Mali WT/TPR/S/133
Page 1
I. ECONOMIC ENVIRONMENT1
(1) OVERVIEW
1. Since the first review of its trade policy in 1998, Mali has modified its development
programme and in 2002 adopted a Poverty Reduction Strategy Paper (PRSP) (Chapter III (3)(i)),2
which was revised in early 2003 in order to take into account the impact of the crisis in Côte d’Ivoire.3
Mali has also continued with its macroeconomic stabilization and structural reform programme, with
the support of a Poverty Reduction and Growth Facility (PRGF) from the IMF, the renewal of which
is being sought. The main objectives of its PRSP are to control government finance, support the
common monetary policy of the West African Monetary Union (WAMU), and speed up structural
reform (cotton subsector and management of government finance for 2003). In 2002, Mali was able to
meet two of the first four convergence criteria subject to multilateral monitoring by the West African
Economic and Monetary Union (WAEMU), but should have met all the criteria in 2003.
2. Economic growth depends above all on trends in the primary sector, which is highly
vulnerable to climate variations. Since the first review, an increase in production and exports of gold,
which has become Mali’s major source of export earnings has led to an average rate of economic
growth of around 5.2 per cent (1998-2002). The Malian authorities recognize, however, that this
activity cannot constitute a sustainable basis for economic activity inasmuch as gold resources are not
renewable and mining yields only a low level of value added. Meeting the objectives of the PRSP,
including average economic growth of 6.7 per cent by 2015, will require giving impetus to the rural
sector, industry and commercial services.
3. The crisis that broke out in Côte d’Ivoire in September 2002 underlined the importance of
access to ports in the subregion for Mali’s economy; Mali is a landlocked country and has to assume
the extra cost involved in transporting goods.4The negative impact of the crisis on economic growth
was mitigated, however, by the fact that economic operators were able to diversify channels and also
by the fact that performance during the 2003-2004 agricultural season was better than originally
forecast; this performance will be included in the figures for 2003. The Malian authorities are
counting on growth of 5.6 per cent in 2003, with an increase to 6.7 per cent in 2004.
4. According to the UNDP, Mali is one of the poorest of the “least developed countries (LDCs)”
and is 172ndout of 175 countries as far as its human development level is concerned.5Poverty affected
63.8 per cent of the population in 2001. Under the Heavily Indebted Poor Countries initiative (HIPC),
in March 2003 it was decided to alleviate Mali’s external debt.6
1The main sources consulted when preparing this chapter were the WAEMU Commission (2003);
IMF (2003a); IMF (2004).
2Achievement of the PRSP’s objectives is built around three priority axes: institutional development
and enhancement of governance and participation by the private sector; human development and better access to
basic social services; development of the infrastructure and support for production sectors (Government of Mali
(2002)).
3“Mali – Letter of Intent, Memorandum of Economic and Financial Policies, and Technical
Memorandum of Understanding", 13 February 2003 [on line]. Available at http://www.imf.org
[7 November 2003].
4According to information provided by the Malian authorities, 72 per cent of imports and 79 per cent
of exports in volume terms went through Abidjan in 2001; these figures fell to 15 per cent and 32 per cent
respectively in 2003.
5UNDP (2003).
6IMF Press Release No. 03/29. The nominal value of the reduction is US$675 million.WT/TPR/S/133 Trade Policy Review
Page 2
(2) BACKGROUND
5. Mali covers an area of 1,241,238 km2, of which two thirds is in the Saharan region. It has
borders with Mauritania and Algeria to the north, Niger to the east, Burkina Faso, Côte d’Ivoire and
Guinea to the south, and Senegal to the west. The River Niger (locally called the “Joliba”) flows
through the south of the country.
6. In 2001, Mali’s population was estimated to be some 11 million, of whom the majority lived
in the south of the country, with around 29 per cent in urban areas (mainly the capital, Bamako). In
2000, per capita GDP was US$240.7Part of the population (between 800,000 and 2 million) lives in
Côte d’Ivoire. The rate of demographic growth is relatively high (with an annual birth rate of 3.1 per
cent). Some 26 per cent of the adult population is literate and average life expectancy is 48.4 years.
7. Mali’s nominal gross domestic product (GDP) was estimated by the authorities to be
CFAF 2,549 billion (US$3.9 billion) in 2003, of which two thirds can be attributed to the informal
sector.8According to estimates by the IMF, nominal GDP, excluding the informal sector, was
CFAF 1,187 billion (US$2 billion) in 2002. Mali’s economy chiefly depends on agriculture
(particularly cotton and livestock), which accounted for 32 per cent of nominal GDP in 2002
(Table I.1), but employs around 70 per cent of the working population. Mining has expanded strongly,
however, since the first review of trade policy as a result of the increase in gold production (and
exports, see below). The share of mining and quarrying in GDP rose from 6 per cent in 1998 to
14 per cent in 2002. Manufacturing is still little developed (Chapter IV(4)) and industrial production
has not increased since the first review. The services sector includes a large percentage of trade-
related services and accounts for close to 33 per cent of nominal GDP.
Table I.1
Basic economic indicators for Mali, 1998-2002
(in percentage of GDP)
1998 1999 2000 2001 2002
Primary 36 38 35 35 32
Agriculture 21 22 19 20 17
Livestock 10 10 11 10 10
Fishing and forestry 5 5 6 5 5
Secondary 22 20 22 24 27
Mining and quarrying 6 6 7 12 14
Manufacturing 11 8 8 6 8
Electricity, gas and water 10 10 11 10 10
Construction and public works 1 1 2 2 2
Table I:1 (cont'd)
7IMF (2004).
8According to a study provided by the authorities on “ L’emploi, le chômage et les conditions d’activité
dans la ville de Bamako ”, the informal sector absorbs around 80 per cent of the working population living in
Bamako, while the formal private sector employs 10 per cent of the working population and the public sector
10 per cent.Mali WT/TPR/S/133
Page 3
1998 1999 2000 2001 2002
Tertiary 34 34 37 35 33
Trade 12 13 14 13 13
Transport and telecommunications 5 5 5 5 5
Banks and insurance 1 1 1 1 1
Non-tradable services 9 8 9 9 9
Other services 8 8 8 7 7
Source: IMF (2004).
(3) RECENT ECONOMIC DEVELOPMENTS
(i) Macroeconomic indicators9
8. Mali's authorities estimated the rate of economic growth of GDP in volume terms to be
3.9 per cent in 2002 compared with 12.6 per cent in 2001 (Table I.2), the latter rate being exceptional
and a result of the settlement of the crisis that occurred in the cotton subsector in 2002. The slowdown
in economic growth occurred at a time of inflationist pressure with inflation rates of around 5.2 per
cent in 2001 and 5 per cent in 2002. These relatively high inflation rates (the average for the period
1998-2002 was around 2.5 per cent) are due to the effects of the crisis in Côte d’Ivoire on the cost of
imported goods and the increase in the price of millet, a basic foodstuff.
Table I.2
Economic indicators for Mali, 1998-2002
1998 1999 2000 2001 2002
(Percentage)
Real economy
Change in real GDP 8.1 5.7 -3.3 12.0 3.9
- Primary 10.9 7.7 -10.4 11.7 -4.4
- Secondary 11.1 -8.8 4.4 26.1 20.0
- Tertiary 4.8 5.3 4.3 8.7 1.1
(CFAF billions)
External economy
Current transactions -143.6 -176.1 -226.9 -275.9 -136.5
- Exports, f.o.b. 334.8 355.4 388.1 531.2 631.4
- Imports, f.o.b. -329.3 -372.8 -421.5 -538.4 -498.3
- Services (net) -159.2 -161.3 -167.9 -198.1 -167.2
- Current transfers 40.0 45.8 44.3 51.1 58.5
Capital account and financial transactions (net) 108.3 137.1 182.6 131.1 183.2
Overall total -22.6 -10.1 27.8 -32.9 96.4
Source: IMF (2004).
9. In 2002, trends in economic activity were marked by: (i) poorer performance during the 2002-
2003 agricultural season in comparison with 2001-2002; (ii) record production figures for gold
(66.1 tonnes); (iii) construction and public works activities related to the organization of the African
Cup of Nations (ACN); and (iv) a slowdown in trade and transport as a result of the crisis in Côte
9As of 2002, the Malian authorities revised the way in which the national accounts are compiled on the
basis of recommendations from the WAEMU Commission so as to allow comparisons among member States.
The main consequence of this revision has been to attribute the performance in the agricultural sector (n/n+1) to
the calendar year n, which was previously attributed to the year n+1.WT/TPR/S/133 Trade Policy Review
Page 4
d’Ivoire. The growth rate in 2002 was below the average of 5.2 per cent over the period 1998-2002,
which was marked by strong expansion in the mining sector (Table I.2).
10. As regards the external economy, there was a surplus in the trade balance (on an f.o.b.-f.o.b.
basis) in 2002 because of the marked increase in exports (19 per cent) as a result of gold exports and a
sharp drop in imports on an f.o.b. basis (7.4 per cent), although the overall trade balance (on an f.o.b.-
c.i.f. basis) still shows a deficit, which is nevertheless much lower.10Over the period 1998-2002,
imports increased on average less rapidly than exports and the deficit in the current balance remained
at roughly the same level as in 1998. The decrease in global cotton prices played a role in this
situation, despite the compensatory effect of expansion of domestic cotton production
(Chapter IV(2)(b)), and diversification towards gold (see below).
(ii) Monetary and exchange policy
(a) Institutional arrangements
11. The countries belonging to the West African Economic and Monetary Union (WAEMU),
including Mali, have common monetary and exchange policies.11The WAEMU complements the
WAMU by an economic integration component (Chapter II(4)(ii)), and incorporates its provisions,
including a common currency administered by the Central Bank of West African States (BCEAO), a
specialized and autonomous institution of the WAEMU.12Mali, like the other member countries of
the WAEMU, accepted Article VIII of the Articles of Agreement of the IMF on 1 June 1996.
12. The franc of the African Financial Community (CFA) is the WAMU’s currency unit. Until
1 January 1999, when the euro became the currency of countries belonging to the European Monetary
Union, including France, the CFA franc had fixed parity with the French franc.13The CFA franc now
has fixed parity with the euro: CFAF 1,000 = €1.52449017.14The introduction of the euro did not lead
to any substantive changes as far as the arrangements in the franc zone are concerned.15
13. The BCEAO is responsible for issuing CFA francs and ensuring their stability. Its
responsibilities are set out in its articles of incorporation as follows: to implement the monetary policy
guidelines defined by the WAMU Council of Ministers; to transact exchange operations; to hold and
administer member countries’ exchange reserves; and to promote the proper functioning of the
Union’s system of payments. Consequently, no monetary policy is implemented at the national level.
14. The BCEAO defines its monetary policy in such a way as to maintain the rate of external
cover for the currency at a satisfactory level and to sustain economic activities in member countries
10In 2002, imports on a c.i.f. basis amounted to CFAF 646.7 billion (US$1,078 million), while imports
on an f.o.b. basis amounted to CFAF 498 billion (US$830 million), the difference between the two figures
mainly being the result of transport costs.
11The WAEMU Treaty was signed on 11 January 1994 by Benin, Burkina Faso, Côte d’Ivoire, Mali,
Niger, Senegal and Togo; Guinea-Bissau acceded to the Treaty on 1 January 1997.
12Monetary cooperation among member countries of the WAMU, created in 1962 with a new Treaty
signed in 1973, and France dates back to the colonial era. The BCEAO is the result of a monetary cooperation
agreement signed with France in 1972 and supplemented by the transactions account agreement of 1973.
13When the CFA franc was devalued by 50 per cent in 1994, the fixed rate became CFAF 1,000 =
F 10.
14The same parity applies to the CFA (Central African Financial Cooperation) franc, which is the
currency of the member countries of the Central African Economic and Monetary Union (CEMAC), whose
structure is similar to that of the WAEMU.
15Decision of the Council of the European Union of 23 November 1998 concerning exchange matters
relating to the CFA franc and the Comorian franc (98/683/EC).Mali WT/TPR/S/133
Page 5
without inflationary pressure. The BCEAO administers monetary policy in each member country by
fixing objectives for the money supply and credit on an annual basis. These take into account the
general financing needs of each member country’s economy and the resources needed to meet them,
as determined by each national Credit Committee. The BCEAO’s articles of incorporation provide a
ceiling for advances to national treasuries, which are subject to an interest rate fixed by the BCEAO
with a penalty if the ceiling is exceeded. Advances were frozen in each member State at the
31 December 2002 levels and then consolidated over 10 years at an interest rate of 3 per cent. States
are called on to issue public securities on the WAMU’s financial market.
15. Maintaining a common monetary policy calls for financial discipline on the part of each
country, which retains its own decentralized economic policy. The WAEMU has established a
Convergence, Stability, Growth and Solidarity Pact16, subject to multilateral monitoring since 2000.
According to the latest data from 2002, Mali has been able to satisfy two of the first four convergence
criteria and according to the forecast by the WAEMU Commission, should have respected them all in
2003.17The time-limit for convergence, planned for the end of 2002, has been postponed until mid-
2005 because of the problems encountered by WAEMU member States in meeting the first four
criteria.
(b) Foreign exchange regulations18
16. Foreign exchange transactions in euros between the BCEAO and commercial banks in Mali,
as well as exchange transactions by economic operators, are at a fixed rate. Foreign exchange
transactions in euros by economic operators may be subject to a commission. In addition, the buying
and selling rates for other currencies are determined on the basis of the rate for the euro on the foreign
exchange market.
17. Any foreign exchange operation in Mali must be conducted through intermediaries approved
(commercial banks) or authorized (exchange bureaux) by the Ministry of Finance. Banks and post
offices levy a commission of 0.25 per cent on transfers outside the WAEMU and this is handed over
to the Treasury. Imports and exports exceeding CFAF 5 million must be domiciled with an approved
bank.
18. Payments (except for transactions in gold and the issue, advertising and sale of financial
instruments) and transfers of capital within the WAEMU are free. The main provisions of the
common regulations governing foreign exchange with third countries are the following:
- Sums to cover current transaction operations may be freely transferred subject to the
submission of supporting documentation;
- the obligation to repatriate earnings from exports to countries outside the WAEMU
and their conversion into CFA francs;
- capital may enter freely from any country; and
- outflow of capital to countries outside the WAEMU is subject to verification based on
the submission of supporting documentation (attestation and issue of a transfer
authorization by the services of the Ministry of the Economy and Finance).19
16Additional Act No. 4/99.
17WAEMU Commission (2003a).
18IMF (2003b).WT/TPR/S/133 Trade Policy Review
Page 6
19. Mali allows foreign investors to repatriate capital invested and the profits from their
operations, as well as savings on salaries by expatriate staff (Chapter II(3)(e)).
(iii) Budget policy
20. Since the first review of Mali's trade policy, the government finance situation has deteriorated
as regards the percentage of the overall balance in the GDP, with deficit increasing from 2.2 per cent
in 1998 to 3.6 per cent in 2002. This trend is chiefly marked by a decrease in grants recorded in the
GDP (3.6 per cent of GDP in 2002 compared to 5 per cent in 1998), as the overall balance excluding
grants remained at around the same level, with a deficit of 7.2 per cent in 2002. This stability is due in
particular to the efforts made to collect revenue, especially customs duties and taxes (7.6 per cent of
GDP in 2002) and the royalties paid out by enterprises in the gold sector (1.3 per cent in 2002), as
well as the relative control of government spending (23.7 per cent of GDP). It is expected that there
will be a deterioration for 2003 because of the increased expenditure involved in implementing the
PRSP, especially the planned recruitment in social services.
21. Mali has recorded an increase in revenue from duties and taxes on international trade from
CFAF 131.7 billion in 1999 to CFAF 180.4 billion in 2002, which is mainly attributable to the strong
increase in imports (28 per cent since 1997), despite the liberalization of trade within the WAEMU. In
2002, this revenue was composed as follows: 23.7 per cent in the form of customs duties; 1.6 per cent
as taxes (statistical fee (RS) and community solidarity levy (PCS)); 46.5 per cent for the value added
tax (VAT) and the tax on the supply of services (TPS); 16.7 per cent for the tax on petroleum
products; and 5.4 per cent for export taxes. In all, 46.3 per cent of budgetary revenue (excluding
grants) was levied by the customs in 2002, a slight decrease in comparison with 1999.
22. Since the first review, Mali has also enhanced the institutional framework for drawing up,
implementing and monitoring the budget by adopting the decree determining the new budgetary
nomenclature and the State’s harmonized accounting plan on 1 January 2003, in accordance with the
relevant WAEMU regulations, and, in addition, by adopting a manual on government spending
procedures.20This reform enhances transparency and good governance in government finance, as well
as budgetary management as a whole, by combining operating and investment expenditure in a single
budget.
(4) TRENDS INTRADE
Breakdown of trade
23. According to the statistics available (Table I.3)21, Mali’s exports are still as little diversified as
they were at the time of the first review of trade policy and the share of value added products
continues to be modest. With an increase from 40.6 per cent in 1998 to 71.8 per cent in 2002, gold has
made a sizeable contribution to export earnings. This change has mainly occurred to the detriment of
cotton (even though the volume exported increased), whose share fell from 44.1 per cent in 1998 to
19According to the provisions of Article 6 of Regulation No. 09/98/CM/UEMOA on financial relations
among member States of the WAEMU, investment, loans, deposits and in general all capital movements among
member States of the WAEMU are free and are not subject to restrictions, pursuant to Articles 76,
paragraph (d), 96 and 97 of the WAEMU Treaty and Article 4 of the WAMU Treaty.
20Directives Nos.5/97/CM/UEMOA, 6/97/CM/UEMOA, 4/98/CM/UEMOA, 5/98/CM/UEMOA and
6/98/CM/UEMOA, as amended.
21The composition and geographical structure of trade are difficult to circumscribe because of the
importance of informal channels.Mali WT/TPR/S/133
Page 7
17.7 per cent in 2002. The reason is the decline in global cotton prices, which are at their lowest level
since 1994.22
Table I.3
Principal exports by Mali, 1997-2002
Section 1997 1998 1999 2000 2001 2002
(US$ millions)
Total 544.2 590.5 571.0 524.8 713.6 865.3
(Percentage)
I Live animals and animal products 9.4 8.4 9.4 10.1 8.8 4.3
XI Textiles and textile articles 48.3 45.9 39.7 31.1 14.1 17.9
XIV Pearls or cultured pearls, gemstones and the like,
precious metals, costume jewellery, coins36.4 38.2 42.1 51.7 67.6 71.8
Other 5.9 7.5 8.8 7.1 9.5 6.0
Source: Malian authorities.
24. It is difficult to identify the destination of Mali’s exports because of the country’s landlocked
situation, which makes it necessary to transit through ports in the region. According to the information
available from importing countries, however, exports to America (mainly Mexico) have gradually
increased while those to Europe and Asia have decreased, which could be indicative of diversification
since the first review (Table I.4).
25. The composition of imports appears to have changed little and fuel, chemicals, and transport
machinery and equipment still occupy first place (Table I.5). The origin of these imports is essentially
still the same, with Côte d’Ivoire and France at the top (Table I.6). Trade between Mali and Côte
d’Ivoire could, however, see changes if the crisis in Côte d’Ivoire persists.
Table I.4
Destination of Mali’s exports, 1997-2002
(Percentage)
1998 1999 2000 2001
America 17.6 19.8 26.9 35.7
Europe 39.5 34.1 34.0 25.4
European Union 38.3 31.3 30.1 21.9
- Italy 21.0 12.5 7.5 5.6
- France 1.8 2.0 5.1 5.1
Asia and Middle East 30.0 34.2 23.3 25.0
Africa 12.0 7.9 10.3 11.8
Sub-Saharan Africa 6.3 4.4 7.2 9.1
- Ghana 0.0 0.0 1.2 4.7
Note: Statistics in this table have been drawn up on the basis of imports of Malian origin into other countries.
Source: UNSD Comtrade database.
22World Bank study on this question has identified as a cause the support policies in developed
countries and finds that the decrease has had a significant impact on Mali and on the other countries for which
cotton plays an important role in exports (Badiane, O., Ghura, D., Goreux, L. and Masson, P.R. (2002)).WT/TPR/S/133 Trade Policy Review
Page 8
Table I.5
Principal imports by Mali, 1997-2002
Section 1997 1998 1999 2000 2001 2002
(US$ millions)
Total 682.6 811.7 823.3 805.5 989.0 927.9
(Percentage)
II Plant products 4.8 8.1 6.4 4.3 3.9 6.4
IV Food industry products; beverages, alcohol and vinegar;
tobacco and manufactured tobacco substitutes 7.1 8.5 7.6 6.7 8.0 9.4
V Mineral products 22.2 18.2 17.1 25.4 24.4 23.3
VI Products of the chemical or related industries 15.2 15.2 14.4 11.8 10.5 16.5
VII Plastics and articles of plastic; rubber and articles of
rubber 2.2 3.3 3.4 3.0 3.6 3.8
XV Base metals and articles of base metal 6.7 8.5 9.1 7.6 7.3 6.3
XVI Machinery and appliances, electrical equipment 17.5 16.2 18.0 19.4 22.5 14.4
XVII Transport equipment 12.2 9.6 12.5 11.9 9.1 9.7
Other 12.1 12.4 11.5 9.9 10.7 10.2
Source: Malian authorities.
Table I.6
Origin of Mali’s imports, 1997-2002
(Percentage)
1998 1999 2000 2001 2002
America 9.6 8.8 9.0 11.3 9.6
United States 5.2 5.9 4.6 8.0 5.4
Europe 35.8 39.4 44.2 35.0 38.1
European Union 32.9 37.1 41.0 32.3 36.6
- France 20.9 21.2 23.6 17.5 18.7
- Belgium-
Luxembourg3.1 4.2 4.2 3.3 3.9
Asia and Middle East 13.3 13.9 13.4 12.7 11.6
China 3.2 4.2 3.9 4.5 2.7
Japan 6.3 4.3 4.4 4.1 4.1
Africa 41.2 37.0 31.4 39.2 40.1
Sub-Saharan Africa 38.9 34.4 28.4 35.2 35.1
- Côte d’Ivoire 29.1 26.5 22.1 24.8 23.1
- Senegal 6.0 6.7 4.7 6.3 6.4
Source: Malian authorities.
(5) OUTLOOK23
26. According to the Malian authorities, performance during the 2003-2004 agricultural season
has been better than expected (growth of 22 per cent in cereal production, for example), and
consequently the growth rate for Mali’s economy as a whole was around 5.6 per cent in 2003. This
rate is much higher than the rate expected in the light of the crisis in Côte d’Ivoire and offsets the
decline in gold production, which fell from its record level of 64 tonnes in 2002 to 52 tonnes in 2003.
Because of the abundant supply of the population’s basic foodstuffs, slight deflation (-0.8 per cent)
was noted. As regards the external economy, exports fell by 15.5 per cent between 2002 and 2003
according to the WAEMU Commission. This decrease is mainly due to the exceptional level of gold
23The main sources consulted were: WAEMU Commission (2003); IMF (2003a); IMF (2004).Mali WT/TPR/S/133
Page 9
exports in 2002, while imports continued to increase. Consequently, the trade surplus (on an f.o.b.-
f.o.b. basis) of CFAF 141 billion (US$235 million) recorded in 2002 is also an exceptional figure.
27. For 2004, Mali's authorities are hoping for an economic growth rate of 6.7 per cent. Such an
increase could be achieved if there is greater rainfall and projects to develop agriculture go ahead,
which would enable cotton and cereal production to improve their performance during the period. On
the other hand, the authorities expect gold production to decrease from 51 tonnes in 2003 to
46.8 tonnes in 2004. Industry will be sustained by expansion in cotton production and, consequently,
ginning of seed cotton. Construction and public works (for example, the building of roads, schools)
will also be a focus for growth in the secondary sector. Energy production could be revitalized as a
result of the reform in the sector.