Authors : Becaye Diarra, Hamaciré Dicko, Abdoulaye Konate
The economy of Mali suffered badly from the 2012 crisis, but its recovery strengthened in 2016. Growth estimates for 2016 (5.3%), continued financial support from the international community and measures envisaged by the government as part of its programme of economic and financial reforms offer the hope of a return to the growth rates of 2000-10 (5.7% on average).
As two-thirds of Malian exports are comprised of gold, with cotton making up a smaller proportion, they are subject to fluctuations in world prices and to climatic variability. The two commodities accounted for 70% and 10% of exports respectively in 2016. The country is also facing the challenge of high population growth (3% per year), which means that a doubling of per capita income – USD 790 in 2016 – will take 35 years based on the 2016 growth rate.
The security situation remains unstable. There were kidnappings, armed fighting within rebel groups, and between rebel groups and the Malian and UN armed forces, not only in the north of the country, but also in the centre, in particular in Bamako where there were terrorist attacks. This insecurity affects political and institutional stability as well as socio-economic prosperity. It is closely linked to weak state authority in the Sahel area, which has encouraged the proliferation and prosperity of illegal activities and organised crime. However, the authorities’ willingness to put an end to these troubles and the increased mobilisation of the international community suggest the medium term prospects are optimistic.
Due to the recovery since 2013, economic growth is expected to remain above its trend rate of around 4.5% until the end of 2018, at 5.4% in 2017 and 5.0% in 2018, before dropping back down. The inflation rate is expected to fall well below the West African Economic and Monetary Union (UEMOA) ceiling of 3.0%, with a rate of 0.9% in 2017 and 1.6% 2018. These optimistic prospects are subject to several risks, however. First, setbacks in restoring security could negatively affect consumer confidence, donors and investors, as well as increase spending on security at the expense of social programmes. Second, the economy’s high dependence on exports of gold and cotton exposes the balance of payments – and to a lesser extent public finances – to fluctuations in international commodity prices. Finally, poor management of public finances could also affect consumer confidence, businesses and international financiers, and thus slow growth. Otherwise, public management should be guided by a prudent fiscal policy that maintains sustainable deficits and by a debt policy in line with the current risk of moderate over-indebtedness.
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