Mali

Economic Overview

The Republic of Mali is a vast, landlocked country in the heart of the Sahel region, facing severe and intertwined challenges of security, political instability, and economic development. Its economy is largely undiversified, heavily reliant on two commodities: gold and cotton. A deteriorating security situation, marked by an ongoing jihadist insurgency and the withdrawal of international partners, has severely impacted economic activity, particularly in the crucial agricultural sector, and has led to a major humanitarian crisis. The 2025-2026 outlook is highly uncertain, entirely dependent on the political and security trajectory.

GDP Size & Growth Trajectory

Mali's economic growth is volatile, impacted by security conditions, weather patterns affecting agriculture, and global commodity prices. The political instability and regional sanctions following recent military coups have also weighed heavily on the economy. The IMF projects growth to be modest, at around 3.8% in 2025, but this forecast carries a high degree of uncertainty given the fragile security and political context.

Sector Composition

• Agriculture: This is the foundation of the economy, contributing about 33% of GDP and employing over 70% of the population. It is dominated by subsistence farming and is highly vulnerable to drought. Cotton is the primary agricultural export, but production has been hampered by insecurity and climate factors. Livestock is also a major sub-sector.
• Industry: The industrial sector contributes around 20% of GDP and is almost entirely dominated by gold mining. Mali is one of Africa's largest gold producers, and gold accounts for the vast majority (over 70%) of export earnings.
• Services: The services sector accounts for roughly 40% of GDP and is primarily composed of informal trade, transport, and telecommunications.

Inflation Trends

High inflation has been a persistent issue, driven by supply chain disruptions from insecurity and regional sanctions, as well as high global food and fuel prices. Food price inflation has been a particular challenge, exacerbating the humanitarian situation. As a member of the WAEMU, the regional central bank's policies provide a nominal anchor, but domestic security issues remain the primary driver of price instability.

Fiscal & Monetary Policy Stance

• Monetary Policy: As a member of the West African Economic and Monetary Union (WAEMU), monetary policy is managed by the BCEAO. However, Mali's relationship with the regional body has been strained by political events and sanctions.
• Fiscal Policy: The government is under extreme fiscal pressure, with a large and growing share of the budget diverted to security spending. Domestic revenue mobilization is weak, and the country is heavily reliant on limited external financing and revenues from the mining sector.

Debt Sustainability Indicators

Mali is considered to be at a high risk of debt distress. The combination of weak economic growth, high fiscal deficits driven by security spending, and political isolation has put significant pressure on public finances. Access to traditional concessional financing has been complicated by the political situation.

Table 1: Key Macroeconomic Indicators (2023-2026F)

Market Size & Demand Potential

The formal domestic market is very limited due to widespread poverty, a large informal economy, and the ongoing security crisis.

Population Size and Demographics

With a population of over 25 million, Mali has a large and very young population, with a median age of around 16 years. However, this demographic potential is unrealized due to conflict, poor human development indicators, and lack of economic opportunities.

Urbanization and Consumer Hubs

The capital city, Bamako, is the main political and economic hub, where the limited formal economic activity is concentrated. Other historical centers like Timbuktu and Gao have been severely affected by the conflict, disrupting traditional trade routes.

Business Environment

The business environment is extremely difficult and high-risk.

Ease of Doing Business & Regulatory Reforms

Political instability, insecurity, and the recent withdrawal from regional bodies like ECOWAS have created a highly unpredictable and challenging environment for investors. Corruption and weak institutions are major hurdles. The country ranks very low on all global ease of doing business indices.

Political Stability & Governance

Mali is in a state of profound political and security crisis.

Political Environment

The country is under the control of a transitional military government that came to power through two successive coups (in 2020 and 2021). The government has ended its long-standing security partnership with France and the UN peacekeeping mission (MINUSMA), and has instead deepened its ties with Russia. It has also announced its withdrawal from the regional bloc ECOWAS, further isolating the country.

Rule of Law & Investor Protection

The rule of law is extremely weak, particularly outside of the capital. There is no reliable mechanism for contract enforcement or investor protection. While Mali is a member of the OHADA legal framework, the practical application of these laws is severely hampered by the political and security situation.

Infrastructure Readiness

Infrastructure is severely underdeveloped and has been further damaged by the conflict.

Transport and Logistics

As a landlocked country, Mali is dependent on corridors through its neighbors, primarily Senegal and Côte d'Ivoire, to access seaports. However, its withdrawal from ECOWAS and the associated political tensions and border closures have severely disrupted these vital trade routes, leading to major supply chain bottlenecks.

Energy Sector

Access to electricity is very low. The country relies on imported petroleum products and limited domestic hydropower. There is significant potential for solar energy, but the security and financial environment makes large-scale investment unfeasible.

Sector-Specific Opportunities

Given the extreme political and security risks, investment opportunities are minimal and largely confined to the existing mining sector, which operates in heavily secured enclaves.

1. Mining (Gold)

Gold mining remains the only significant area of foreign investment and the primary source of government revenue. The sector is dominated by a few large international mining companies that have long-standing operations. However, even these operations face heightened political and security risks.

2. Agriculture (Cotton & Livestock)

In a hypothetical post-conflict scenario, revitalizing the cotton sector (once a pillar of the economy) and the large livestock sector would be key priorities for economic recovery. However, this is not a viable prospect under the current conditions due to widespread insecurity in rural areas.