Mali, a vast Sahelian country, has a low-income economy that is undiversified and vulnerable to commodity price fluctuations. High population growth rates (a fertility rate of six children per woman in 2017) and climate change pose major risks for the country’s agriculture sector and food security.
After rising to 47.2% between 2011 and 2015 owing to the security crisis, the extreme poverty rate fell slightly to 42.7% in 2019 as a result of exceptionally high agricultural production in the past four years. Poverty is concentrated in the rural areas of southern Mali (90%), where the population density is the highest.
Mali has been experiencing instability and conflict since the military coup of 2012 and the occupation of the northern regions by armed groups. The operations of the United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA) date back to July 2014.
President Ibrahim Boubacar Keïta, first elected in 2013, was reelected to a second term in August 2018. Parliamentary elections scheduled for the fall of 2018 were postponed several times. The first round took place on March 29, 2020, following an electoral campaign marked by the kidnapping of Soumaïla Cissé, head of the Union for the Republic and Democracy (URD) opposition party, in Saraféré on March 25, 2020. In the first round, 12 of 147 representatives were reelected. The remaining 125 seats will be awarded following the second round scheduled for April 19, 2020.
Peace negotiations between the government and two rebel coalitions, the “Platform” and the “Coordination,” concluded with the signing of an agreement in June 2015. This agreement provides for greater decentralization, creating a special development zone for Mali’s northern regions. It includes several projects, among them the program of accelerated development in the north (Programme de développement accéléré du Nord) and the emergency program for the revival of development in the northern regions (Programme d’urgence pour la relance du développement des régions du Nord). However, the country is encountering difficulties with the implementation of this agreement.
Security, which is critical for economic recovery and poverty reduction, remains fragile in the face of continued attacks by armed groups on UN peacekeepers, the Malian army, and civilians, mainly in the north and central regions.
In July 2017, Germany, the African Development Bank, the World Bank, France, the European Union, and the United Nations Development Programme launched the Sahel Alliance in order to provide a coordinated and tailored response to the challenges faced by the G5 Sahel member countries (Burkina Faso, Chad, Mali, Mauritania, and Niger). Since that time, Denmark, Italy, Luxembourg, the Netherlands, Spain, and the United Kingdom have joined the Alliance.
- The impact of the coronavirus (COVID-19) pandemic on the Malian economy has, thus far, been limited. As a net oil importer, the country is benefiting from the sharp drop in the price of crude. Mali's main export item is gold, a traditional safe haven in times of crisis. Consequently, the crisis is expected to lead to an improvement in its terms of trade, which would facilitate a reduction of the current account deficit.
- These potential positive effects must, however, be viewed in perspective, especially since Mali faces the risk of a collapse in the prices of its agricultural exports and lower demand in the Euro zone. Furthermore, if the direct effects of the slowdown in China’s economic activity on Malian exports are moderate, Mali could experience importation difficulties in a situation where international value chains are disrupted.
- Using a baseline scenario in which China and the European Union experience a modest economic downturn and oil prices decline by 25%, Mali’s GDP growth is projected to fall to 4.9% in 2020, against 5.1% in 2019.
- In a more pessimistic scenario in which oil prices decline by 50%, the global economy experiences a very sharp downturn, and the virus spreads significantly among the Malian population, the impact on the Malian economy would be far greater. Social distancing measures and the lack of medical infrastructure to cope with the health crisis would disrupt domestic economic activity, leading to a roughly 4% decline in real GDP growth.
- Mali has the fiscal and monetary space to implement countercyclical policies. It could, however, have difficulty sustaining itself financially in a context of global uncertainty and risk aversion on the part of investors. In the short term, it would be to the government’s advantage to redirect expenditure toward public health services and take steps to increase its sources of revenue, including revenue from international technical and financial partners.
Last Updated: Apr 22, 2020