MALI

Key conditions andchallenges

Table 12023

Population, million

23.3GDP, current US$ billion

21.8

GDP per capita, current US$936.3

International poverty rate ($2.15)

a20.8
a56.1

a85.9

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a35.7

School enrollment, primary (% gross)

b72.6

b58.9

Total GHG emissions (mtCO2e)48.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ Most recent WDI value (2021).

GDP growth stabilized at 3.5 percent(0.6 percent per capita) in 2023, below
expectations, due to lower agricultural
output and an electricity crisis, resulting in limited poverty reduction withan extreme poverty rate of 20.2 percent
in 2023. Growth is projected to weakenslightly in 2024. The outlook is subject
to downside risks from rising insecurity, increasing financing costs, impactsof the announced ECOWAS withdrawal,
and climate-related shocks.

Mali’s economy has experienced little
structural change over the last threedecades. Agriculture and low-productivity services dominate the economy;
manufacturing remains limited and concentrated in agro-industries and cotton
ginning. Exports are dominated by gold
and cotton and vulnerable to commodity-price and climatic shocks. GDP
growth per capita stagnated during thelast decade limiting poverty reduction,
while human development indicatorsshow mixed results.
Insecurity, a weakened social contract,
and the absence of the State in remoteareas, and limited investment are key
bottlenecks for inclusive growth. Political instability following the two coupd’états in 2020 and 2021 has also become a significant growth constraint.
In September 2023, Burkina Faso, Mali,
and Niger formed the Alliance of Sahel States (AES), a security and military pact with political and economic
aims. On January 28, 2024, in a joint
communiqué, the three countries announced their ‘immediate’ withdrawal
from ECOWAS. According to the revised ECOWAS Treaty, a notification
period of one year is required toleave ECOWAS. These developments
have increased political and policy
uncertainty, including the timetablefor elections in Mali.

Recent developments
GDP growth stabilized at 3.5 percent in2023, less than initial projections, due tolower food agricultural production, which
was impacted by insecurity and unfavorable weather conditions. The second major
contributor was the electricity crisis starting in August 2023 with shortages due to alarge accumulation of arrears to suppliers
disrupting manufacturing. Industrial output was also dampened by the effects ofthe 2022 unsuccessful cotton season on
ginning industries. The service sector remained resilient, supported by telecommunications and public services. On thedemand side, growth was supported bypublic and private consumption, in contrast to public investment and net exports,
which underperformed. The terms of trade
improved in 2023 as commodity prices ofenergy and food imports eased. This wasoffset by lower exports as cotton exports
declined 13.5 percent on the back of lower
production in 2022, and the recovery of import demand after the lifting of the 2022
ECOWAS sanctions. As a result, the current account deficit remained high at
6.8 percent of GDP.
After surging to a record high of 9.7 percent in 2022, inflation declined to 2.1 percent in 2023, due to strong 2022 agricultural production and the easing of international commodity prices. As a result, theextreme poverty rate has decreased by 0.8
percentage point to 20.2 percent in 2023.
However, the humanitarian situation remains serious, with over 350,000 internally

FIGURE 1 Mali / Real GDP growth, current account andfiscal balances

FIGURE 2 Mali / Actual and projected poverty rates and real
GDP per capita

Percent, percent of GDP
6Poverty rate (%)

Real GDP per capita (constant LCU)

100270000

904260000

8027025000060050-2240000

40-4230000

3020-6220000

10-82018

20192020

2021

02022 2023e 2024p 2025p 2026p

Fiscal balanceReal GDP growth

2100002009 2011 2013 2015 2017 2019 2021 2023 2025

Current account balance

Sources: Malian government and World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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1Apr 24

displaced persons due to insecurity, inaddition to an estimated 715,000 people facing severe food insecurity as ofDecember 2023.
To counter inflation across WAEMU countries, the Central Bank of West African States(BCEAO) raised policy interest rates by a cumulative 150 basis points since mid-2022 to
3.5 percent for liquidity calls and 5.5 percent
for the marginal lending facility. However,inflation in the region (3.7 percent in 2023)
was still above the 1-3 percent target range
and foreign exchange reserves have been on
a downward trend, estimated at 3.5 monthsof imports at end-2023, down from
4.3 months at end-2022.
The fiscal deficit stabilized at 4.8 percent
of GDP in 2023, while public debt slightly
increased to 52.1 percent of GDP. Though
the risk of debt distress remains moderate,
there are increasing fiscal risks from theelectricity sector with contingent liabilities(arrears) of 4.6 percent of GDP. Tax revenues recovered in 2023, supported by digitalization reforms, and higher indirect collections, boosted by the recovery of tradeflows. Public wages (8.8 percent of GDP)and security spending (6.4 percent of GDP)

continued to increase and crowd out public investment (4.2 percent of GDP). The
fiscal deficit was financed predominantly
by the increasingly expensive regionalbond market, where Mali’s average yields
on 12-month treasuries reached 9.4 percent
in February 2024.

Outlook
Growth is projected to weaken slightly to
3.1 percent in 2024 and average 4 percent
over 2025-26 – below the long-term potential rate for the economy of 5 percent – reflecting the combined effects of the electricity crisis and the expected impacts of anorderly ECOWAS withdrawal: lower tradewith non-WAEMU ECOWAS states, higher
investors’ risk premia, and increased regional financing costs.
The fiscal deficit is expected to decline to 4.1
percent of GDP in 2024, before graduallyconverging towards the WAEMU ceiling of
3 percent by 2026, as the government consolidates in the face of high financing costs. The
current account deficit is expected toTABLE 2 Mali / Macro poverty outlook indicators

gradually decline over 2025-26 with thecoming onstream of lithium production.
Due to the weak growth in GDP per capita,
particularly in agriculture and service sectors, the extreme poverty rate is expected
to decline only slightly - by 0.9 ppt over2023-2026 - and will result in nearly 76,500
additional extreme poor per year.
The outlook remains subject to significant
downside risks, including rising insecurity
from the exit of the 13,000 MINUSMA
peacekeeping force in 2023 and the endof the Algiers peace accord, a persistentelectricity crisis, climatic shocks, and thewithdrawal from ECOWAS. An unnegotiated ECOWAS withdrawal with disruptions to transport, transit and free movement of goods, services, capital, and labor
could exacerbate negative impacts due tospillovers onto WAEMU trade. TheBCEAO may need to continue monetary
tightening in 2024 to bring inflation undercontrol and in the context of increased
risks from the withdrawal of Niger, Mali,and Burkina Faso from ECOWAS. A further increase in the cost of financing could
lead to Mali further cutting investment expenditure to reduce its borrowing needs.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
3.1
3.0
5.8
4.8
-1.0
14.12022
3.5
4.0
7.6
1.0
18.1
0.7

2023e
3.5
3.9
16.7
-3.6
-3.9
2.3

2024f
3.1
3.8
-0.2
4.7
2.8
3.9

2025f
3.5
3.9
0.8
4.5
4.3
4.3

2026f
4.5
4.1
-1.0
9.2
5.1
4.3

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

3.0
1.4
1.0
5.1

4.3
2.4
3.7
5.8

3.4
2.3
2.0
4.9

3.1
3.6
3.0
2.8

3.5
4.5
3.5
2.8

4.5
4.5
3.5
4.9

Inflation (consumer price index)

4.0

9.7

2.1

2.5

2.3

2.0Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-7.7
3.0

-7.0
2.6-6.8
2.4

-6.0
3.0

-5.8
2.9

-4.8
2.7

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-4.9
22.0
50.4
-3.5

-4.8
19.8
51.8
-3.4

-4.8
20.8
52.1
-3.1

-4.1
20.8
52.6
-2.2

-3.2
21.9
52.8
-1.4

-2.9
20.5
53.4
-1.2

20.8
56.1
85.9

21.0
56.4
86.1

20.2
54.7
84.3

20.1
54.6
84.1

19.954.2
84.1

19.3
53.5
83.8

4.0
8.5

3.3
9.0

2.7
8.6

3.6
8.4

4.0
8.3

4.2
8.4

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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