Under the pressure of economic sanctions imposed by regional body Ecowas, the military junta responsible  for overthrowing  the  Malian  government  in March,  complied  with Ecowas’ demand to restore the constitutional order. Nevertheless, the political climate in Bamako is still shaky as the junta is hesitantly ceding power. The recent interim government is made up of civilians and technocrats, but soldiers hold all key security positions. A new uprising in northern Mali by a coalition of secular Tuareg rebels and Islamist groups started in January when heavily armed Tuareg mercenaries returned from the Libyan war and seized the opportunity to pursue their 50-year-old desire for independence. Given the power vacuum created by the coup in Bamako, Tuareg rebels were able to proclaim the seceded state of ‘Azawad’.

Impact on country risk

Trade was effectively made impossible by Ecowas’ sanctions as borders were closed and access to the CFA-zone’s Central Bank was cut. The swift suspension of these sanctions restored the possibility for covering transactions. As transfer risk is mitigated through CFA membership and violence in Bamako remained limited, this has allowed matters to take a relative normal course in the South. However, the road to democratic reconstruction and future elections is long and will inevitably be chaotic. Road blocks, violence and looting in the North have made people flee the region. Even though Tuareg rebels have lost most of their influence among Islamists and criminal groups, they will probably look to obtain political gains through negotiations with the Malian government using military threat with regional support. Given the secession and degree of lawlessness, ONDD added a geographic restriction to the country policy excluding cover in the Azawad region.

Analyst: Louise Van Cauwenbergh, l.vancauwenbergh@credendogroup.com