Mali's economy and business are characterized by the
country being one of the world's poorest. The country has
limited natural resources, and its agricultural-based
business is vulnerable to fluctuations in precipitation and
international commodity prices. More than 80 per cent of the
population is employed in agriculture.
COUNTRYAAH, Mali is one of Africa's largest countries by far. Just
over half of the country is desert and half desert. The
Niger River cuts through this landscape and represents a
rich resource in an otherwise scarce area.
In central Mali, in the Mopti region, the river extends
over an area of up to 30,000 km2. This is the
Niger Delta's inland delta which is very important for
Mali's economy and business. Here there are rich fishing
resources. Rice is grown over large areas and during the dry
season this delta represents a key resource for the hundreds
of thousands of livestock grazing on the savannah during the
rainy season. In November, the animals return to the delta
from all directions to graze on a particularly nutritious
plant called "burgu" and which grows in the flooded areas.
This pasture plant lives on the animals until the next rainy
season begins in June. The access to grazing in the delta is
based on old custom and is finely organized where each flock
receives their own number in the series. There are only a
few "entrance gates" to the delta where all the flocks must
pass. It is announced in advance, including through local
radio, which dates the various entrance gates will be open.
In the 1970s and 1980s, Mali was hit hard by drought.
This had a negative impact on economic and social
development, and it led to increased migration to the cities
- including the nomadic population. But part of this labor
migration has been temporary. After the drought of the
1980s, rainfall has picked up again, formerly desert-like
areas have turned green again, and many have moved back to
the countryside to once again cultivate the land or farm
animals. Several small towns in the north are dynamic
trading centers in 2017 despite the political and economic
crisis in Mali caused by Islamist militant groups taking
control of half the country.
Mali's formal sector is small, and there are few jobs in
the cities as well. A significant number of Malayans -
usually around 3 million - therefore find employment in
neighboring countries, where they are mostly employed in
agriculture, often on a seasonal basis; many illegally. The
unrest in the Ivory Coast from 1999 led many Malian guest
workers to return home, with the consequences it had for the
local economy. In other areas too, including transport of
goods to and from ports, the war in Côte d'Ivoire has had a
negative impact on Mali's economy.
Mali experienced significant economic growth from the
1990s until the crisis in 2012, but the country is
vulnerable to drought. Agriculture has also for some years
been hit by large swarms of grasshoppers eating the crops.
Mali is also exposed to higher oil prices, and to
competition from subsidized cotton, especially from the
United States. For the small farmers in the southern part of
the country, cotton is the most important cash crop. Cotton
is the second most important export item from Mali. Only
gold gives more income to the country.
Mali rejoined the West African-French Monetary
Cooperation in Union Monetaire East Africa (UMOA),
reintroducing CFA as its monetary unit in 1984. A 50 percent
devaluation of CFA that took place in 1994 promoted
agriculture, which is also prioritized by the country's
authorities. In 1982, the Mali government signed an
agreement on structural adjustment with the World Bank and
the International Monetary Fund. By this agreement, the
government undertook to implement economic liberalization,
including the privatization of a business sector in which
the state has had major ownership interests.
With its rich history and culture, tourism was also a
growth industry until the current crisis made it unsafe for
foreigners to travel to the central and northern parts of
Mali is above all an agricultural country, with over 80
per cent of the population employed in agriculture, partly
with arable farming especially along the rivers, and partly
with animal husbandry, especially in the arid areas of the
north. In the early 2000s, the sector responded to approx.
1/3 of the gross domestic product.
Agricultural products accounted for approx. 40 percent of
total export value at the end of the 1990s, but dropped to
approx. 30 per cent in the early 2000s, mainly as a result
of increased gold exports.
The most important product is cotton, which both employs
approx. 3 million people and is by far the most valuable
export item from agriculture. In the early 2000s, Mali
challenged Egypt as Africa's largest cotton producer. Cotton
is produced substantially in the south of the country and
most of the crop is exported. Due to large subsidies to
cotton producers in the US, countries such as Mali - even
with their low production costs - find it difficult to
compete with US cotton on the world market. Also peanuts
(peanuts) are grown in the south, mostly for export.
For the people of the north, including nomadic people,
animal husbandry has always had a prominent place. The
export of live animals to neighboring countries in the south
is of great economic importance, and ranks in value by gold
and cotton. Animal husbandry represents approx. 1
/ 3 of the agricultural sector's contribution to
gross domestic product.
Increased investment in several gold mines from the
1990s, strengthened the mining's economic importance to the
country's economy. This sector represented 17 per cent of
the gross domestic product in 2002. Mali has known deposits
of several minerals, including bauxite, diamonds, phosphate,
copper, iron, manganese, uranium and gold. Due to poorly
developed infrastructure and the long distance to ports,
there is still little recovery of these resources. Next to
gold, some salt, marble and phosphate are extracted. There
are unexploited deposits of iron ore, bauxite, uranium,zinc,
copper and manganese.
Following the opening of the Morila field in 2000, Mali
assumed the position of Africa's third largest producer of
gold (after South Africa and Ghana). Most of Mali's gold
comes from mining, which is a relatively inexpensive way of
extraction and has made it attractive to invest in the
country. In 2000, gold was Mali's most important source of
export revenue for the first time.
A limiting factor for the mining sector, as well as for
agriculture and industry, is the lack of energy. Large parts
of the country are not electrified, and there is often a
shortage of electrical energy. After the hydropower plants
Manantali, Félou and Gouin along the river Senegal became
operational respectively in 2001, 2014 and 2017, the
electricity supply improved significantly. These are
projects that supply Mali, Mauritania and Senegal with
electrical energy, and where Mali has a contractual right to
55 per cent of production. More than half of the power
produced in Mali now comes from hydropower plants.
Mali has a small industrial sector, with operations in
the capital Bamako. The sector consists of food companies,
which mainly process agricultural products, as well as some
production of building materials and other consumables. The
industry is weak, partly because of a lack of capital.
Inadequate power supply and poor communication network have
also helped to prevent industrial growth.
Mali normally has a large trade deficit abroad, which is
largely covered by financial support from France. Mali has
one of the world's most aid-dependent economies. France is
the main aid provider, but the EU, Canada, Germany and Japan
are also major contributors. Norway started its governmental
public assistance commitment in Mali in 1984. The main
export goods are gold, cotton and live animals. Imports are
composed of foodstuffs (including cereals), oil products,
machinery and vehicles. The main trading countries are
France and the Ivory Coast.
Transport and Communications
The great distances are a problem for Mali's political
and economic integration, as well as for foreign trade. Mali
has no coastline, and until the Civil War in Ivory Coast,
from 1999, most of the foreign trade went over the port of
Abidjan. The main road between Bamako and Abidjan is the
most important connection with abroad, but also the
approximately 1300 km long railway from Bamako to Dakar in
Senegal is important, and handles some foreign trade.
Following the actual divide of the Ivory Coast in 2002,
trade was also diverted to Tema in Ghana and Nouakchott in
Mauritania - with the extra costs this entailed. Apart from
the few main roads, the road network is poorly developed,
consisting of approx. 20 000 km.The Niger River is an
important transport year, but not passable outside the rainy
season. Bamako has an international airport.