Mali Growth and Diversification

Abstract

This report describes the key policies for Mali to succeed leveraging growth with export diversification. For many decades, Mali has been a commodity-dependent country, mainly relying on gold and, to a lesser extent, cotton. However, the experience of other countries, in Africa and other parts of the world, shows that large scale production of minerals and oil resources offers great opportunities, but also presents major shortcomings. These are: tendency to growth beyond potential in cycles of booming prices; high GDP growth volatility that translates into a fragile fiscal stance; a resource curse that favors production of non-tradable goods; and a growth pattern biased toward rent-seeking activities, which prevents expansion of competitive activities creation of abundant and better jobs. Mali is no exception to this. Mali needs to structurally transform itself to accelerate growth and reach its vision, Mali 2025. The Government of Mali does not have a choice: without adequate jobs by 2025, Mali’s burgeoning youth population will foment more violence in an already fragile economy and keep investors away. Hence, it has outlined a strategy to achieve this vision centered on the diversification of its economy (and exports) away from natural resource-based commodities.