Mali

A Country Assessment Study was undertaken in Mali. The following is a summary of its findings.

December 2001
During the 1990s Mali witnessed rapid economic growth fuelled by a 7.5 per cent increase in exports year-on-year. Trade openness, with accession to WTO in 1995 and membership of the West African Economic and Monetary Union (WAEMU) in 2000, along with the relaxation of capital controls and in the implementation of new investment guidelines has seen increases in foreign direct investment (FDI) and macro-economic stability. However, the economy is heavily dependent on raw materials such as cotton, gold and livestock, which make up ninety per cent of all exports. It ranks 153 out of 162 in the UNDP Human Development Index and three-quarters of the population lives on less than one dollar a day. Most of the population does not enjoy access to electricity or telephones and computer ownership stands at 0.1 per cent.

Mali needs to implement export diversification policies in order to reduce its vulnerability to price fluctuations on it major products. Expansion in agricultural production must be based on an increase in productivity or diversification into rice, fruits and vegetables, with the most difficult step being the transformation of raw materials into value-added products. The existing industrial sector is also in need of expansion. The exploitation of land resources, notably gold, hides a large potential for growth. Increased production of exportable goods would lead to larger tax receipts and foreign exchange reserves, which could be used to fund poverty reduction programmes and investment. However, export-increasing policies require a parallel national strategy to accompany trade expansion. In particular, efforts should be concentrated on improving transport, the financial sector, commercial intelligence, telecommunications and workforce skills.

Mali has been actively targeting foreign investors, signing up to international investment treaties - and this effort is starting to pay off. However, investment flows are a long way below those of similar countries and gold mines take the lion s share (88 per cent), at the expense of the industrial sector. The economy represents a very small market for multinationals, with the wider WAEMU still only one-tenth the size of the Belgian economy. Investors are further deterred by low labour productivity. Priority should be given to improving education, the business climate and reinforcing investment promotion activities.

While Mali has become richer, the number of Malians below the poverty line has also increased. This inequality is fostered by gender disparities in access to productive resources, in literacy and in high birth rates.

Official employment is predicted to grow at one per cent per annum in the private and public sectors. This figure is outstripped by growth in the available workforce of 2.7 per cent. Specific programmes should focus on boosting rural infrastructure, small and medium-sized enterprises and micro-finance. Meanwhile, training should be matched to labour market requirements, with attention paid to the needs of export industries.

In conclusion, the report recommends integrating Mali further into the world economy through trade and investment, while preceding liberalization with policies aimed at preparing the economy to make the most from globalization. The creation of MALIPEX, the agency for export promotion, will help to achieve this goal. The report calls for a greater focus on poverty reduction with investment in human capital and policies to address gender disparities. There should be a move away from aid through donor-funded projects and toward partnerships with common aims and objectives. It suggests that the State intervene selectively in the economy to address private sector weaknesses, while officials working in areas linked to globalization should receive appropriate training. Institutions promoting investment and the services sector, notably tourism, should be strengthened.

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© United Nations 2001