- According to the latest review of Mali's national economy, growth has been slowing over the past two years. Only a record output in gold mining and high agricultural outputs could counteract the impact of the crisis in neighbouring Côte d'Ivoire, the centre of economic activities in the region.
The IMF report however found that the Malian economy had performed surprisingly well in 2003. While earlier projections foresaw negative growth during 2003, calculations now conclude on a real GDP growth of 3.2 percent.
Despite this representing a slowing of growth from 2002 (4.4 percent growth) and 2001 (13.3 percent), any positive outcome had been against the odds. This surprising economic strength also has lifted the projections for the coming years, and the IMF now foresees annual growth rates of around 5 percent between 2004 and 2006.
- Mali's macroeconomic performance has been satisfactory in 2002 and 2003, therefore concludes the Fund, "in spite of the adverse impact of the crisis in Côte d'Ivoire and large fluctuations in agricultural output owing to uneven rainfalls."
In 2002, declines in food production, trade, and transportation were partly offset by a record output in gold mining. Growth was expected to slow further to 3.2 percent in 2003, even though agricultural production is projected to rise by 10.9 percent on account of the very good rainfall recorded in the second half of the year.
While 2002 had seen "a sharp increase in gold and cotton exports and a decline in imports," these trends were reverted in 2003. Last year had seen a fall in the volume of both gold and cotton exports, the IMF reports.
The impact of the Ivorian crisis on Mali's economy, including the closing of the Abidjan-Bamako road, had indeed been strong, the IMF assessment found. Malian authorities had reacted rapidly, diverting trade to other ports and finding new sources of supply for key products. "However, the distance to new ports and their limited capacity, in addition to the poor condition of the transportation system, have created great difficulties," IMF found.
Real GDP growth is estimated to have been reduced by about 1/2 of 1 percent in 2002 and 2003, owing to lower activity in public works, construction and trade. In addition, increased transportation costs helped to keep inflation at about 5 percent in 2002. Since the Abidjan-Bamako road reopened officially in May 2003, traffic has yet to recover because of security concerns and a fee equivalent to US$ 300 to be paid per truck per trip to Abidjan.
- In 2002, the crisis delayed the shipment of cotton exports for an amount equivalent to 1.2 percent of GDP and prevented the export of livestock, equivalent to 1 percent of GDP on an annual basis, the IMF found. Further, "diversion of trade to other ports also increased freight charges."
The Malian government also lost tax revenues amounting to an estimated 1 percent of GDP due to the Ivorian crisis, the IMF analysis found. This was mainly because of lower receipts on import duties and domestic value-added tax.
Looking ahead, IMF the directors analysing Mali's economic situation noted "the favourable prospects for 2004, especially if the regional security situation stabilises, with stronger domestic demand expected to be underpinned by higher output and prices of agricultural commodities, notably cotton."
Since the early 1990s, Mali has been implementing comprehensive economic reforms supported by the Fund. The Malian government has received support to implement its poverty reduction programmes and a debt relief totalling US$ 417 million.
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