The IMF and World Bank have frozen nearly $70 million in financing to the West African nation over corruption allegations
BAMAKO, Nov 7 (Thomson Reuters Foundation) - Mali's opposition party is pressuring the government to make arrests in a $14 million corruption scandal over the purchase of a presidential jet and military equipment that has led international donors to suspend foreign aid.
Parena, the main opposition party, published a declaration this week calling the bribery scandal "the story of the devil, financial engineering by mafia using fake companies and tax havens to the detriment of the public treasury and Malian tax payers".
The International Monetary Fund and the World Bank have frozen nearly $70 million in financing to the West African nation until questions that were first raised in May over Mali's purchase of a $40 million presidential jet and a separate loan for military supplies were resolved.
The state prosecutor said on Oct. 22 he was looking into the charges of massive overbilling to the tune of 29 billion West African CFA francs, or around $14 million, which was detailed in a report by Mali's auditor general released late last month.
According to Christian Josz, the head of the IMF mission that visited Mali in September, IMF support will be withheld until those involved in the bribery are brought to justice. The IMF has set a December deadline for action.
The European Union also is withholding support from the government for mismanagement of its budget, forcing the country to borrow money from regional markets. Finance Minister Bouare Fily Sissoko said the scandal was putting a severe strain on Mali's economy, and its debt burden had risen by 30 percent.
Mali's President Ibrahim Boubacar Keita has made fighting corruption a priority, Sissoko said, and expressed confidence that action will be taken.
"There will be sanctions," she told journalists. "This is the opportunity to demonstrate his will to combat corruption, and no one will be above the law."
But analysts said it may prove far more difficult for Keita to proceed with arrests, given allegations that the corruption reaches deep into the country's political elite, possibly involving ministers and those close to the president.
His first prime minister Oumar Tatam Ly resigned in April, stating in a resignation letter to the president leaked to local media that he was stepping down because he could not convince the president to make government changes.
However, the scandal is leading to some change. Sidi Mohamed Kagnassy, a local businessman, resigned from his position of special adviser to President Keita.
According to the auditor general's report, a company he represents, Guo Star, sold equipment to the Malian army at inflated prices by adding fake fees worth 10 billion CFA for intermediaries, and 15 billion CFA for the company.
"Never in the world had so high a profit existed. How is such profit possible in crisis times?" the report said.
The row over the jet and the defence deals have led to criticism that the era of murky deals that shrouded the administration of former President Amadou Toumani Toure, ousted in 2012, have not come to an end.
Mali had secured more than $4 billion in donor pledges last year to rebuild after twin crises. In the first, Malian soldiers ousted the president; in the second, a mix of separatist and al Qaeda-linked rebels seized the country's desert north.
French troops scattered the Islamist fighters, and a U.N. peacekeeping mission has since been deployed, but slow progress has left Mali's current President Keita struggling to retain the popular support that swept him to power last year. (Reporting by Diarra Soumali, editing by Stella Dawson and Alisa Tang)
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