Mali: Economic Outline

Economic Indicators

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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. However, the country’s GDP contracted by -1.6% in 2020 as a consequence of the global economic slowdown caused by the Covid-19 pandemic. Economic activity rebounded by an estimated 4% in 2021 and is expected to further accelerate to 5.3% in 2022 and 5% in 2023 (IMF), boosted by strong agricultural and mining sectors.

Mali’s public finances deteriorated due to the pandemic-induced economic slowdown and increased spending, and did not improve in 2021 despite the economic recovery. The debt-to-GDP ratio continued to increase, from an estimated 47.4% in 2020 to 51% in 2021, and is forecast to only slightly decrease to 50.6% in 2022 and 50.1% in 2023 (IMF). The public debt is mostly external and concessional, and relies on international lenders (Coface). Budget deficit increased from -5.4% GDP in 2020 to -5.5% GDP in 2021, and is forecast to narrow to -4.5% GDP in 2022, remaining above the WAEMU community criterion of 3% GDP (Coface). Revenues from gold mining and cotton production are expected to increase, but capital spending supporting major infrastructure projects will remain significant (Coface). Inflation increased from 0.5% in 2020 to 3% in 2021, but is forecast to decrease to 2% in 2022 and 2023, staying below the ECOWAS convergence criteria thanks to the CFA franc’s euro peg (IMF). The 2022 budget is focused on fiscal consolidation and implementation of the IMF program. In February 2021, the IMF Executive Board allowed for an immediate disbursement of about USD 57.6 million to help meet the country’s financing needs and support social spending, as part of a 3-year Extended Credit Facility with a total value of USD 192 million. With such funds, Mali is also 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 prices 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 the latest World Bank figures, 42.3% of Malians live in extreme poverty. Poverty is concentrated in rural areas (90% of all poor) and in the south of the country. According to ILO estimates, almost three-quarter of the economically active population work in the informal economy; whereas the unemployment rate in 2020 stood at around 7.7% of the total workforce (World Bank).

Monetary Indicators	2016	2017	2018	2019	2020
CFA Franc BCEAO (XOF) - Average Annual Exchange Rate For 1 GBP	800.68	749.15	741.42	732.38	737.93

Source: World Bank - Latest available data.

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Latest Update: February 2023