Executive Summary Title
Despite enthusiasm for U.S. investment, there are significant obstacles to investing in Mali, including political instability, economic sanctions, allegations of corruption, poor infrastructure, and ongoing insecurity throughout the country. Mali remains under transition government rule after a coup d’etat in August 2020, followed by a further consolidation of military power in May 2021. The U.S. Department of State maintains a “Level 4: Do Not Travel” travel advisory for Mali due to crime, terrorism, and kidnapping. Continued insecurity throughout Mali is exacerbated by the minimal presence of the state in many areas and has permitted terrorist groups to conduct attacks against Western targets and Malian security forces. Intercommunal violence stemming from conflict between livestock herders and crop farmers in central Mali further contributes to instability.
Mali depends on bilateral donors and multilateral financial institutions, including the World Bank, International Monetary Fund (IMF), and African Development Bank, to fund major development projects, particularly in health, infrastructure, education, and agriculture. Mali received significant financial support in 2020 to address the COVID-19 pandemic and to support post-pandemic economic recovery. Since then, however, donors such as Denmark and France have partially or fully interrupted their development support to Mali, intensifying the financing needs.
The COVID-19 crisis interrupted a five-year period of consistent growth. As a result, Mali’s growth in 2020 reached only two percent against an initial projection of five percent. The transition government took measures to support households and businesses amid this economic slowdown, further increasing its fiscal deficit, which reached 6.2 percent of GDP in 2020, against an initial projection of 3.5 percent. In March 2021, the IMF projected GDP growth of six percent for Mali, as well as average inflation of two percent. Mali was relying on these positive projections to reduce its budget deficit to 4.5 percent of GDP, down from 5.5 percent a year ago. These projected figures will likely be significantly affected by the ECOWAS and WAEMU sanctions in force during the first half of 2022.
Business contacts report both Malian and foreign businesses face corruption in procurement, customs procedures, tax payment, and land administration, although the transition government has committed to undertaking reform, including through improved public financial management practices and increased tax revenues. Efforts to strengthen revenue collection agencies, particularly customs, are ongoing following significant revenue shortfalls in 2018 that the IMF attributed to corruption, weak taxpayer compliance, and fraud. Malian businesses generally view U.S. products favorably and openly search for new partnerships with U.S. firms, particularly in infrastructure, energy, mining, and agriculture.
Investors may consult the website of Mali’s Investment Promotion Agency (API-Mali)
|TI Corruption Perceptions Index||2021||136 of 180||http://www.transparency.org/research/cpi/overview|
|Global Innovation Index||2021||124 of 132||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||2020||USD 0*||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2020||USD 830||https://data.worldbank.org/indicator/NY.GNP.PCAP.CD|
* A nonzero value that rounds to zero.
1. Openness To, and Restrictions Upon, Foreign Investment
3. Legal Regime
4. Industrial Policies
5. Protection of Property Rights
6. Financial Sector
7. State-Owned Enterprises
Mali has privatized or reduced government involvement in many state-owned enterprises (SOEs). However, there are still 45 state-owned or partially state-owned companies in Mali, including 12 mining companies, five banks, the national electricity company EDM, the telecommunications entity SOTELMA, the cotton ginning company CMDT, as well as cigarette company (Société nationale de tabac et allumettes du Mali or SONATAM), sugar companies Sukala and N-Sukala, and the Airports of Mali. The government no longer has shares in two banks, Banque Sahelo-Saharienne pour l’Investissement et le Commerce (BSIC-Mali), and Coris Bank International-Mali, in which it had respectively 25 and 10 percent shares as of December 2017. The government reduced its shares in the Malian Development Bank (BDM) and Malian Solidarity Bank (BMS) while it maintained its share in the Banque Nationale de Developpement Agricole (BNDA), which increased its total capital stock by 21.5 percent in 2019 compared with 2018.
Private and public enterprises compete under the same terms and conditions. No preferential treatment is given to SOEs, although they can be at a competitive disadvantage due to limited flexibility in their management decision-making process. Malian law guarantees equal treatment for financing, land access, tax burden, tax rebate, and access to raw materials for private firms and SOEs.
The government is active in the agricultural sector. The parastatal Niger River Authority (Office du Niger) controls much of the irrigated rice fields and vegetable production in the Niger River inland delta, although some private operators have been granted plots of land to develop. The Office du Niger encourages both national and foreign private investment to develop the farmlands it manages. Under a Millennium Challenge Corporation-funded irrigation project, Mali granted titles to small private farmers; an adjacent tranche developed with MCC was to have been open to large-scale private investment through a public tender process. However, all MCC projects were suspended as a result of the coup d’état of March 2012 and discontinued when the projects reached the end of their implementation deadline. The national cotton production company, CMDT, which is yet to be privatized, provides financing for fertilizers and inputs to cotton farmers, sets cotton prices, purchases cotton from producers, and exports cotton fiber via ports in neighboring countries. The agricultural sector, including cotton growing, is subject to erratic rainfalls.
The government also remains active in the banking sector. The state owns shares in five of the 14 banks in Mali: BDM (19.5 percent share), Banque Internationale pour le Mali (BIM) (10.5 percent), BNDA (36.5 percent), BMS (13.8 percent), and Banque Commerciale du Sahel (BCS) (3.3 percent). While the government no longer has a majority stake in BDM, it has significant influence over its management, including the privilege to appoint the head of the Board of Directors.
Senior transition government officials from different ministries make up the boards of SOEs. Major procurement decisions or equity raising decisions are referred to the Council of Ministers. Government powers remain in the hands of ministries or government agencies reporting to the ministries. No SOE has delegated powers from the government.
SOEs are required by law to publish an annual report. They hold a mandatory annual board of directors meeting to discuss financial statements prepared by a certified accountant and certified by an outside auditor in accordance with domestic standards (which are comparable to international financial reporting standards). Mali’s independent Auditor General conducts an annual review of public spending, which may result in the prosecution of cases of corruption. Audits of several state-owned mining companies have revealed significant irregularities.
8. Responsible Business Conduct
There is no general awareness or defined standard of responsible business conduct in Mali among producers or consumers. Despite the creation of the Malian Agency for Normalization and Quality Promotion (Agence Malienne de Normalisation et de Promotion de la Qualité or AMANORM) and the National Agency for the Sanitary Security of Foods (Agence Nationale pour la Securité Sanitaire des Aliments or ANSSA), some report Mali continues to produce, import, and export dangerous products and products of poor quality. Allegations of violations of hygiene and quality standards are common in the food-processing industry and investors have reported there is no general awareness about the dangers of unsafe and toxic chemical products in food production.
Labor rights are not generally respected given Mali’s large and unregulated informal sector. Even formal businesses often hire workers informally, such that employees do not always receive social security, retirement, or other related benefits. Mali has various laws intended to prevent child and forced labor, as well as business practices harmful to the environment and local communities. Despite these laws, there are frequent reported cases of child labor and forced labor in the mining, agricultural, service, and industrial sectors. The mining code requires owners of mining and exploitation permits to present local development plans to mitigate the health, security, hygiene, environment, and cultural heritage impacts of their mining activities. Conflicts between local artisanal mining communities and foreign mining companies over land ownership rights are frequent. Local communities have voiced concern with the significant environmental impacts of mining, including from dredging, as well as the lack of government efforts to restore and rehabilitate the environment after mine closures. Foreign mining and oil exploration companies sometimes provide schools and health clinics to communities in proximity of their activities as a form of corporate social responsibility. These activities are not done in accordance with the OECD Guidelines for Multinational Enterprises but are rather the result of individual negotiations between the company and the leaders of neighboring communities.
Mali is an active member of the Extractive Industries Transparency Initiative (EITI) and since 2011 has been designated as a “compliant country.” The latest EITI decision available at notes Mali made “meaningful progress with considerable improvements in implementing the 2016 EITI Standard.”
Acute insecurity and intercommunal violence in the northern and central regions as well as episodic terrorist attacks in the southern regions have contributed to the development of the private security sector, which proposes services to the government, local companies, foreign governments and companies, and international organizations. The deployment of Russia-backed private military company Wagner Group in Mali has raised concerns from the international community and the U.S. government that the group may further destabilize Mali’s territory. Mali is not a signatory to the Montreux Document on Private Military and Security Companies, nor of the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).
Many companies claim corruption is the most significant obstacle to foreign investment and economic development in Mali. While corruption is a crime punishable under the penal code, bribery is frequently reported in many large contracts and investment projects. Some investors report government officials often solicit bribes to complete otherwise routine procedures. The transition government has pledged to prioritize anti-corruption efforts. In 2021, Transparency International’s global corruption ranking for Mali decreased to 136th of 180 ranked countries (from 129th of 180 in 2020). Mali’s perceived public corruption score from Transparency International was 29 out of 100 in 2020 (with 0 being “highly corrupt” and 100 being “very clean”). Relative to other developing countries, Mali was rated at the 67th percentile for control of corruption on the FY2020 MCC Scorecard (based on World Bank and Brookings Worldwide Governance Indicators reports).
Corruption is reportedly common in government procurement and dispute settlement. The government has addressed this issue by requiring procurement contracts to be inspected by the Directorate General for Public Procurement with the Ministry of Economy and Finance, which determines whether the procedure meets fairness, price competitiveness, and quality standards. However, there are allegations of significant political interference in procurement. In addition, both foreign and domestic companies complain about harassment and requests for bribes from officials involved in tax collection. Mali’s international donor community has been working with the government to reduce corruption.
Investors have found the judicial sector to be neither independent nor transparent. Questionable judgments in commercial cases have occasionally been successfully overturned at the supreme court. However, there is a general perception among the populace that while prosecution of minor economic crimes is routine, official corruption, particularly at the higher levels, goes largely unpunished.
In 2004, then-president of Mali Amadou Toumani Touré created the Office of the Auditor General (BVG) as an independent agency tasked with auditing public spending. Since its inception, the BVG has uncovered several significant cases of corruption, including in the customs directorate. However, few findings of corruption have resulted in prosecutions.
Growing pressure from international donors for more transparency in public resource management led to changing the appointment process for directors of finance and equipment across many ministries. As a result, in March 2017, the Minister of Economy and Finances dismissed 15 Directors of Finance and Equipment. Eighteen others were moved to other ministries. The government opened OCLEI in 2017 to combat illicit enrichment by government officials. OCLEI has the authority to collect asset declarations from public servants, to conduct investigations of government officials suspected of corruption, and to refer cases for prosecution if sufficient evidence is gathered against the defendant. However, OCLEI’s operations were suspended following civil servants’ union protests against asset declaration requirements. Negotiations between the unions, the government, and donors eventually yielded a satisfactory solution that enabled the office to resume operations, and the office has begun registering asset declarations for certain categories of civil servants. According to its 2017-2018 report, OCLEI received asset declarations from approximately 1,000 civil servants (nearly 70 percent of all civil servants in Mali are subject to assets declaration) over 2017-2018 and referred three suspected cases of corruption to the justice system. However, OCLEI came under significant pressure in 2020 when Mali’s main workers union requested the government close OCLEI.
Following a cabinet reshuffle in 2019, the newly appointed Minister of Justice took measures to address corruption by appointing a new prosecutor in the Economic and Financial Specialized Judicial Office of Bamako, a court in charge of prosecution of corruption. Since these changes, many high-profile business and political leaders have been arrested due to corruption allegations. In 2021, Mali’s Auditor General released 11 financial audit reports, two performance audit reports, four reports of conformity, and four reports on the level of implementation of recommendations it made in previous audit reports. The Auditor General refers cases of fraud or other unlawful practices to the Economic and Financial Specialized Judicial Office of Bamako. Since the beginning of the transition government in 2020, reports from the Auditor General have led to the arrest of many high-profile former government officials for alleged involvement in corruption business dealings. Though these are welcome developments for some observers, others have highlighted the political motivations behind these arrests and the failure of the judicial branch to prosecute them properly and in a timely manner. In sum, the results of recent anti-corruption efforts remain a mixed bag.
In September 2021, the National Transition Council (CNT) passed the law on the creation of the national court dedicated to combating economic and financial crimes. The Act amends provisions of the Criminal Procedure Code and provides the legal basis for establishing a much-needed institution to prosecute economic and financial crimes wherever they occur in Mali. The new Criminal Procedure Code established three specialized anti-corruption chambers under the jurisdictions of appellate courts in Kayes, Bamako, and Mopti.
The new, national anti-corruption court establishes a comprehensive system to fight corruption and to coordinate across numerous specialized agencies such as CENTIF, OCLEI, and BVG. It is also the single judicial point of contact for economic and financial crimes with authority to liaise on cooperation requests for international mutual assistance on corruption related criminal matters.
Mali’s transition authorities have prioritized messaging about anti-corruption and the need for enhanced financial transparency in governance. The creation of a national anti-corruption court that is professionally staffed and empowered to aggressively prosecute economic and financial crimes is an important step toward real progress on this issue.
10. Political and Security Environment
Throughout nearly three decades of multi-party democracy, Mali has consistently encouraged private enterprise and investment. However, the destabilizing effects of Mali’s 2012 coup d’état led to a deterioration of the economic situation and uncertainty in the investment climate. The August 2020 coup d’état and the May 2021 consolidation of military power have plunged the country into political uncertainty and instability, further exacerbating existing challenges. Mali remains under transition government rule, although ECOWAS and other international organizations maintain pressure on the government to organize elections in a timely manner. Mali continues to face significant political and security challenges amidst slow implementation of a peace agreement signed in 2015 that aims to resolve the ongoing conflict in northern Mali. A disparate group of signatory armed groups, militias, bandits, and terrorist groups continue to exert influence in wide swathes of Mali’s largely ungoverned northern areas as well as central Mali. Furthermore, terrorist groups have increased the frequency and range of their attacks—particularly against the base camps of the UN peacekeeping mission (MINUSMA) and the Malian Armed Forces (FAMa) in northern and central Mali—in an effort to destabilize the country. The situation in central Mali—namely in the Segou and Mopti regions—is increasingly unstable due to intercommunal conflict, localized political violence, and the incursion of extremist groups into the region.
Terrorist groups with varying degrees of allegiance to al-Qaeda and ISIS operate in Mali, and often pursue local agendas complementary to these global extremist movements. Groups linked to al-Qaeda in the Islamic Maghreb (AQIM), which have merged under the banner of Jama’at Nusrat al-Islam wal-Muslimin (JNIM), continued to conduct terrorist attacks throughout 2021, primarily targeting international and Malian military forces. These groups have claimed responsibility for recent gun and improvised explosives attacks, kidnappings, and other violent actions in northern and central Mali.
While the MINUSMA peacekeeping effort is still present in Mali, in February French authorities declared their intent to remove troops from the country. Malian security forces have undertaken counterterrorism operations in the central and the tri-border region since November 2021. However, they have been unable to counter every threat, and in many cases they are accused of targeting civilians. In March of this year, extremist groups attacked FAMa in Mondoro, resulting in dozens of dead, including among FAMa. The UN peacekeepers’ northern base camps are often targeted by terrorist groups. Attacks by violent extremist groups have moved beyond the traditional conflict zone in northern Mali to central and southern Mali, where many villages are controlled by extremist groups who prevent farmers from growing crops, destroy planted crops, and impose zakat. The tri-border area (the border with Burkina Faso and Niger) and some remote parts of southern Mali are increasingly under threat of attack.
While Malian forces, backed by MINUSMA and French forces, had taken steps to reassert control over most of the major cities, much of northern and central Mali remain unstable, with large swaths of the country outside state control. AQIM, long entrenched in northeastern Mali, remains a threat. AQIM has demonstrated a pattern of kidnapping hostages for ransom and launching operations against neighboring Algeria, Mauritania, Burkina Faso, and Niger. AQIM and its local affiliates have been involved in various terrorist attacks targeting Westerners in Mali, including at a restaurant in Bamako in March 2015; at a hotel frequented by foreigners in Sevare in August 2015; against the Radisson Blu Hotel in Bamako in November 2015; and against the Campement de Kangaba hotel in June 2017.
While previous extremist attacks have generally spared foreign companies, aside from hotels and restaurants, some attacks have targeted infrastructure projects involving foreign companies. In October 2017, extremists attacked a foreign company in charge of the construction of a road in Timbuktu and destroyed several vehicles. In March 2018, terrorists attacked and destroyed a USD 66 million dam construction project in Djenne. In April 2020, extremist groups carried out attacks in the southwestern region of Kayes, Mali’s gold-mining region. In 2021, extremist groups attacked mobile companies’ infrastructure in different areas of northern Mali, resulting in facility damage and service interruptions. In September 2021, a mining company convoy accompanied by Malian security forces was attacked by terrorists on the road from Bamako to Kayes, resulting in at least five deaths. While Malian armed forces have increased pressure on extremist groups, observers consider that the departure of the French forces may result in increased security challenges, including from signatories of the Algiers Peace Accord.
11. Labor Policies and Practices
Labor is widely available in Mali, but companies have reported skilled labor is in short supply. Reliable unemployment data is difficult to obtain. While a 2021 survey by the transition government found an unemployment rate of 6.1 percent, the actual figure is likely much higher. The rate is generally higher for youth between the ages of 15-24, coming in at 9.9 percent according to the government’s 2021 survey. Workers have the right to unionize. Relations between labor and management are often contentious and strikes are common. The government has ratified all International Labor Organization (ILO) conventions protecting the rights of workers.
Since June 2014, the government faced several strikes led by different unions, including the national union of workers (UNTM), the union of university and basic education professors, the union of workers from the tax office, the union of workers of the national radio and television company, the confederation of unions (CSTM), the union of judges, and the union of health workers. Since its inauguration in September 2020, the transition government has also faced a series of strikes across sectors. The private sector also participates in strikes, as seen in 2015, 2017, and 2022, which have affected banking, finance, and telecommunications companies. While employers and workers are often able to reach a resolution, strikes can significantly disrupt economic activities, particularly when they involve key sectors like transportation or the financial sector. The labor code adopted in 1992 (amended in December 2011, in June 2017, and in July 2019) streamlined hiring and firing procedures. Conflicts often arise when employers terminate contracts and fire employees. Large Malian and international employers have had difficulty enforcing their rights in court, given that powerful and independent labor unions play an important role in supporting their members and in other national affairs. Compensation plan negotiations and firing procedures are time-consuming and closely scrutinized by the Ministry of Labor and the judiciary. Labor laws differentiate between layoffs and firing. Employees who are laid off are not entitled to unemployment compensation but are entitled to other benefits, including one-month gross salary and compensation for untaken leave. Employers are required to provide advance notice and a certificate to laid off employees. Although not a requirement, it is advisable to have regular contacts with labor inspectors, especially when concluding new hiring contracts or considering terminations or reductions in force.
Child labor and trafficking in persons continue to be serious problems in Mali. The ILO reports over 46 percent of children in Mali engage in child labor, including the worst forms of child labor such as child soldiering and hazardous activities in the agriculture and gold mining sectors. A 2021 transition government survey reported 11.6 percent of children between 5 and 17 years old are employed. The survey suggests the prevalence of child labor depends on the age, with 20 percent of children between the age of 10 and 17 years old being employed, compared with 2.5 percent of children aged 5 to 9 years old. Cotton, artisanal gold, and rice are included on the U.S. government’s List of Goods Produced by Child Labor or Forced Labor. Additionally, rice is included on the U.S. government’s Executive Order 13126 List of Goods Produced by Forced and Indentured Child Labor. The government has action plans for monitoring child labor and unsafe working conditions. Labor inspection entities, however, are underfunded and unable to regularly conduct inspections or provide support for victims of violations. In June 2017, Mali amended its labor code to align Malian law on the minimum age of employment with the ILO standard, increasing the minimum age of employment from 14 up to 15. The amended labor law bans discrimination based on religion, race, or gender. It also requires equality in terms of remuneration and forbids forced and compulsory labor.