France’s fear of a Malian safe-haven allowing for jihadism to destabilise the entire Sahel region - planning overseas attacks, causing humanitarian devastation and endangering access to Saharan natural resources (key oil, gas and uranium suppliers) – lead to the hasty January intervention. For now the French and Malian forces’ three-week ground and air offensive played out quite well, given it prevented rebels from moving south towards taking Bamako. Moreover the 10-month grip of Islamist rebel groups over the major northern towns of Gao, Timbuktu and Kidal was managed to be broken. Nevertheless, there is genuine potential of an unfolding hit-and-run war, given jihadist militants preserved as many fighters as possible by disappearing into vast empty desert spaces and crossing porous borders. Therefore an extended French military role will be needed, instead of leaving a security vacuum and a high cross-border spill-over risk to the African allies. Besides, there have been reports of retaliations against Tuareg civilians and alleged Islamists-supporters.

Impact on country risk

After most Malian budget support was suspended since the military coup early 2012, the IMF recently approved a USD 18.4 million Rapid Credit Facility loan while donors pledged USD 455.5 million in support of an international mission funding humanitarian projects, reconstruction of political infrastructure (July 2013 elections) and training the deeply weakened and unpopular Malian army. Total government control over the armed forces is vital for future political stability. However, tackling local grievances over poverty, corruption and marginalisation of nomadic Tuareg - which feeds the Islamist appeal – will be most important for a more stable Sahel region. Ever since Mali’s political turmoil escalated early 2012 with a military coup in Bamako and the concurrent loss of northern Mali to MNLA Tuareg rebels – whose revolt was hijacked by jihadists imposing sharia law - ONDD went off cover for medium-to-long term transactions while short-term policy became restrictive, excluding cover for public debtors and any debtor located in northern ‘Azawad’.

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