The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses. The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption. The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
Investment Climate Statement (ICS) – Executive Summary
[Updated to reflect developments as of July 2023]
Despite enthusiasm for U.S. investment, there are significant obstacles to investing in Mali, including political instability, allegations of corruption, poor infrastructure, and ongoing insecurity throughout the country. Mali remains under transition government rule after a coup d’etat in August 2020, followed by a further consolidation of military power in May 2021. Mali is awaiting key electoral milestones that are to return Mali to constitutional rule and democratic governance by February 2024 – including presidential and legislative elections as well as a constitutional referendum – although observers have noted major challenges in this timeline. In addition to the very fragile security situation and delays related to the adoption of necessary institutional reforms, the intricate sociopolitical environment constitutes an important threat to the return to normal constitutional order. The uncertainty surrounding these dynamics clouds the appeal of much-needed greenfield investment.
The U.S. Department of State maintains a “Level 4: Do Not Travel” travel advisory for Mali due to crime, terrorism, and kidnapping. Continued insecurity throughout Mali is exacerbated by the minimal presence of the state in many areas and has permitted terrorist groups to conduct attacks against Western targets and Malian security forces. Intercommunal violence stemming from conflict between livestock herders and crop farmers in central Mali further contributes to instability.
Mali depends on bilateral donors and multilateral financial institutions, including the World Bank, International Monetary Fund (IMF), and African Development Bank, to fund major development projects, particularly in health, infrastructure, education, and agriculture. Mali received significant financial support in 2020 to address the COVID-19 pandemic and to support post-pandemic economic recovery. Since then, however, donors such as IMF, the World Bank, Denmark and France have partially or fully interrupted their development support to Mali, intensifying the financing needs.
The COVID-19 crisis interrupted a five-year period of consistent growth. As a result, Mali’s growth in 2020 decreased to 0.7 percent against an initial projection of five percent. The transition government took measures to support households and businesses amid this economic slowdown, further increasing its fiscal deficit, which reached 6.2 percent of GDP in 2020, against an initial projection of 3.5 percent.
In 2021, the hope of a post-COVID recovery prevailed, the Central Bank for West African States (BCEAO) projected for Mali a GDP growth of 5.7 percent and average inflation of 2 percent. Transition authorities had projected a 5.5 percent growth rate with inflation of 2 percent for 2022. Transition authorities were relying on these positive projections to reduce fiscal deficit and maintain a sustainable level of debt ratio to GDP. However, the hope for a strong and sustained post-COVID recovery was called into question when ECOWAS and WAEMU introduced severe sanctions in early 2022, disrupting traditional trade corridors, provoking shortfalls of the main imported goods, and putting pressure on government finance. The Russian invasion of Ukraine exacerbated the economic downturn, resulting in increased inflation and slower growth. According to the IMF, GDP growth decelerated to 3.1 for 2021 and could decelerate to 2.5 percent for 2022, while the BCEAO estimated the average inflation rate to 9.7 percent for 2022, the highest level since the 1990s.
Business contacts report both Malian and foreign businesses face corruption in procurement, customs procedures, tax payment, and land administration, although the transition government has committed to undertaking reform, including through improved public financial management practices and increased tax revenues. Efforts to strengthen revenue collection agencies, particularly customs, are ongoing following significant revenue shortfalls in 2018 that the IMF attributed to corruption, weak taxpayer compliance, and fraud. Malian businesses generally view U.S. products favorably and openly search for new partnerships with U.S. firms, particularly in infrastructure, energy, mining, and agriculture. Investors may consult the website of Mali’s Investment Promotion Agency (API-Mali) at https://apimali.gov.ml/wordpress/
To access the ICS, visit the U.S. Department of State Investment Climate Statements website.