Mali is a vast, landlocked country with a semi-arid climate. It is also a low-income country with an undiversified economy that is vulnerable to raw material price fluctuations. High population growth rates (Mali’s population numbered 18 million in 2016) and climate change constitute major challenges for the country’s agriculture sector and food security.
Mali has been experiencing instability and conflict since the military coup of 2012 and the occupation of the northern regions by armed groups. These events were followed by the deployment of French-led military forces in January 2013, which handed over to the United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA) in July 2014.
President Ibrahim Boubacar Keita, first elected in 2012, was re-elected for a second term in August 2018. Parliamentary elections scheduled for the fall of 2018 were postponed until the first half of 2019, and members’ terms of office scheduled to end on December 31, 2018, were extended for six months by the Constitutional Court.
Peace negotiations between the Government and two rebel coalitions, the “Platform” and the “Coordination,” concluded with the signing of agreements in May and June 2015. While the agreement does not envision autonomous status for Mali’s northern regions, it provides an impetus for decentralization, creating a development zone and setting up several projects, including a program of accelerated development in the north (Programme de développement accéléré du Nord) and an emergency program for the revival of development in the northern regions (Programme
To present a united front in the face of the shared challenges, Mali, along with Burkina Faso, Chad, Mauritania, and Niger, created the G5 Sahel, in 2014.
In July 2017, the Sahel Alliance was established by the European Union, France, Germany, the UNDP, the African Development Bank, and the World Bank, to help stabilize the region and accelerate development of the G5 Sahel countries. Spain, Italy, the United Kingdom, and Luxembourg have since joined the Alliance, the aim of which is to provide financial support and coordinate the development and stabilization priorities of the G5 Sahel countries.
While overall national poverty in Mali fell from 50.9% in 2001 to 41.1% in 2010, regional differences persist. Poverty decreased during the period in some regions, including Kayes, Koulikoro, and Mopti, but it increased in the regions of Segou, Timbuktu, and Gao.
The extreme poverty rate rose from 47.8% to 50.4% between 2011 and 2013 as a result of the security crisis. However, thanks to exceptionally high agricultural production over the previous three years, the rate fell to 42.7% in 2017.
In 2016, Mali ranked 175th out of 188 countries on the United Nations Human Development Index. Poverty is much lower in urban areas, with 90% of all poor living in rural areas and concentrated in the south, where population density is highest. Drought and conflict have only increased the incidence of poverty.
Despite deteriorating security, economic performance remains strong, with robust growth. A strong performance in the secondary and services sectors led to a projected growth rate of 5.4% in 2017 (versus 5.8% in 2016), despite volatile security conditions.
Primary sector growth fell from 7.6% to 4.8% between 2016 and 2017, owing to decreased rainfall, while the tertiary sector has continued to grow as a result of renewed dynamism in the telecommunications sector, which has grown at a rate of around 6% since 2014.
On the demand side, investment has risen sharply, climbing 8%, partly as a result of an increase in private investments for the first time since 2012, and partly as a result of the Government’s efforts to reduce infrastructure gaps.
The inflation rate rose to 1.8% in 2017 as a result of higher food prices and increased international oil prices.
Notwithstanding a slight deterioration in the terms of trade (owing to increased oil prices and lower gold prices), the current external deficit (grants included) fell to 5.8% of GDP in 2017, compared to 7.2% in 2016, thanks to an improvement in the balance of trade.
Despite pressure on public expenditure, the authorities have managed to contain the budget deficit, which narrowed from 3.9% of GDP in 2016 to 2.9% in 2017, thanks to the rationalization of current expenditure and significant improvement in domestic revenue.
Mali is a member of the West African Economic and Monetary Union (WAEMU). Monetary policy is managed by the Central Bank of West African States (BCEAO), which keeps a peg between the CFA Franc and the Euro, a policy supported by the French Treasury.
Growth is projected to hold steady at about 5% over the medium term.
lastupdated: Jan 11, 2019