Mali WT/TPR/S/43
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I. THE ECONOMIC ENVIRONMENT
(1) MAJOR FEATURES OF THE ECONOMY
1. Mali is a landlocked country in West Africa which covers an area of 1,241,238 km2 and in
1997 had nearly ten million inhabitants.  The capital, Bamako, has about one million inhabitants;  the
other cities, the largest of which are Ségou, Mopti, Sikasso and Gao, have fewer  than 100,000
inhabitants.  There is a sizeable drift away from the land, particularly to the capital:  the proportion ofthe population living in cities rose from 14 per cent in 1970 to 27 per cent in 1995 (Table I.1).
Illiteracy (69 per cent of the total population in 1995) and poor access to health care have helped to
keep the infant mortality rate high (123% in 1995); average life expectancy at birth is 50 years.
Table I.1
Basic social data, 1970-95
Indicators 1970     1990       1995
Population (millions) 5.3 8.1 9.0
Urban population (percentage) 14 24 27
Annual rate of population growth (percentage) .. 1.8 2.0
Infant mortality rate (children< 1 year) (per '000 live births) 204 166 123
Life expectancy at birth 38 48 50
Public spending on health (percentage of GDP) .. 0.6 0.5
Public spending on education (percentage of GDP) .. 2.4 2.2
Illiteracy (percentage of population) .. 68 69
   -   Men
   -   Women.. 59
7661
77
Human development indicator (HDI ranking/total number of countries) .. 156/160 171/175
..       Not available.
Source:  World Bank, various publications;  United Nations Development Programme,  Human Development Report , several issues.
2. With a gross national product per capita of US$250 in 1995,  Mali  belongs to the group of
least-developed countries.1  The country's main economic activity is agriculture (mainly cotton
growing and livestock production), which accounts for around 48 per cent of real GDP and employs
about 80 per cent of the working population.  Mali is the foremost cotton producer in sub-Saharan
Africa:  cotton accounts for about 50 per cent of its goods export earnings.  Livestock production is
practised in the North, from which transhumant herd s move southwards during the dry seasons to look
for grazing and water (the soil there being more fertile and suited to cultivation).  The development oflivestock production has been slowed in the North in recent years by political disturbances.
Exploitation of the gold reserves has revitalized the mining sector:  gold accounted for 17 per cent of
goods export earnings in 1996.  The sub-soil of Mali contains numerous other resources, e.g. bauxite,
uranium, platinum, silver, lithium, fluorine, tin, barytine, copper, lead and zinc.
3. The industrial manufacturing sector, still relatively undeveloped because of high production
costs, accounts for about 13 per cent of GDP.  It concentrates mainly on the domestic market and
produces mostly agri-foodstuffs and textiles.  In 1994 the modern secondary sector consisted of
around 180 industrial units situated mostly in the Bamako region and employing 12,360 permanent
workers.  The services sector accounts for around 40 per cent of real GDP.  This sector is dominated
by commercial services and is the most attractive to informal activities.
                                                     
   1World Bank (1997).WT/TPR/S/43 Trade Policies Review
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4. The size of the informal sector in Mali is due to low employment in the organized sector and
to rapid urbanization.  The contribution of the info rmal sector, accounting for about a quarter of GDP,
reached 29 per cent in 1994 following the devalua tion of the CFA (African Financial Community)
franc, the common currency of the member countries of the West African Economic and Monetary
Union (WAEMU, see Annex I.1).  Tertiary activities represented 75 per cent of the informal sector's
added value in 1996, with 45 per cent for trade, 15 per cent for non-commercial services and15 per cent for transport.  An advance payment on miscellaneous taxes and charges (ADIT)
amounting to 5 per cent of the c.i.f. value of imports was introduced in 1993 and is levied at the
customs "cordon" in order to compel "informal" taxpayers to identify themselves;  the ADIT is
deducted from the other taxes payable by the taxpayer.
5. The Malian economy is dependent on the outside world:  net transfers generally account for over
50 per cent of export earnings, derived mainly from cotton, livestock products and gold, which are subject
to fluctuations in world prices.  Exports of agricultural products, including livestock, have been more
frequently affected by drought since the 1980s.  Combined with the increase in cotton production, the
droughts have contributed to the food shortages which have become more frequent since then.  Mali's
external balances are in structural deficit, which even the devaluation of the CFA franc in 1994 has notbeen enough to offset.  Mali's external debt was US$2.91 billion in 1996, about half of which was owed
to multilateral institutions.
(2) 
ECONOMIC DEVELOPMENTS
(i) From independence to 1991
6. On attaining independence in 1960, Mali opted for a planned economy within which the
State, which was regarded as the driving force of development, prepared five-year plans.  The State
monopoly took the form of the creation of State enterprises.  Mali left the franc zone and created theMalian franc in 1962.  Education and the infrastructure sector were neglected at the first signs of
economic difficulty.  Arrears of domestic payments and external debt mounted.  The fairly scanty
public resources were used to fund losses in the parastatal sector or to subsidize uneconomic
activities.  As a result of difficulties with payments, particularly external, a series of reforms was
started in 1982.  Despite a significant financial reorganization, the adjustment process was interruptedin 1987.
7. The first structural adjustment programmes supported by the International Monetary Fund and
the World Bank were introduced in 1988;  they included, among other things, a Public Enterprise
Sector Adjustment Programme (PESAP) and an Ag riculture Sector Adjustment Programme (ASAP).
The reforms led to: the reduction of State intervention in rural activities from 1986 onwards;liberalization of cereals prices in 1987;  abolition of export taxes on agricultural and livestock
products and the liberalization of input distribution in 1988;  reorganization of the cotton industry and
of several public enterprises, including reduction of the State share in the capital of the Mali
Development Bank in 1989; and the elimination of quotas and price lists for most imports and then of
tariff and non-tariff export restrictions in 1990-91.
8. The results of the reforms were mixed until 1991.  Real GDP growth rates fluctuated and, as
in the years 1981 and 1982, negative growth was recorded in 1991.  As a result of the restrictive
monetary policy followed by the Central Bank of West African States - Mali having rejoined the West
African Monetary Union and thus the franc zone in 1984 - the inflation rate was kept below 5 per cent
between 1987 and 1991.  However, the public deficit was still more than 10 per cent at the end of
1991.  Mali's external performance for the period was limited by climatic factors (the economy being
highly dependent on agriculture, including livestoc k production) and by fluctuations in world cottonMali WT/TPR/S/43
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and gold prices.  The programme was interrupted in January 1991 because of social and political
disturbances which led to the foundations of a democratic regime being established in Mali.
(ii) Post-1991 situation
9. Following the political changes in 1991, Mali continued its economic reforms, with an
interruption between August 1993 and April 1994 due to socio-political strains.  Two strengthened
structural adjustment facilities were concluded with the IMF:  the first from 1992 to 1996, and thesecond from 1996 to 1999.  Assistance from the World Bank with the structural reforms, including the
sectoral reforms, was continued.
2  The reforms carried out after 1988 were strengthened by, amongst
other things, the reorganization and privatization of State enterprises, the abolition of several domestic
taxes, including the tax on business and services, and the revitalization of the fiscal and customs
authorities.
10. The reforms led to a substantial simplification of the structure of import duties and taxes, and
to a reduction in fiscal drag, which encourages fraud.  The purpose of the tariff reforms was to
rationalize the system for protecting local products.  Import and export procedures were also
simplified, especially through the creation  at the Trade Ministry of a single window for non-customs
formalities.  The CFA franc was devalued in January 1994, and in 1995 Mali was accorded a 67 percent reduction (equivalent to CFAF 16.8 billion) in the debt which it had contracted with members of
the Paris Club.
11. Through its import-substitution and export-promotion effect, devaluation
3 led to an increase
in the domestic production of cotton, exports of which greatly increased, and of cereals, fruit and
vegetables.  Except in 1993, the reforms helped to  keep the real GDP growth level above that of
population growth, which is about 2 per cent.  After reaching 23.2 per cent in 1994 (because of
devaluation), inflation fell to under 7 per cent in 1996 (Table I.2).  However, the effects of the reformson the public deficit were not noticed until 1996 and 1997, when the deficit ratios with respect to GDP
settled down at levels close to those of 1990.  Mali's external performance was generally rather poor
throughout the period, except for the estimated results for 1997.
                                                     
2World Bank (1996).
3The devaluation of the CFA franc resulted in a depreciation in the real effective exchange rate (REER):
this rate was 18 per cent below its 1993 level, which in its turn was 12 per cent below the 1980 level.  Altogether,in 1995 the REER was 33 per cent below its 1970 level.WT/TPR/S/43 Trade Policies Review
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Table I.2
Basic economic indicators, 1990-97
1990 1991 1992 1993 1994 1995 1996 1997a
Nominal GDP (CFAF billion) 672.7 693.0 723.0 714.0 978.5 1,182.5 1,322.7 1,453.0
Nominal GDP (US$ million) 2,450.8 2,455.0 2,732.5 2,521.1 1,762.5 2,368.7 2,585.3 2,751.9
Nominal GDP per capita (US$) 301.4 293.2 322.8 291.5 199.6 262.8 281.3 293.9
   of which:  fixed investment per capita 57.7 60.6 63.9 59.5 50.9 66.3 67.8 67.0
GDP at constant prices (percentage change) 0.4 -0.1 8.5 -4.4 2.6 7.0 4.3 5.7
Consumer prices (percentage change) 0.6 1.8 -6.3 -0.2 23.2 13.4 6.8 ..
Exchange rate (CFAF/US$) 274.5 282.3 264.6 283.2 555.2 499.2 511.6 528
Real effective exchange rate (base 100 in 1990)b100 98.5 90.3 88.3 62.3 67.7 70.9 ..
Money supply (M2;  percentage change) -9.0 16.4 -2.8 11.6 37.8 20.1 10.3 ..
Interest rate (end-of-period bank rate;  percentage) 11.0 11.0 12.5 10.5 10.0 7.5 6.5 ..
External debt (percentage of exports in CFAF) 433 443 .. .. 589 467 .. ..
Gross international reserves (in US$ million) 198 326 314 340 229 330 .. ..
Gross international reserves (in months of imports) 3 5 4 .. 3 4 .. ..
Sectoral breakdown of real GDP
Agriculture .. 46.7 49.4 46.3 48.4 49.7 48.4 ..
Manufacturing industries .. 9.3 8.9 9.7 9.6 9.6 9.8 ..
Mining .. 2.3 2.3 2.3 2.1 2.1 2.4 ..
Services .. 41.7 39.4 41.7 39.9 38.5 39.4 ..
      Trade (percentage GDP also) .. 17 16.7 17.8 17.2 16.7 17 ..
Use of GDP (percentage of GDP):
P r i v a t e  c o n s u m p t i o n 8 07 97 67 97 77 68 07 6
G o v e r n m e n t  c o n s u m p t i o n 1 41 71 81 71 91 71 61 5
Investment 20,6 17 21 19 24 25 21 22
Net exports of goods and non-factor services -14,6 -13 -15 -15 -20 -18 -17 -13
G r o s s  s a v i n g s 1 31 51 61 41 91 81 51 7
Public accounts (percentage of GDP)
Total revenue (excluding grants) 17.3 15.8 13.8 14.7 14.2 15.0 16.4 15.8
    of which:  import duties 5.6 5.5 5.3 6.7 5.6 6.1 7.1 7.0
Total spending 25.8 27.7 25.5 24.8 28.6 26.0 24.5 24.8
Balance c-8.5 -11.9 -11.7 -10.1 -14.4 -11.0 -8.2 -9.0
Primary balance d-6.2 -10.2 -9.9 -8.5 -12.0 -9.5 -7.1 -7.9
Balance of payments (percentage of GDP) :
Trade balance -4.9 -6.0 -6.6 -4.9 -4.2 -4.6 -6.0 1.0
Current operations balance (excluding government grants) -14.4 -14.8 -19.1 -13.3 -11.6 -16.1 -20.8 -10.3
..      Not available.a Estimates.
b A drop in the real effective exchange rate indicates a depreciation.
c Balance = total earnings – total spending.d Primary balance = total earnings (excluding grants) - total spending (excluding interest on debt).
Source: Malian authorities.Mali WT/TPR/S/43
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(3) TRADE PERFORMANCE
12. Mali has external balances which are in structural deficit.  Exports generally cover only half
of imports, causing a permanent deficit in the trad e balance.  However, a downward trend in the size
(in US$) of the trade deficit has been noted since 1993.  The structural deficit in Mali's current
balance is due to the deficits in the trade balance and services which both official and private nettransfers - the former account, on average, for around three quarters of the total while the latter are
due mainly to income from Malian workers abroad - are unable to make good despite their magnitude
(Table I.3).
Table I.3
Balance-of-payments developments, 1993-96
(US$ million and percentage)
1992 1993 1994 1995 1996
US$ million
Trade balance -162.5 -120.1 -114.4 -115.0 -105.7
Net services -378.7 -299.1 -288.4 -387.6 -351.3
     Interest on external debt -46.5 -37.8 -43.0 -35.3 -27.8
     Freight and insurance -187.8 -180.8 -175.8 -215.3 -218.3
     Other services -144.4 -80.5 -69.5 -137.0 -105.2
Net private transfers 74.1 93.6 84.8 95.8 89.9
Net public transfers 370.4 249.3 254.3 249.2 251.2
Current balance (excluding grants) -467.1 -325.6 -317.9 -406.9 -367.1
Overall balance 11.3 37.4 81.8 81.9 127.8
(Percentage of GDP)
Trade balance/GDP -6.6 -4.9 -4.2 -4.6 -6.0
Current balance (excluding grants)/GDP -19.1 -13.3 -11.6 -16.1 -20.8
Grants/GDP 15.1 10.2 9.3 9.9 14.3
Exports f.o.b. 11.9 13.4 15.9 17.3 16.9
Imports c.i.f. 25.0 26.9 35.7 33.6 30.8
Source:  Malian authorities.
(i) Trade in goods
13. The share of exports in nominal GDP has risen markedly since 1992.  The importance of  the
main sources of export earnings changed, however, between 1993 and 1996.  Dependence on cottonexport earnings increased:  in 1996, cotton exports amounted to 58 per cent of total exports compared
with 46 per cent in 1990 (Chart I.1).  The share of gold exports also rose while that of livestock
decreased heavily, which makes gold the second source of export earnings followed by livestock
products.  The growth in earnings from these different sources explains the increasing share of exports
in GDP.  Devaluation of the CFA franc has consolidated the upward trend recorded for exports since
1993.WT/TPR/S/43 Trade Policies Review
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Chart I.1
Exports and imports by major product groups, 1993 and 1996
19931996
(a)    Exports
Live animals
27.3Gold
11.2
Live animals
12.8Other
9.2
Gold
16.9Food products
2.6Ginned cotton
58.5
Total:   98.9 billion CFA francs Total:   235.3 billion CFA francs
(b)    Im ports
Non-electrical 
machinery and 
equipment 
35.6Transport 
equipment
5.0Chemical
 products
6.7Food products
7.1 Petroleum products
11.6
Electrical machinery and 
equipment
2.0Cement and 
the like
3.3Other 
28.7Chemical 
products
13.3Petroleum products
13.8Food products
8.4
Transport 
equipment
12.2Other
29.0
Non-
electrical 
machinery 
and 
equipment
15.5
Electrical machinery 
and equipment
4.5
Total:   179.4 billion CFA francs Total:   467.8 billion CFA francs
Source :   Malian authorities.Per cent
Food products
3.1Ginned cotton
46.3
Cement and the like
3.3Other
12.1Mali WT/TPR/S/43
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14. The average propensity to import (ratio of imports to GDP) in Mali has shown an upward
trend since the early 1990s.  This trend, which has not been reversed by the devaluation of the CFA
franc in 1994, is due, among other things, to the trade liberalization reforms and to the nature of
certain imported goods for which demand is difficult to reduce and which have been made dearer by
the change in parity.  Machinery and mechanical appliances, petroleum products and chemicals andtransport equipment are among Mali's chief imports (Chart I.1).  The rise in the share of chemicals in
total imports between 1993 and 1996 is due particularly to demand for the fertilizers and
phytosanitary and veterinary products necessary for Mali's agricultural performance.  The increased
share of transport equipment in imports is due to heavy demand for foreign second-hand vehicles.
Altogether the goods for which demand has been relatively unaffected by  devaluation of the CFAfranc are those whose shares in imports have increased; this was not the case for machinery and
mechanical appliances.
15. Mali obtains more than half  its  export earnings from the developing countries, particularly those
belonging to the WAEMU (Chart I.2).  The increase in Mali's exports to the other WAEMU countries is
due not only to the introduction of the first measures for the creation of the Customs Union but also to thedevaluation-induced substitution of imports from outside the Union.  Côte d'Ivoire and Senegal were the
main destinations for exports by Mali in 1996.  The chief products exported by Mali to the other countries
of the West African subregion are live animals and dried or smoked fish.
16. The European Union is Mali's main supplier, followed by Côte d'Ivoire, the latter and France
each supplying over one fifth of Malian imports.  The increase in imports from Côte d'Ivoire and
Senegal is due to the import-substitution effect mentioned above (Chart I.2).  The starting up of the
Sadiola mines in 1996 explains why imports from South Africa, which were almost zero in 1993,
accounted for over 10 per cent of the total in 1996.
17. Mali imports capital goods from the European Union (those needed to operate the Sadiola
mine were imported from South Africa), as well as building materials and chemical and
pharmaceutical products.  Food products are imported mainly from the other countries of the West
African subregion, apart from rice, which comes from Asian countries.WT/TPR/S/43 Trade Policies Review
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Chart I.2
Exports and imports by partner, 1993 and 1996
1993 1996
(a)    Ex ports
Other
14.5
East Asia
6.8
Côte d'Ivoire
30.9Switzerland
16.1
Senegal
6.5East Asia
9.7
Switzerland
8.8
Senegal
25.8EU15
15.1
Côte d'Ivoire
26.7Mauritania
2.2Other
11.7
Total:   98.9 billion CFA francs Total:   235.3 billion CFA francs
(b)    Imports
East Asia 
11.2
Nigeria
3.9United States
4.5Other
14.7
Senegal
4.8EU15
38.9
Côte d'Ivoire
30.9Saudi Arabia
2.6a
Total:   179.4 billion CFA francs Total:   467.8 billion CFA francs
Source :  Malian authorities.Brazil
15.0Per cent
EU15
10.2aa
Other
8.1
United States
5.3EU15
35.5
Senegal
5.4South Africa
10.6Nigeria
1.6Brazil
  2.4
Côte d'Ivoire
23.0East Asia
8.1a
a            The data taken into account are th ose available for trade with Fr ance, Spain, Portugal, Italy, 
               the United Kin gdom , Belgium-Luxembour g, the Netherlands and German y.Mali WT/TPR/S/43
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(ii) Trade in services
18. Mali is a net importer of services.  Freight and insurance are the main causes of the deficit in
its external services account;  their balances were responsible on average for around 60 per cent of the
deficits in this account for the 1992-97 period and worsened by over 20 per cent to reach US$(-215.3)million in 1995 (Table I.3).  The trend of freight and insurance services reflects that of goods imports
(section (3)(i)).
19. Interest on external debt constitutes another important reason for the deficit in the services
account;  following the various debt-rescheduling agreements concluded with creditors, particularly those
of the Paris Club, China and the former USSR, the contribution made by interest to the deficit in theexternal services account has been reduced from its level of around 15 per cent in 1994 to about 8 per
cent at present.  However, because the different loans are denominated in foreign currency, the equivalent
of the interest in CFA francs has been increased by the change in parity, amounting to CFAF 23.9 billion
in 1994 and estimated at CFAF 15.8 billion for 1997.
(4) 
INVESTMENTS
20. Local and foreign investment in Mali has shown an upward tendency since the second half of
the 1980s, particularly since the economic reforms started.  Gross fixed-capital formation rose from
16.4 per cent of GDP in 1985 to an estimated level of around 23 per cent in 1997, after exceeding
25 per cent in 1994 and 1995 (Table I.4).  The relatively high levels for the years 1994-96 may be due
to the new  investments, to adjustments in the costs of investments under way or programmed before
devaluation and to the absence of a sustained gr owth in economic activity owing especially to
inadequacies in project choice and execution.
21. The number of investment projects has continued to increase since 1994 (Table I.4):  during
1997, 118 projects representing a total investment of about CFAF 64.3 billion and creating 3,025 jobs
were filed.
Table I.4
Gross fixed-capital formation, 1985 and 1990-97
(CFAF billion and percentage of GDP)
1985 1990 1991 1992 1993 1994 1995 1996 1997a
Gross fixed-capital formation (CFAF
billion)90.8 128.3 141.9 143.7 144.8 248.7 297.7 319.2 332.6
    - Public sector 32.2 35.7 43.8 41.6 40.7 66.7 86.7 91.9 98.4
     - Private sector 58.6 92.6 98.1 102.1 104.1 182.2 211.0 227.3 234.2
Gross fixed-capital formation
(percentage of GDP)16.4 19.1 20.5 19.9 20.3 25.4 25.2 24.1 22.9
     - Public sector 5.8 5.3 6.3 5.8 5.7 6.8 7.3 6.9 6.8
     - Private sector 10.6 13.8 14.2 14.1 14.6 18.6 17.8 17.2 16.1
Reminder
1994 1995 1996 1997b
Number of projects 67 65 93 118
Estimated investment (CFAF billion) 10.3 20.8 27.9 64.3
Estimated jobs 1351 1727 1878 3025
a Estimates.
b Up to 30 November 1997.
Source: Malian authorities.WT/TPR/S/43 Trade Policies Review
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22. Between 1985 and 1994 net foreign direct invest ment flows (private) in Mali were low
compared with the average for sub-Saharan Africa (0.14 per cent of GDP compared with 0.58 per centfor the group).  Foreign direct private investments approved under the Code have risen since then
from 0.3 per cent of GDP in 1995 to 0.7 per cent in 1997:  the approved 1995 amounts were around
three times those for 1994 and only about one third of those for 1997 (Table I.5).  Apart from 1995,
the chemical industry (in particular enterprises producing pharmaceutical and veterinary products,
fertilizers, insecticides, lime and paint) has regularly received over 60 per cent of these investments.
23. Lack of basic infrastructure, including means of communication, and difficulties of access to
basic services together with the consequent high level of their costs are among the factors acting as a
brake on investment in Mali.  To these factors the findings of a workshop in 1998 added the following:
poor involvement by beneficiaries in project identification and formulation;  absence of a national project
study fund; poor application of programming criteria; low level of training; and lack of project
coordination.
4
Table I.5
Foreign direct investment:  projects approved under the Investment Code, 1994-97
(Amounts in CFAF million)
1994 1995 1996 1997
Branches Amount Number of
projectsAmount Number of
projectsAmount Number of
ProjectsAmount Number of
projects
Agri-food 151.1 3 2,099.7 4 600.0 1 1,154.0 2
Chemicals 744.4 1 1,333.8 1 3,879.5 6 6,923.9 3
T e x t i l e s 3 2 5 . 71 000000
Services 8.5 1 0 0 373.2 2 598.9 4
Other manufacturing
industries00 6 8 . 7100 1 , 1 5 2 . 43
O r e s 0 0 07 5 9 . 1 12 7 8 . 6 1
Total 1,229.7 6 3,501.1 6 5,611.8 10 10,107.7 13
Source:  Malian  authorities.
(5) OUTLOOK
24. The Government's main objective for the next ten years is to increase real GDP by 5 to 6 per
cent every year, bring down inflation as measured by the GDP deflator to 2.5 per cent from 1998
onwards and reduce the current external deficit in the balance of payments (excluding official
transfers) to under 9 per cent of GDP by 1999.
25. To achieve these results, the Government intends to continue to reorganize public finances by
improving the performance of the tax and customs authorities, unifying the rates of value-added tax,
abolishing exemptions, continuing the reforms in the State enterprise sector, including the
privatization of some of these enterprises, and cutting public spending.  Improvement of social
conditions (particularly health and education) will involve a better apportionment of State resources inthis field and the funding of part of the relevant expenditure by the population categories concerned.
                                                     
4La Lettre Afrique Expansion No. 548, 18 May 1998Mali WT/TPR/S/43
Page 11
26. It is also planned to diversify economic activities and thus production and exports.  The
production of labour-intensive goods in respect of which Mali enjoys comparative advantages
(textiles and agro-industrial products) is one of the routes to be explored.  In order to provide a regular
supply of inputs for these industries, it is proposed, in the agricultural sector for example, to
generalize the use of irrigation techniques, particularly in cotton and rice cultivation.  It is also
planned to diversify rural activities, including crop raising, in order to limit the consequences offluctuations in world cotton prices for farmers' incomes.WT/TPR/S/43 Trade Policies Review
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ANNEX I.1:  EXCHANGE REGULATIONS5
27. Within the franc zone, Mali belongs to the West African Economic and Monetary Union
(WAEMU) and the West African Monetary Union (WAMU), whose issuing authority is the Central
Bank of West African States (BCEAO).6  The legal currency in the Union is the CFA (African
Financial Community) franc which is attached to the French franc via a fixed rate.  This parity wasraised from CFAF 50 to CFAF 100 to the French franc in January 1994.  Like the Bank of Central
African States (the equivalent of the BCEAO in Central Africa), the BCEAO has an "operations
account" (with the French Treasury) into which at least 65 per cent of its disposable foreign currency
is paid and which it uses to make transfers outside the zone.
7  The special feature of this account is
that it may become a debit account, without any limits set a priori, because of the French
Government's undertaking to guarantee without limit the convertibility of the CFA franc.
28. The exchange rates of the CFA franc with respect to other foreign currencies are fixed on the
basis of the corresponding exchange rates for the French franc.  A commission of 0.25 per cent is
levied by banks and post offices on all transfers outside the WAEMU, and this sum is paid to the
Malian Treasury.  There is no tax on the selling or buying of foreign currency.  Forward exchangeoperations are subject to authorization by the Ministry of Finance, which is responsible for exchange
control.  Payments (with the exception of transacti ons involving gold and the issuing, advertising and
offer of financial instruments) and capital transfers within the zone are free.  All countries in the zone
theoretically have common exchange regulations with respect to third countries.  Payment
transactions by WAEMU countries with Gambia, Ghana, Liberia, Mauritania, Nigeria and Sierra
Leone are usually made through the West African Clearing House, replaced in 1995 by the West
African Monetary Agency (WAMA). Like the other WAEMU countries, Mali signed Article VIII(Sections 2, 3 and 4) of the Articles of Agreement of the International Monetary Fund on 1 June 1996.
29. Imports and exports worth more than CFAF 500,000 must be domiciled with an authorized
bank.  Residents must collect the amounts payable to them by foreign countries (including the franc
zone, which includes the WAEMU countries) for goods exported and repatriate them to the bank of
domiciliation within one month following the date on which payment is due;  payment for exports toall foreign countries (including those of the franc zone) is due within 180 days after the goods have
reached their destination.  Receipts from invisible transactions must be collected and passed on within
two months following the date they are due or encashed.
30. Payments for invisible transactions (apart from those made within the franc zone), transfers of
profits, dividends and royalties to non-residents, transfers of capital outside the zone, investmentabroad by residents, foreign direct investment in Mali, borrowing abroad and the issuing, advertising
and sale of foreign securities in Mali are subject to authorization by the Minister of Finance.
8  All
                                                     
5Exchange regulations within the franc zone are described in IMF (1997) and WTO (1997).  The
following section is to a large extent based on these two sources.
6The members of the WAEMU are Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, the Niger,
Senegal and Togo.  BCEAO headquarters are in Dakar and there is an agency in each of the other member States.In addition to the WAEMU member countries, the franc zone includes France and its overseas departments andterritories, Monaco, the member countries of the Central African Economic and Monetary Union (CEMAC), i.e.Cameroon, Chad, Congo, Gabon, Equatorial Guinea and Central African Republic, whose central bank is the Bankof Central African States (BEAC), and Comoros.
7Operations Account Convention, Dakar, 1973.  Each central bank also has a French Treasury ordinary
current account in places where it has its own establishment;  the operations account is debited or credited with theamount of the transfers resulting from the levelling down or topping up of this account (Article 3).
8In practice, authorized intermediary banks and post offices are empowered to carry out transfers of up to
CFAF 500,000.Mali WT/TPR/S/43
Page 13
payments made from abroad to Mali with a view to direct or any other investment must take place
through an authorized agent and must involve eith er a surrender of foreign exchange on the currency
market or the debiting of a foreign account in francs.
31. Foreigners working in Mali may transfer up to 50 per cent of their wages abroad if they live
with their family in Mali, and up to 80 per cent if their family lives abroad. The amounts which
residents travelling outside the franc zone may take with them are limited to CFAF 1,000,000 perperson per tourist trip and to CFAF 200,000 per day per person for a business trip lasting more than a
month.  Travellers may bring into Mali an unlimited number of bank notes issued by the BCEAO or
the Banque de France.  Foreign bank notes brought in by residents must be sold to an authorized
intermediary bank within eight days.  In Augu st 1993, following a flight  of capital, the BCEAO
suspended the automatic buying of its banknotes exported outside the WAEMU.