After decades of French colonial rule and a brief federation with Senegal, the Republic of Mali was established in 1960. Landlocked Mali’s economy is mostly confined to the area irrigated by the Niger River, but the government is encouraging diversification. Tax administration has been improved, and the cotton markets are moving toward privatization. Restrained public spending and stable monetary policy have stimulated a growing entrepreneurial sector.
Real GDP growth averaged 6.5% between 2014 and 2015 before slowing to 5.8% in 2016. The decline continued in 2017, to an estimated 5.5%, likely because of the primary sector’s underperformance (38% of GDP) due to a poor agricultural season. In the medium term, the economic outlook remains positive; real GDP growth is projected to be 5% in 2018 and 4.9% in 2019
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Mali is a leading producer of gold (the world’s tenth largest and Africa’s third), although prospecting for other minerals is on-going. Artisanal mining, which accounts for about ten percent of production has picked up in the last two years. Recent discoveries have tripled the country’s bauxite reserves. Mali has rich deposits of gold, bauxite, manganese, iron ore, limestone, phosphates and uranium. Oil and gas exploration has slowed down since 2012, although Mali has proven reserves of oil shale. Mineral deposits are primarily located around Kayes, Ansongo, Bafoulamé, Hombori, Tilemsi and western Mali. Gold production dominates Mali’s natural resource sector, with Mali being the third largest gold exporter in Africa. Gold is by far Mali’s most important export, comprising nearly 70% of total exports in 2016. The price of gold fluctuates with the world market price. The sector has experienced some difficulties as unproductive mines have been closed, and others face imminent closure. However, three new mines are expected to open this year with a capacity of 20 tons a year. Two smaller mines opened in 2015. Gold panning contributes approximately 10% of gold exports. Over two million people, representing more than 10% of the population, depend on the mining sector for income. Total Local Production: 2014(49.8 Tons) 2015 (50 Tons) 2016 (50 Tons) Mali also has other mineral prospects as the majority of the territory remains largely unexplored and unmapped. The Ministry of Mines estimates 800 tons of gold deposits, 2 million tons of iron-ore, 5,000 tons of uranium, 20 million tons of manganese, 4 million tons of lithium, and 10 million tons of limestone. As the government seeks to reduce dependency on gold and diversify the mining sector, foreign firms have a unique opportunity to support this expansion. Mali has also formalized and reformed the process of registering and delivering research and exploitation permits to mining companies.
Laws and Regulations
Mining is currently regulated by the Mali's 2012 Mining Code, however, the Mali Mines Ministry announced a new mining code on 21 August 2019, ending exemptions from VAT for mining companies operating in the country. The code shortens the 30-year “stability period” during which mining companies’ existing investments are protected from changes to customs and fiscal regimes.
The new length of the stability period was not made clear in the announcement, but in 2018 the Economy Ministry stated the government was aiming to reduce it to the lifespan of a mine. In a statement, the Mines Ministry said the code intended to address the “shortcomings” of legislation passed in 2012 by contributing a “substantial increase” in the mining sector’s contributions to Mali’s economy. The new mining law passed by ordinance in August. The next stage is parliamentary review, where additional revisions are expected before a final version is agreed.
The new legislation establishes a mining fund for local development. The government will pay in 20% of the royalties it receives from gold production (currently set at 3% of the value of gold produced); mining companies will contribute 0.25% of turnover.
Mining licenses are awarded on a ‘first come first served’ basis. Production sharing contracts in oil and gas are concluded on the same basis, although only exploration licenses have been awarded to date.
While labour is widely available in Mali, skilled labour is rather limited which may be as a result of the literacy rates in Mali. According to the World Population Review Mali has a literacy rate of 38.7% with a population of over 20,000,000 people.
According to the UNESCO Institute for statistics 69% of Mali children of primary school age are enrolled in primary school and 36% of secondary school-aged students are enrolled in secondary school. These statistics correlate with the economic and accessibility barriers keeping many students from obtaining a higher secondary education.
The Government is making efforts to increase the sector and education is considered a fundamental right of Malians.
The interim education sector plan, the programme interimare de reliance du secteur de l'education et de la formation professionnelle (PIRSEF)covers 2015-2016 and has been extended till the end of 2017. It is focused on improving quality, access, and governance in the education sector.
The PIRSEF encompasses three main components:
- Improve the quality of teaching and learning by improving professional qualifications for learners, adapting training offerings, and promoting scientific research.
- Improve access to education by building and rehabilitating more facilities, recruiting teachers, fostering social mobilization and stakeholder involvement, and promoting inclusive education.
- Strengthen the governance of education and vocational training by involving communities in school management, supporting the monitoring and evaluation system, and supporting the preparation of a Ten Year Education Sector Plan.
The Government is in the process of developing and releasing a new sector plan following in the direction of PIRSEF.