Economic Overview

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Despite major security concerns, Mali’s economy has enjoyed steady growth rates during these last years, supported by strong agricultural production (especially for cotton) and high gold prices. After contracting by 1.6% in 2020 as a consequence of the global economic slowdown caused by the Covid-19 pandemic, the GDP resumed its growth path in 2021 (+3.1%) but experienced a deceleration in its expansion in 2022 (at around +2.5%), due to sanctions imposed by both ECOWAS and WAEMU from January 9th to July 3rd. Specifically, the economy faced a trade embargo with other ECOWAS nations, restricting all products except for essential primary goods. According to the IMF, real GDP growth is projected to rebound to over 5% in 2023 and 2024 thanks to strong agricultural and gold output.

In 2022, the government fiscal deficit stood at approximately 5% of GDP, as a consequence of the swift growth in security spending, public wages, and interest expenses (these three factors account for almost 80% of fiscal revenues). Furthermore, the absence of external financial aid, alongside stricter financing conditions resulting from global monetary policy changes, has led to a rise in funding costs while the available sources of funding have decreased. In late 2022 and early 2023, Mali's government regional debt issuances experienced low subscription rates, possibly due to a tightening of the Central Bank of West African States (BCEAO) bank refinancing conditions. As a result, the need to reduce the fiscal deficit and move closer to the 3% fiscal deficit limit set by the West African Economic and Monetary Union (WAEMU) has become increasingly pressing. The debt-to-GDP ratio continued to increase, from an estimated 51.9% in 2021 to 55.9% in 2022, and is forecast to decrease only marginally to 55.8% this year and 55.3% in 2024 (IMF). The public debt is mostly external and concessional, and relies on international lenders (Coface). Inflation reached an average of 8% over 2022 but is expected to ease in line with international prices and the tightening of monetary conditions by the Central Bank of West African States (3% and 2.5% in 2023 and 2024, respectively). Over the next years, Mali is expected to implement a structural reform program aiming at improving public finances and debt management, while promoting economic diversification, energy infrastructure enhancement (electricity), and human capital improvement. However, political instability could compromise access to financing. The main challenges faced by the country are the fragile security situation, political instability, inadequate infrastructure, financial and governmental capacity constraints, commodity price volatility, and unfavourable weather conditions (drought).

Mali is classified as a heavily indebted poor country (HIPC) and, as such, it benefited from debt cancellation under the IMF's HIPC Initiative. According to World Bank's figures, 19.1% of Malians were living in extreme poverty in 2022, 3.2% more than one year earlier due to the erosion of the purchasing power of the most vulnerable, owing to soaring consumer prices and weak economic growth. Poverty is concentrated in rural areas (90% of all poor) and in the south of the country. According to ILO estimates, almost three-quarters of the economically active population work in the informal economy; whereas the unemployment rate in 2021 stood at around 2.6% of the total workforce (World Bank, latest data available). The IMF estimated the country’s GDP per capita (PPP) at USD 2,656 in 2022.

Foreign Trade

Mali has an open economy in which trade equals around 70% of the country’s GDP (World Bank, latest available data). Customs duties are relatively low (the average applied tariff rate is 12.3%), and there are very few legal or regulatory trade barriers. The country is a member of WTO, the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (WAEMU), whose objective is to reduce trade barriers through the creation of a common market. One of Mali’s primary objectives was to reach self-sufficiency regarding cereal production and to become the leading grain supplier for countries in West Africa. However, although it has achieved satisfactory results, Mali is yet to become a net exporter of cereals. Cotton production, on the other hand, has been on the rise over the last agricultural seasons, allowing Mali to become the largest supplier of cotton in Africa. The adoption of economic sanctions by ECOWAS and UEMOA in early 2022, including a trade and financial embargo and border closures, could negatively impact trade. According to data by ITC, in 2021, Mali’s exports comprised almost exclusively precious stones (95.7%, up by 91% year-on-year – mainly gold), followed by cotton (1.1%), and oil seeds (0.6%); whereas imports were led by mineral fuels and oils (21.6% of total imports), electrical machinery and equipment (8.8%), machinery (8.7%), and vehicles (8.7%).

In the same year, the bulk of Mali’s exports went to the UAE (77.7% of total exports), followed by Switzerland (14.4%), Australia (3.5%), China (1.4%) and Turkey (0.6%). Senegal (which accounts for 18.2% of Mali’s total imports) was the biggest supplier, followed by Ivory Coast (15.6%), China (10.5%), and France (8.5% - ITC, latest data available).

Mali’s trade balance is structurally in deficit and is largely dependent on commodity prices. According to figures by WTO, in 2021 the country’s exports of merchandise increased to USD 5 billion (from USD 3.9 billion in 2020), while imports of merchandise rose to USD 6.5 billion (from USD 4.8 billion one year earlier). Mali is also a net service importer: the value of commercial services imports stood at USD 2.3 billion against USD 513 million in exports. Estimates by the World Bank show that in 2021 the country’s trade balance was negative by 10.6% of its GDP (from 5.7% one year earlier). According to data from the national statistics institute, Mali's gold exports rose 8.4% in 2022 to reach 69.3 tonnes.