situation.

The perpetrators of the coup are under pressure from the Economic Community of West African States (ECOWAS), which maintains its sanctions and demands a civilian-led transition. We are waiting for the conclusions of the major national consultation on 5 and 6 September in Bamako to get an idea of the roadmap for the transition.

In a note published on August 25, Moody's judged that the current situation is negative for Mali's issuer profile. If the reduction in international trade and investment is prolonged, it will have a considerable negative economic effect on the country's economy.

"Although Mali's mining sector, which provides about 25% to 30% of government revenue and accounts for most foreign exchange earnings, continues to operate for a few months, a more prolonged interruption of trade and financial flows would hamper production," the rating agency warned.

Beyond the political and social stability that must be rebuilt, the transitional government will have to deal effectively with an economic situation that has been shaken by the coronavirus pandemic. Gross domestic product growth is expected to be less than 1% for the year 2020. It will be weighed down by a decline in economic activities, and inflation that is slow to take off.

The upcoming release of the country's interest rate curve will show how confident investors are in the country's outlook.