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Mali2012

MaliReal economic growth ground down to 1.1% in 2011 following a fall in agricultural production and a seriesof external shocks (the post-election crisis in Côte d’Ivoire, the Libya war, and the rise in oil, gas and foodprices). Despite the coup in March 2012, growth is expected to reach 6.9% in 2012 and 5.2% in 2013,provided that the crop year is good, gold and cotton prices rise and trade with Côte d’Ivoire increases.

However, the strong rate of population growth combined with political instability could have a negativeimpact on the country’s socio-economic indicators.

The results of the national employment policy and initiatives such as the youth-employment programme(YEP) are below expectations. Unemployment hits young people hardest, with the rate standing at 15.4%for 15‑39 year olds. Young job seekers represent 81.5% of all unemployed people.

Overview

Mali experienced a sharp decline in agricultural production in 2011 due to irregular rainfall and its unfavourabledistribution in time and place. This was compounded by external shocks, including the post-election crisis inCôte d’Ivoire, the Libya war and rising oil and food prices. Real gross domestic product (GDP) growth stood at1.1% in 2011. The poor performance was mainly due to the decline in food production (‑16%), which representsalmost a quarter of GDP, and especially in rice production (‑25%). Growth is expected to reach 6.9% in 2012and 5.2% in 2013, provided that the crop year is good, that gold and cotton prices rise and that trade withCôte d’Ivoire increases. But forecasts for 2012‑13 are overshadowed by uncertainty as a result of politicalupheaval following the coup and the violence that broke out at the start of 2012.

In 2011, GDP growth was sustained primarily by cotton production and trade, but also by textiles, foodprocessing, transport, telecommunications and livestock farming. On the demand side, consumption and exportsof cotton and gold drove growth.

Youth unemployment is a critical problem in Mali. Unemployment stood at 9.6% in 2011 but was as high as15.4% for 15‑39 year olds. There are a number of causes of this, including low economic growth, rapidpopulation increase (3.6% a year), the size of the young population, lack of suitable job training, the ruralexodus, and the low absorption capacity of the formal sector.

In 1998, Mali designated employment a central pillar of human development and an effective means ofcombating poverty. This policy is implemented through several projects and programmes, including a youthemployment programme (PEJ) and a ten-year vocational training development programme (PRODEFPE).Despite these initiatives, the results achieved in terms of job creation are below expectations. Thegovernment’s long-term solution to the unemployment crisis involves addressing the structural causes ofunemployment by implementing pro-active policies aimed at markedly increasing the growth rate of theeconomy, strongly reducing population growth and training young people in sectors that correspond to theneeds of the economy.

African Economic Outlook 2012 2 | © AfDB, OECD, UNDP, UNECA

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Figure 1: Real GDP growth (Western)

Figures for 2010 are estimates; for 2011 and later are projections.

Table 1: Macroeconomic Indicators

2010 2011 2012 2013

Real GDP growth 5.8 2.7 3.5 5.1

Real GDP per capita growth 2.8 -0.3 0.5 2.1

CPI inflation 1.4 3 3.8 2.2

Budget balance % GDP -2.7 -1 -3.5 -3.4

Current account % GDP -7.5 -5.4 -3.1 -4.7


Real GDP growth (%) Western Africa - Real GDP growth (%) Africa - Real GDP growth (%)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

2%

4%

6%

8%

10%

Real

GDP

Gro

wth

(%)


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Recent Developments & Prospects

Table 2: GDP by Sector (percentage of GDP)

2006 2011

Agriculture, forestry, fishing & hunting 36.7 41.1

Mining and quarrying 8.3 7.6

of which oil - -

Manufacturing 9 5.4

Electricity, gas and water 2.1 2.2

Construction 5 5.7

Wholesale and retail trade, hotels and restaurants 14.5 15.6

of which hotels and restaurants - -

Transport, storage and communication 5.4 5.9

Finance, real estate and business services 0.4 0.3

Financial intermediation, real estate services, business and other service activities - -

General government services 11.2 9.2

Public administration & defence; social security, education, health & social work - -

Public administration, education, health - -

Public administration, education, health & other social & personal services - -

Other community, social & personal service activities - -

Other services 7.4 7.1

Gross domestic product at basic prices / factor cost 100 100


Real GDP growth was estimated at 1.1% in 2011, boosted mainly by secondary and tertiary sector growth of8.3% and 3.8% respectively, while the primary sector contracted 5.8%. Forecasts predict growth of 6.9% in2012 and 5.2% in 2013, based on good agricultural yields and rising gold and cotton prices. But theseprojections could be affected by the uncertainty regarding the country's political future created by events inearly 2012.

Negative growth in the primary sector in 2011 was the result of a fall in agricultural production (‑11.6%), andespecially in rice production (‑25%). Strong cotton sector growth (66%) helped to limit the shortfall, however.The 2011/12 agro-pastoral season saw rainfall arrive late and end early, reducing crop production and causing afood crisis to start in December 2011. Livestock farming, which employs around 30% of the working population,showed 4% growth in 2011 and accounted for 9.0% of GDP. Having shown strong growth in 2011, cottonproduction is expected to stabilise in 2012/13, while food production is expected to grow by 20% in 2012. As aresult, the primary sector as a whole is expected to record growth of around 12% in 2012/13, while agriculturalproduction alone is expected to grow by around 18%.

The secondary sector grew by 8.3% in 2011 thanks to growth in the textile (+31%) and food-processing(+18.6%) industries. The upward trend in international gold prices combined with the opening of new goldmines (most notably in Kodiéran and Tabakoroni) during the second half of 2011 make the outlook good for2012/13, with growth projected at 10% for the extraction industries and 8% for the secondary sector as a


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whole.

The 3.8% growth recorded in 2011 in the service sector was based mainly on trading, which is one of thelargest sub-sectors of the economy and accounted for 15% of GDP, followed by transport andtelecommunications. The vitality of these activities has been bolstered by the increase in the privateconsumption of households but has been held back by social upheaval affecting the Bamako-Abidjan roadcorridor. In 2012/13, growth should reach 6.5% in the trading sub-sector and 7% in transport andtelecommunications will remain at 7% thanks to an expected increase in trade with Côte d’Ivoire.

On the demand side, consumption is the main driver of growth, followed by exports. Spurred by privateconsumption by households, overall consumption rose by 2.8% in 2011 thanks mainly to civil service pay risesand recruitment in education, health, the army and security activities. However, private consumption has beenless dynamic than initially expected because of a fall in remittances from Malians abroad, which are a majorsource of household income. Gross investment contracted by 6.2% in 2011 to around 21.1% of GDP. Thisdecrease is not related to fixed capital, which rose 7%, but to a reduction in stocks resulting from a decline inproduction. Infrastructure attracted most investment in 2011, taking a 33% share of all financing. Investmentwent to major road projects aimed at opening up the country internally and externally, to human resourcesprojects in education, health and employment, and to water and energy supply and the rural economy.


Macroeconomic Policy

Fiscal PolicyIn December 2011, the Malian government adopted a new growth and poverty reduction strategy framework(GPRSF) for 2012‑17. The medium and long term goal is to “make Mali an emerging country and an agriculturalpower with a good quality of life for its people, both men and women”.1 Overall, the implementation ofmacroeconomic policy in 2011 was satisfactory. In December 2011, the executive board of the InternationalMonetary Fund (IMF) completed its seventh review of the Mali programme and the extended credit facility(ECF) supporting it. This resulted in the release of 6 million special drawing rights (SDRs) and the adoption of anew three-year ECF agreement. In 2011, Mali met four of the eight criteria set out in the West AfricanEconomic and Monetary Union (WAEMU) economic convergence programme, including three of the top-levelcriteria. The four criteria met were those relating to average annual inflation, public debt as a percentage ofGDP, internalm and external payment arrears and investment financed by domestic resources as compared tofiscal revenue.

The 2011 budget was passed in a difficult macroeconomic environment, and subsequently a series of externalshocks forced the government to pass a law adjusting the budget. Overall, the key budget goals were achieved.The underlying primary balance, excluding expenditure on state telecommunications company SOTELMA(Société des télécommunications du Mali), showed a deficit of 0.3% of GDP in 2011, even though the amendedbudget had provided for a 1.4% deficit. The budget deficit improved in 2011 to 1.0% of GDP thanks to good taxrevenue, good control of expenditure on salaries, and underspending on other current expenditure andinternally financed capital expenditure. The deficit is expected to worsen in 2012 due to the cost of holdingelections and managing the crisis in the north of the country. The deficit is forecast to reach 3.7% of GDP in2012 and 3.5% in 2013. At the same time, the tax burden (14.8% of GDP in 2011) has increased a mere 0.2%and remains below the 17% WAEMU threshold. General budget support disbursed by technical and financialpartners amounted to XOF 86.9 billion (CFA Franc BCEAO) in 2011.

Total expenditure and net lending increased by 11.1% to reach XOF 1.424 trillion in 2011. This was mainly aresult of a 1.7% increase in current spending as a percentage of GDP, itself caused by additional transfers toenergy company Énergie du Mali, spending on the repatriation and settlement of migrants from Côte d’Ivoireand Libya, an increase in lending to agriculture and spending on preparations for the 2012 elections. Spendingon social sectors (especially education and health), which remain a priority, represented 32.4% of 2011 budgetspending and 33.5% of spending in 2012. Capital spending, 53% of which is financed from abroad, represented7.0% of GDP in 2011 and is expected to fall to 6.8% in 2012 before curving back up to 7.2% in 2013. Thecurrent spending structure does not sufficiently support economic growth and results suggest it is not veryeffective in the social sectors.


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Table 3: Public Finances (percentage of GDP)

2003 2006 2007 2008 2009 2010 2011 2012 2013

Total revenue and grants 20.2 54.4 19.5 19 21.7 20.2 22.2 19.4 19.5

Tax revenue 14.2 14.7 14.2 13.3 14.7 14.6 14.5 14 14.1

Oil revenue - - - - - - - - -

Grants 4.6 38.9 4.6 3.4 4.6 2.9 5 2.8 2.8

Total expenditure and net lending (a) 22.5 24.0 24.7 21.2 25.9 22.9 23.1 22.9 23

Current expenditure 14.4 13.9 14.5 13.4 14.7 14.6 16.3 16.6 16.1

Excluding interest 13.7 13.4 14.1 13.1 14.3 14.2 15.8 16 15.6

Wages and salaries 4.3 4.6 4.8 4.8 5 5 5.3 5.7 5.7

Interest 0.8 0.5 0.4 0.4 0.4 0.4 0.5 0.6 0.5

Primary balance -1.5 30.8 -4.8 -1.9 -3.9 -2.3 -0.5 -2.9 -2.9

Overall balance -2.2 30.4 -5.2 -2.2 -4.2 -2.7 -1 -3.5 -3.4


Monetary PolicyMali belongs to the WAEMU, and its monetary policy is conducted by the Central Bank of West African States(CBWAS). The central bank adopts a prudent monetary policy in the region to control inflationary pressures,stabilise the real exchange rate of the CFA franc vis-à-vis the euro and keep exports competitive. The moneysupply grew by 11% in 2011 thanks to lending to the economy and to the State. In addition, the government iscontinuing to reduce the use of loans from commercial banks, which amounted to 1.3% of GDP in 2011. Creditto the private sector, meanwhile, grew to 8.5% of GDP. Lending rates have remained relatively high over thepast few years, reaching 9.58% in 2010, compared with a WAEMU regional average of 8.11%. Deposit rates,meanwhile, have remained almost stable since 2008, falling only slightly from 5% in 2008 to 4.86% in 2010, justbelow the WAEMU average of 5.12%. Inflation reached 3% in 2011 due to rising cereal prices following a dropin production, an increase in transport costs due to the Côte d’Ivoire crisis and higher prices for petroleumproducts. Inflation is forecast to stay close to 3% in 2012.

Economic Cooperation, Regional Integration & TradeExports rose by 19.7% in 2011 as cotton-fibre sales shot up by 113.3% and gold sales expanded by 16.5%. Goldexports were boosted by greater production at several existing mines and the opening of new mines, as well ashigher international prices. Imports of goods increased 15.3% in 2011 because of higher prices for importedpetroleum and food products. Remittances from Malians living abroad fell back slightly in 2011 due to crises intheir countries of residence, including, notably, the developed world and Libya. The current account deficit,including grants, was estimated at 5.2% of GDP in 2011. This deficit was financed by net capital inflows, mainlyin the form of foreign aid and foreign direct investment. The deficit is projected to fall to 4.0% in 2012 beforeexpanding to 5.7% in 2013.

As regards financial transactions, net capital flows fell in 2011 to XOF 198.2 billion due to the scant increase inpublic capital. Inflows of net direct investment rose to XOF 232.3 billion in 2011 under the impact of plannedinvestments at the Diamond Cement works, the Sukala sugar plant and on Millennium Challenge Accountprojects. There was a slight upturn in the balance of the capital and financial transactions account, which rose11.53% in 2011. The balance is projected to reach XOF 467.7 billion in 2012 and XOF 492.1 billion in 2013. Theoverall balance of payments showed a deficit equivalent to 1% of GDP in 2011.

Mali is an active participant in the regional integration initiatives led by the Economic Community of WestAfrican States (ECOWAS) and the WAEMU. The government has signed and ratified almost all agreements and


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protocols on regional organisation, integration and co‑operation. Mali is a stakeholder in the negotiations of theWorld Trade Organization (WTO) as part of the Doha Development Round. Mali’s main demands in thenegotiations remain: i) the elimination of cotton subsidies by developed countries as part of the Cotton Initiative(C4 group), ii) access to developed countries’ markets, iii) special and differential treatment for the leastdeveloped countries, and iv) trade aid.

Negotiations for an economic partnership agreement (EPA) with the European Union are led by ECOWAS withthe support of the WAEMU. The Malian authorities support the regional position, which calls for assistance,financial and otherwise, to offset the effects of the liberalisation which an EPA would engender before anyagreement is signed. In the public development aid (PDA) field, progress was made in 2011 on implementingthe Paris Declaration on Aid Effectiveness. However, no progress has been made in terms of co‑ordination andharmonisation with “non-traditional” donor countries, particularly China, India and Brazil, which areco‑operating increasingly with Mali.

Table 4: Current Account (percentage of GDP)

2003 2006 2007 2008 2009 2010 2011 2012 2013

Trade balance -1.4 1.2 -4.1 -7.3 -2.4 -3.3 0.2 3 2.2

Exports of goods (f.o.b.) 22 25.3 21.8 24 19.8 20.8 24.7 26.7 25.8

Imports of goods (f.o.b.) 23.4 24.1 25.8 31.3 22.2 24.2 24.5 23.6 23.7

Services -6.1 -5.9 -5.6 -6.5 -5.3 -5.3 -5.6 -5.4 -5.7

Factor income -3.8 -4.2 -4.1 -3.6 -5.1 -3.7 -4.3 -4.9 -5.1

Current transfers 4.9 2.6 3.9 5.2 5.4 4.9 4.3 4.1 3.9

Current account balance -6.4 -6.3 -9.8 -12.2 -7.3 -7.5 -5.4 -3.1 -4.8


Debt PolicyPublic debt stock increased from 26.8% of GDP in 2010 to 27.5% in 2011, and is expected to progress to 28.1%in 2012. External debt represented 86.5% of public debt in 2011. The ratio of external debt service to exportsof goods and services fell to 4.5% in 2011. To maintain debt sustainability, Mali is set to continue with itsprudent fiscal policy, and external financing will continue to be in the form of grants and loans with aconcessionality rate of at least 35%. However, the government intends to use the forthcoming debtsustainability analysis to determine an envelope of non-concessional loans for infrastructure investments thatwould be compatible with debt sustainability. In 2011, the government made an inventory of all the agreementsunder which the government has contracted domestic debt or given a commitment to guarantee domestic debtso that this information can be recorded in public debt data and budgets. This has already enabled thegovernment to identify direct and indirect commitments to the banking sector amounting to XOF 183 billion(3.6% of GDP), including XOF 41 billion (0.8% of GDP) in amounts due and unpaid. In 2011, XOF 2.3 billion ofthis was paid off and a further XOF 7.5 million allocation has been included in the 2012 budget.


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Figure 2: Stock of total external debt (percentage of GDP) and debt service (percentage of exports ofgoods and services)


Debt/GDP Debt service/Exports

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

25%

50%

75%

100%

125%

Perc

enta

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Economic & Political Governance

Private SectorMost economic activity in Mali is centred around self-employment and is limited to subsistence activities. Suchactivities rely on social relations and informal networks. Private companies are small, with few permanent staffand large variations in cash flows. These companies face various obstacles, including limited access to finance,products that do not meet international standards, restrictive taxation, corruption, lack of dialogue betweenpublic and private stakeholders and technical and financial partners, high transaction costs and basicinfrastructure that is well below the necessary standard. The World Bank’s Doing Business 2012 report ranksMali 146th out of 183 economies. For labour market legislation, the World Economic Forum ranks Mali 82nd outof 139 economies in its employment rigidity index and 100th for wage determination flexibility. These rankingsreflect the difficulties and high cost of hiring and firing in Mali. Private land ownership is permitted with fewrestrictions but the relative freedom of access to land is limited by poor management of the land register andthe land registration procedure.

Nevertheless, improvements were made in 2011. The Doing Business report classifies Mali as the WAEMUmember countrywith the best record for business climate reform. As regards commercial and industrial law,Mali’s ranking has improved greatly, according to the report. It has climbed, notably, from 152nd to 126thplace in the rankings for ease of obtainment of credit. Mali has also improved by making it easier to start up abusiness. The process now requires four procedures and takes eight days, although both these figures remainhigh compared to those of Senegal, where setting up a company involves three procedures and takes just fivedays.

In 2011, the government adopted a new investment code that should make the private sector more viable andbetter able to contribute to economic growth. The technical and financial partners who are providing supportfor the Malian financial sector, who are being headed in 2012 by the African Development Bank (AfDB), alsoplan to carry out a study profiling the country's private sector with the aim of remedying the current deficit ofinformation about it.

Financial SectorFinancial stability is underpinned by the prudential surveillance of the WAEMU Banking Commission, whichconducts regular, on-the-spot checks of the country’s financial institutions. Mali shares an exchange-ratemechanism with the other WAEMU member states that imposes no restrictions on payments and transfersconnected with current international transactions. Malian banks comply with WAEMU directives on increasingthe minimum capital requirement for banks and other financial institutions, which stood at XOF 10 billion on31 December 2012. The financial system has sufficient liquidity but most local banks only have short-termresources, which is not conducive to long-term financing for major projects. Credits to the economy stand ataround 13% of GDP, while deposits stand at around 21%. Lending rates have fallen in recent years but areslightly above the WAEMU average of 8%. The quality of banks’ portfolios has improved but remainsunsatisfactory. Bad debt makes up 10% of outstanding loans but is only 52% covered by provisions.

Access to financial services remains limited, with only 10% of Malian companies having obtained credit tofinance their activities. This limited access to credit is generally justified by the incapacity of companies to offerthe banks adequate guarantees, the complexity of the loan process, the absence of a real need for financingamong businesses and the high cost of credit. In May 2011, however, the government responded by approvingthe feasibility studies carried out into the creation of a private-sector guarantee fund (FGSP) and a capital-stockinvestment company (SICR). The FGSP aims to provide banks with guarantees for medium and long term loans(2‑7 years) contracted by small and medium-sized enterprises (SMEs), while the SICR aims to take shareholdingsin companies. In addition, the African Development Bank (AfDB) approved a credit line for the Malian SolidarityBank (BMS) to contribute to promoting SMEs and small and medium-sized industries (SMIs). Finally, in 2011 thegovernment issued a tender call for an investment bank and a law firm to advise it on the privatisation of theMalian housing bank BHM, which is to be carried out in 2012.

Public Sector Management, Institutions & ReformMali continued to implement its reform policies to modernise the public administration, decentralise governmentand modernise the management of public finances. In particular it has created an institutional developmentprogramme (PDI), a national decentralisation policy, and an action plan to improve and modernise publicfinances (PAGAM/GFP).

The PDI programme has gradually made public services more effective by using modern management methodsand procedures and strengthening communication and relations between users and the administration.However, the process of preparing and validating the results-based national management policy fell behind


schedule in 2011. With regard to competition and privatisation, the BHM, national railway company CTF andnational textiles company CMDT have all been restructured. A third mobile-phone licence has also beenawarded.

On the railways, the percentage of freight carried by rail in the Bamako-Dakar corridoor fell to less than 20% in2011. The receivership plan devised by the Malian and Senegalese governments after operator Transrail filedfor bankruptcy in 2009 was approved in December 2011. The plan envisages a lease arrangement and thecreation of a joint-assets company between the two countries. The rapid implementation of this plan in 2012will enable rail traffic to continue uninterrupted and open up funding for rail infrastructure. In the cotton sector,there was no significant progress in 2011 in the restructuring of state cotton company CMDT and thegovernment appears to be reconsidering its earlier plans to privatise the company. In the mobile telephonysector, a consortium formed by Planor and Monaco Telecom won the third licence with an EUR 84 million bid.

The government continued with its devolution and decentralisation plans in 2011, drawing up and implementingthree-year plans to transfer resources and devolve powers and setting up support cells in several ministerialdepartments to provide assistance with the decentralisation and devolution process. Also, the distribution ofincome and expenditure between the state and local and regional authorities has been clearly defined. A lawpassed on 15 July 2011 determines the rules for distributing tax revenue collected by each municipality,cercle(sub-region) and region. However, the level of decentralisation of budget allocations (the share of thestate budget spent by regional authorities) remains low at about 14% in 2011, and only two ministries,education and health, have begun to transfer resources to local and regional authorities.

The government is pursuing its three-year action plan set out in the tax-reform strategy it adopted in December2010. The plan aims to modernise and simplify tax laws and move them into line them with WAEMU directives.The government is not making sufficient progress in rolling out the PNTF national fiscal-transition programme.Mali’s tax burden stood at around 14.3% of GDP in 2011 and the IMF is projecting this to increase by half apercentage point per year. This means the country will not achieve the 17% target set by the WAEMU for 2013.

Progress has been made in connecting expenditure services at central and decentralised level, thus enablinginformation to travel more easily and more reliably, reducing the time it takes to complete administrativeprocedures, improving the quality, presentation and timeliness of budget documents, and providing real-timeinformation regarding execution of the State budget. Similarly, there have been continued efforts to extend themedium-term expenditure frameworks (MTEFs) to all ministerial departments to translate medium-term sectoralstrategies into budgetary terms in a way that is consistent with the Growth and Poverty Reduction StrategyPaper (GPRSP). The number of MTEFs rose from 24 to 28 in 2011.

Regarding internal budget control, a-priori financial control of public spending has improved, reaching a level of96% in 2011, while the effectiveness of services provided began being monitored at the various receptioncommittees in April 2011, with the support of the national financial control directorate. Furthermore, thegovernment devised and approved a national internal budget control strategy in 2011. As regards externalbudget control, in 2011 the government passed a law validating public accounts for the period from 1960 to1991. Work is under way to expedite approval of state accounts for the period from 1992 to 2008. Moreover,throughout 2011, the government hired additional staff for the accounts section of the Supreme Court pendingthe opening of the Court of Auditors.

Natural Resource Management & EnvironmentMali still faces enormous environmental challenges: desertification, deteriorating vegetation and soil cover,silting up of the River Niger, lack of rainfall, loss of biodiversity and deterioration of living conditions. Thesechallenges will be exacerbated in the coming years by climate change and the pressure of human activity froma, population growing at a rate of 3.6% a year. In 2011, efforts were made to better manage environmental andclimate problems and the situation should improve significantly in 2012/13 thanks to international funding tohelp combat climate change. With the support of technical and financial partners, especially the AfricanDevelopment Bank (AfDB), the government has drawn up a large-scale renewable energies developmentprogramme (SREP) and an investment plan based on the national renewable energies strategy.

As part of its preparations for the new 2012‑17 Growth and Poverty Reduction Strategy, environmental andclimate problems have been mainstreamed so they are afforded better consideration. The environment andsanitation ministry has drawn up a national policy and strategy for climate change and an action plan. Theagency for the environment and sustainable development was created in 2011 to support implementation ofnational policies and programmes. Strategic environmental assessments were also made mandatory for newsectoral programmes. In collaboration with partners including Sweden and the World Bank, several programmesand projects are planned in 2012 to manage and monitor the use of natural resources. Norway and Germany setup a technical-assistance project in 2011 to support Mali in defining a portfolio of projects eligible for the CleanDevelopment Mechanism (CDM).


Political ContextAfter ten years under President Amadou Toumani Touré, just a few months before the end of his final term ofoffice, a military junta attempted a coup on 22 March 2012. The internal situation in 2011 was marked bypreparations for the referendum on constitutional reform and the presidential and legislative elections plannedfor April 2012, but now Mali has been thrust back into political instability. The stated purpose of the junta was toend the “incompetence” of the regime in its fight against armed Islamist groups that are prevalent in the north. The security situation in the region became particularly worrying in 2011 as a result of the return of Malianswho had been in the Libyan army and the presence of terrorist groups affiliated to the Al-Qaeda Organisation inthe Islamic Maghreb.

A resurgence of insecurity was observed in January 2012, with armed attacks against Malian army camps whichresulted in heavy casualties, the displacement of local populations and demonstrations against Tuareg peoples incities across the country. More than 126 000 people have taken refuge abroad. However, the army does notseem to have the resources and capacity to cope with the size of the country and the mobility of the rebels.Continued political stability depends on factors such as the security situation in the north of the country, politicaltransition and the organisation of new presidential elections.


Social Context & Human Development

Building Human ResourcesOne of the major social challenges for Mali is the growing population. The current growth rate is 3.6%, and thefertility rate is 6.6 children per woman. In addition, the population is young, with 60% aged under 25. Thecontraceptive prevalence rate (6.2% in 2006) is the lowest in West Africa. This could result in unsustainablelevels of social spending in the medium and long term. Mali should begin its demographic transition by reducingthe fertility rate and addressing population issues in its development policies and programmes.

The country remains on track to achieve the Millennium Development Goal (MDG) for primary-schoolenrolment by 2015. The gross enrolment rate (GER) for lower secondary education was 80.4% in 2011 (87.8%for boys and 73.2% for girls). The gross admission rate was estimated at 69.5% in 2011 (74.9% for boys and64.3% for girls). The gross completion rate for the first cycle of secondary school was estimated at 57.1% in2011 (63.8% for boys and 50.4% for girls). However, there are still huge regional disparities. Literacy is muchhigher in urban areas (53.2%) than in rural areas (21.6%). Education was allocated 35.61% of the 2011 budget.

Mali could also achieve the MDG in the fight against HIV/AIDS by 2015, but the other health objectives seem outof reach despite the significant improvements recorded. Access to treatment has improved, with 31 000 patients(87% of the goal set) receiving anti-retroviral drugs in 2010, up from just 9 750 in 2007. Regarding the MDG forinfant and child mortality, between 2001 and 2006 vaccination coverage for children aged 12 to 23 months rosefrom 61.9% to 72%, infant mortality fell from 113.4 per thousand to 95.8 per thousand, and child mortality fellfrom 229.1 per thousand to 190 per thousand. During the same period, the maternal mortality rate fell from582 to 464 deaths per 100 000 births. The 2011 budget allocated 12.03% of its resources to health.

Poverty Reduction, Social Protection & LabourThe ELIM household survey conducted in 2010 improved knowledge of the poor, their socio-economiccharacteristics and the access they have to services. The survey has provided useful data for defining andmonitoring progress made towards achieving the MDGs and has enabled targets to be set in national strategiesand programmes such as the PRODESS and PRODEC health and education programmes. The 2012‑17 Growthand Poverty Reduction Strategy adopted in December 2011 envisages clearly defined action to help poorpeople and vulnerable groups.

Poverty persists, especially in rural areas, despite the country’s good economic performance. The proportionaffected by income poverty, defined using a poverty threshold in real terms of XOF 165 431 in 2010, droppedfrom 47.4% in 2006 to 43.6% in 2010. But income poverty remains high in rural areas at 51%. It thereforeseems unlikely that Mali will achieve the MDG of reducing poverty by half by 2015. Analysis of the incidence ofincome poverty by socio-economic group shows that farmers – who make up 62% of the population – are worstaffected, with a poverty rate of 57%. The other poorest members of society are unemployed households (29%poverty incidence), self-employed people (23%) and private-sector employees (19%).

Gender EqualityInequality and gender discrimination still abound in Mali. Women remain grossly under-represented in decision-making bodies: only 10% of Malian members of parliament are women and there is only one woman among thecountry’s 49 district prefects. In total, only 8.66% of people elected for office are female and only 6 of the703 municipalities have a mayoress. The literacy rate also varies by gender and by the standard of living of thehousehold, and is twice as high among women (41.6%) than among men (18.8%).

Mali has spent many years producing a personal and family code. The first document was adopted by theNational Assembly in August 2009, but, following opposition from the Islamic High Council and the Association ofYoung Muslims, the President of the Republic returned the document to the National Assembly for a secondreading. All sectors of society were consulted, including religious leaders, civil society organisations, women’sgroups, and representatives of the National Assembly and the government. After two years of discussions, anew document was submitted to parliament and adopted in December 2011.

The new code paves the way for better protection of women and children by: raising the marriageable age forgirls from 15 to 16 and allowing appeals where the age requirement has been waived; improving the protectionof women in certain cases where the husband is not fulfilling his duties, in which case he may lose his status ashead of the household; enhancing the protection of women in the countryside by recognising religious marriage;and making it illegal to violate somebody’s physical integrity, even if it is through a religious or customary actsuch as female circumcision, if it is harmful to their health. However, the text adopted in late 2011 is a stepbackwards from the version passed by the National Assembly in August 2009, which, although it was neverapplied, gave women greater protection and abolished many gender inequalities.


Thematic analysis: Promoting Youth Employment

Youth unemployment is a critical problem in Mali. Almost 300 000 young people join the job market every year.According to official estimates, unemployment affects 9.6% of the overall population. However, this rate masksdisparities by age, gender and place of residence. Unemployment is higher among 15‑39 year olds (between7.6% and 15.4%) than among 40‑64 year olds (between 1.7% and 6.9%). Unemployment affects women(58.8%) more than men. It is also higher in Bamako (27.3%) than in smaller towns and cities (14%) and ruralareas (6.6%). The main problem in rural areas is underemployment during the dry season. On average,unemployment lasts five years and most unemployed people (81.5%) are young people looking for their firstjob.

The scale of unemployment has many causes, including:

Poor economic growth: with average growth between 2005 and 2011 of just 5%, the Malian economycreates very few jobs per year.Rapid population growth: the rate of population growth is among the highest in the world, resulting in anever-expanding workforce.A very young population: 49% of the population are under 15 and 30% are aged 15‑35.Training that is not adapted to the employment available: the education system churns out toomany graduates in disciplines in which jobs are limited or non-existent (office management, accounting,management and law, for example) but not enough suitably trained graduates in sectors offering moreemployment and self-employment opportunities (such agriculture and forestry, industry and agro-industry,mining , core construction professions and information and communication technologies).The rural exodus: many young people from rural areas move to towns and cities temporarily orpermanently, inflating the number of jobseekers.The poor absorptive capacity of the formal sector: private companies and the public administration employonly 5% of the workforce, so that the overwhelming majority of the workforce have precarious, poorly paidjobs in agriculture and the informal sector, which dominate the country’s economy. The urban informalsector offers most jobs but these are often insecure and poorly paid.

With the support of the International Labour Office, the authorities adopted a national employment policy in1998. This policy treats employment as an essential part of human development and an effective means tocombat poverty. It prioritises jobs for young people and has as its objectives: (i) to reduce unemployment andunderemployment by development activity, notably that which is labour intensive; (ii) to improve the supply oflabour by making training more suited to market needs; (iii) to increase demand for labour in urban and ruralareas through private-sector development; and (iv) to promote employment locally by taking regionalcharacteristics into account.

The national employment policy adopts a holistic approach that does not limit itself to using the benefits ofeconomic growth to promote employment but also proposes a series of innovative measures to facilitate theintegration of young people into production. These initiatives include:

The youth-employment programme (YEP), which is financed by the government with ILO technicalassistance. The two-phase programme (2004‑08 and 2011‑16) has enabled 4 000 young graduates tobenefit from professional-qualification courses between May 2005 and October 2009.The national employment action programme for poverty reduction (PNA/ERP), which is also funded andsupported by the International Labour Office. Launched in 2003 for a seven-year period, the programmehas trained 300 home helpers and 91 young people through 21 workshops.The PEJHIMO programme, funded by State resources generated by Heavily Indebted Poor Countriesinitiative (HIPC) and the Grand Duchy of Luxembourg with technical assistance from the InternationalLabour Office, aims to integrate young people into employment by investing in labour-intensive work inrural areas. Launched in 2005, it has created around 33 000 days of work through initiatives involving smalland medium-sized companies, as well as 150 new permanent posts.The PAPESPRIM programme to promote private-sector employment, which is a five-year programmeinitiated in 2008 and funded by the State and by Denmark. This programme has funded 14 studies bynational offices and provided 50 vocational-training scholarships.The PAJE-Nieta project, funded by the state and the United States Agency for International Development(USAID), which supports young entrepreneurs. This five-year project aims to enable the training of12 000 young entrepreneurs.


The ten-year PRODEFPE programme for the development of vocational training for employment, preparedin 2011 for 2012‑21. Costing around XOF 1.660 trillion, the programme aims to strengthen the institutionalcapacity to steer and manage vocational training, create and implement a national engineering capacity,develop training in promising sectors, train human resources in promising sectors and facilitate the socio-economic integration of young people and women.

Despite these initiatives, the results achieved in terms of youth employment are below expectations. Thegovernment’s long-term solution to the unemployment crisis involves addressing the structural causes ofunemployment. The government must go beyond palliative measures and implement proactive policies aimedat accelerating economic growth, sharply reducing population growth and training young people in sectors thatmeet the needs of the economy.

Notes1Growth and Poverty Reduction Strategy Framework, CSCRP 2012-2017, 28 December 2011. http://www.mali-apd.org/IMG/file/pdf/DOCUMENTS_CLES/1_CSCRP/2012_MALI_CSCRP_2012_2017_VF.pdf


http://www.mali-apd.org/IMG/file/pdf/DOCUMENTS_CLES/1_CSCRP/2012_MALI_CSCRP_2012_2017_VF.pdf

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