Despite promising economic opportunities for U.S. firms and enthusiasm for U.S. investment, investors have complained of significant obstacles to investment in Mali, including unreliable electricity access, limited infrastructure, and corruption. According to many businesses, terrorism, drug trafficking, and smuggling, primarily in the northern and central conflict-affected portion of the country, also inhibit investment. Some report that both Malian and foreign businesses face corruption in procurement, importation and export of products, tax payment, administrative processing, and land management.
Several foreign investors report that Mali’s security and political crisis stemming from the 2012 coup d’état is ongoing and exacerbates the already difficult investment climate. Companies claim that continued instability in northern and central Mali has permitted terrorist groups to conduct attacks against Westerners and Malian government forces. Reports show that this instability, initially concentrated in the North, has extended to Mali’s center where terrorist groups are taking advantage of the minimal presence of Malian authorities and security forces. Frequent deadly clashes between livestock herders and crop farmers further contribute to instability, according to U.S. companies.
Despite the ongoing security challenges being reported, Mali has experienced strong annual economic growth (near or exceeding 5 percent) since 2014. Mali welcomes investors in the infrastructure, telecommunication, service, mining, and agricultural sectors. Mali continues to depend upon multilateral financial institutions including the World Bank, International Monetary Fund, African Development Bank, and bilateral donors for funding various development projects, mainly in health, infrastructure, education, and agriculture. The investment climate benefits from the financial and economic reform processes that accompany this institutional lending.
The United States and Mali enjoy a strong bilateral relationship. Malian businesses generally view U.S. products favorably and openly search for new partnerships with U.S. firms. The Government of Mali remains committed to reforming the economy, including improving public financial management practices, increasing tax revenues, and the ongoing privatization of several state-owned enterprises. Reforms to the mining code, petroleum products pricing, tax code, and investment code have yet to be completed, though some reforms are in progress. Despite recent reforms, the Government of Mali experienced considerable shortfalls in tax collection in 2018, mainly due to what several companies have identified as corruption, weak taxpayer compliance, and fraud.
The U.S. Department of State maintains a “Level 4: Do Not Travel” Travel Advisory warning against travel to Mali due to reported critically high risks from crime, terrorism, and kidnapping, especially in the Center and North of the country.
Table 1: Key Metrics and Rankings
|TI Corruption Perceptions Index||2018||120 of 175||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report||2019||145 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2018||112 of 126||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, stock positions)||2017||N/A||http://www.bea.gov/international/factsheet/|
|World Bank GNI per capita||2017||USD 770||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
Mali generally encourages foreign investment. Foreign and domestic investments receive equal treatment. The structural adjustment facility agreements signed between the International Monetary Fund (IMF)/World Bank and Mali since 1992 support foreign investment. The government’s national strategy to fight poverty as presented to the IMF, World Bank, and other donors emphasizes the role of the private sector in developing the economy. Mali adopted a new Strategic Framework for Economic Recovery and Sustainable Development for 2019-2023, “le Cadre Stratégique pour la Relance Economique et le Développement Durable” (CREDD). Emphasizing peace, security, and macroeconomic stability, the new CREDD hopes to strengthen economic growth, institutional development, governance, and the provision of basic social services. Mali maintains an office in charge of Business Climate Reforms, the Cellule Technique de la Réforme du Climat des Affaires (CTRCA), tasked with developing an action plan for improving the business environment. In 2015, Mali also created a committee comprising both government and private business for Monitoring Business Environment Reforms. Mali is a member of the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (WAEMU), which aim to reduce trade barriers, harmonize monetary policy, and create a common market.
The Malian government has instituted policies promoting direct investment and export-oriented businesses. Foreign investors go through the same screening process as domestic investors. Criteria for granting authorization under the 2012 investment code include the size of the proposed capital investment, the use of locally produced raw materials, and the level of job creation.
Mali maintains a one-stop shop for prospective investors, the Agency for Investment Promotion (Agence pour la Promotion de l’Investissement or API). A law on public-private partnerships approved by the National Assembly in 2016 aims to reinforce the framework to attract foreign and domestic investment in a multitude of sectors.
In 2011, the government created an export promotion agency (APEX-Mali) to promote and encourage export-oriented activities. APEX-Mali is fully functional. The Government of Mali has also revitalized an African Growth and Opportunity Act (AGOA) committee to encourage exports to the United States. The AGOA committee developed a National AGOA Strategy to help Malian exporters better utilize the market preferences provided under AGOA.
U.S. investors report to face the same challenges as other foreign investors do, including allegedly unfair application of tax collection laws, difficulties clearing goods through customs, and requests for bribes. Third parties report that corruption in the judiciary is common and foreign companies often find themselves at a disadvantage vis-à-vis Malian investors in enforcing contracts and competing for public procurement tenders.
Limits on Foreign Control and Right to Private Ownership and Establishment
Foreign and domestic private entities have the right to establish and own business enterprises with no restriction to forms of remunerative activities. There are some specific limits on ownership in the mining and media sector. For example, foreign investors in the mining sector can own up to 90 percent of a mining company. Foreign investors in media companies must have a 50 percent or lower ownership stake. WAEMU requires Malian and foreign companies to report if they will hold foreign currency reserves in their Malian business accounts and receive approval from the Ministry of Economy and Finances and the Central Bank for West African States (BCEAO).
Other Investment Policy Reviews
No information is available on other investment policy reviews.
The Agency for Investment Promotion (API) is Mali’s one-stop shop to facilitate business and to promote foreign and local investments. Serving both Malian and foreign enterprises of all sizes, API has become a strong source of potential support for U.S. investors.
API’s website ( ) provides copious information ranging from business registration, tax payment, access to social security, trade regulations, land ownership procedures, visa and residence permit regulations, and information on tax exemptions, special economic zones, recruitment of personnel, and connecting to water and electricity utilities.
Foreign companies, regardless of size, wishing to register in Mali can receive tax and customs benefits depending on the size of investment. Small and medium sized enterprises, for which the size definition varies across ministries, are also eligible for fiscal advantages. The Government of Mali is in the process of harmonizing its registration advantages. There is no discrimination based on gender, age, or ethnicity in the process of business registration.
The World Bank’s 2019 Doing Business Report notes that it takes an average of five procedures and 11 days to establish a business in Mali. The Government of Mali publishes the incorporation notices of new companies on the official API website. The mining code encourages investments in small and medium mining enterprises, awards two-year exploration permits free of charge, and does not require a commitment from the exploring firm to lease the area explored thereafter.
The Government of Mali has no policy to promote outgoing investment. A few Malian companies invest in neighboring countries and in France.
6. Financial Sector
Capital Markets and Portfolio Investment
WAEMU statutes and the BCEAO (the West African Central Bank) determine the banking system and monetary policy in Mali. BCEAO headquarters are located in Dakar, Senegal. Commercial banks enjoy considerable liquidity. The majority of banks’ loanable funds, however, do not come from deposits, but rather from other liabilities, such as lines of credit from the BCEAO and North African and European banks. In spite of having sufficient loanable funds, commercial banks in Mali tend to have highly conservative lending practices. Bank loans generally support short-term activities, such as letters of credit to support export-import activities and short-term lines of credit and bridge loans for established businesses. Small- and medium-sized businesses have reported to have difficulty obtaining access to credit.
In order to strengthen the banking sector, WAEMU raised the minimum stockholders equity capital required of banks and financial institutions to FCFA 10 billion (USD 16.5 million) and FCFA 3 billion (USD 5 million) by a date still to be determined by the regional WAEMU Council of Ministers. The first step of this measure is to increase the minimum stockholders equity capital requirement to FCFA 5 billion (USD 8.2 million) for banks and FCFA 1 billion (USD 2.5 million) for financial institutions by the end of 2010. WAEMU has made it a requirement for any new banks and financial institutions in the region to abide by the increased minimum stockholders equity requirement. This measure has had mixed results in Mali. Of the 96 banks surveyed by the WAEMU Banking Commission in WAEMU countries, 82 met the new measures (85 percent). In Mali, however, eight out of 14 banks met the criterion (57 percent).
Portfolio investment is not a current practice, although the legal and accounting systems are transparent enough and are similar to the French system. In 1994, the government instituted a system of treasury bonds available for purchase by individuals or companies. The payment of dividends or the repurchase of bonds might be done through a compensation procedure offsetting corporate income taxes or other sums due to the government.
The WAEMU stock exchange program based in Abidjan has a branch in each WAEMU country, including Mali. One Malian company is quoted in the stock exchange. The planned privatization programs of the electricity company EDM (Energie du Mali), the telecommunications entity SOTELMA (Societé des Telecommunications du Mali), the cotton ginning company CMDT (Compagnie malienne pour le développement du textile), and the Bamako-Senou Airport offer prospects for some companies to be listed on the WAEMU stock exchange.
The Government of Mali first participated in the Sovereign Credit Rating Program in 2002, sponsored by the U.S. government. As part of this program, Fitch Ratings won a competitive contract to conduct the ratings. The U.S. Treasury Department provided technical assistance to the Malian Ministry of Economy and Finance with the support of the U.S. Department of State. Fitch completed its evaluation in 2004 and awarded a B- to Mali. Parallel to this effort, Standard and Poor’s awarded Mali a BBB- rating in 2005 through a UNDP-funded program. Standard and Poor’s has not rated Mali since 2005. In December 2009, Fitch Ratings affirmed Mali’s long-term foreign and local currency Issuer Default Ratings (IDRs) at B- with Stable Outlooks, Country Ceiling at BBB-, and short-term foreign currency IDR at B. After completion of the State Department-sponsored rating program, Fitch announced in December 2009 it would no longer provide rating or analytical coverage of Mali, and all ratings have been withdrawn. As of 2018, there has been no new rating for Mali.
Mali’s IDR of B- reflects the investors’ assessments of the country’s high level of poverty, vulnerability to external shocks and slow economic growth. Mali consistently runs a current account deficit, due to its high dependence on energy imports and low export base. Fitch does not expect any improvement in Mali’s creditworthiness in the medium to long term. However, the country’s external situation is not a constraint, as Mali is part of the West African Economic and Monetary Union: the FCFA is pegged to the Euro and the French Treasury guarantees its convertibility.
Money and Banking System
Since the devaluation of the FCFA in 1994, eight new banks have opened in Mali: Ecobank (1998), BICI-M (1998), BMS (2002), BSIC (2003), Banque Atlantique (2005), Banque pour le Commerce et l’Industrie (2007), Orabank of Cote d’Ivoire (2013), and Coris Bank International (December 2013). The return on equity for the banking sector was 14.7 percent in 2015, 11.5 percent in 2016, and 12.2 percent in 2017. The total assets of the 14 banks and the three financial institutions in Mali were FCFA 4, 501 billion (USD 7.7 billion) as of December 2017.
In order to improve the business environment and soundness of the financial system, BCEAO decided to adopt a Uniform Law on Credit Reference Bureau. The Government of Mali decided to align its legislation on the regional requirement by authorizing the Credit Reference Bureau, whose activities include collecting and processing information from financial institutions, public sources, water and electricity companies, etc. to create the credit record of citizens. The collected information is supposed to be treated and commercialized by these companies upon the agreement of clients. The system is also supposed to increase the solvency of borrowers and to improve access to credit. Nonperforming loans represented 17.5 percent of total loans in December 2017.
The microfinance sector has grown rapidly. From 2000 to 2013, the number of new branches operated by microfinance institutions increased from 342 to 700 and the number of beneficiaries from 253,705 to over 1 million. The stock of deposits of microfinance institutions grew from FCFA 14 billion (USD 23 million) to FCFA 53 billion (USD 87 million), and the stock of credit grew from FCFA 16 billion (USD 26 million) to FCFA 60 billion (nearly USD 100 million) over the 2000 to 2013 period. Despite this growth, microfinance institutions suffer from poor governance and management of resources, and have not put in place all government regulations or regional best practices to ensure sufficient financial controls and transparency.
Foreign Exchange and Remittances
The Malian investment code allows the foreign transfer and conversion of funds associated with investments, including profits. As a WAEMU member, Mali uses the Franc of the Financial Community of Africa (FCFA) as its currency. Linked to the Euro, the FCFA is fully convertible at a rate of Euro 1 = FCFA 655.957 as of April 2019. No parallel conversion market exists as the FCFA is a fully convertible currency supported by the French treasury, which ensures a fixed rate of exchange. The FCFA has not been devalued since January 1994. As of April 11, 2019, the U.S. dollar exchange rate was 581.66 FCFA for one U.S. dollar. Local currency exchanges are available at Malian banks.
There are no limits on the inflow or outflow of funds for repatriation of profits, debt service, capital, or capital gains. In the FCFA zone, there is no limit on the export of capital provided that an exporter has adequate documentation to support a transaction and the exporter meets the domiciliation requirement. Most commercial banks have direct investments in western capital markets.
To physically carry foreign currency into the WAEMU zone, non-WAEMU residents need to declare currency valued in excess of 1 million FCFA (approximately USD 1,650). For export, non-WAEMU residents must declare values upwards of 500,000 FCFA (USD 825) in foreign reserves.
Article 12 of the Malian Investment Code of 2012 states that foreign investors are authorized to transfer abroad, without any authorization, all payments relating to business operations in Mali (this includes net profits, interest, dividends, income, allowances, savings of expatriated salaried employees). The capital and financial transactions (such as buying and selling stocks, assets, and compensation from expropriation) are free to transfer abroad but are subject to declaration requirements to the Ministry of Economy and Finance. These transfers must be done through authorized intermediaries such as banks or financial institutions.
Mali is a member of the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), a Financial Action Task Force (FATF)-style regional body. Mali’s most recent mutual evaluation can be found at .
Although Mali’s Anti-Money Laundering Law designates a number of reporting entities, companies have noted that very few comply with their legal obligations. While businesses are technically required to report cash transactions over approximately USD 10,000, most, allegedly, do not. Despite the operation of a number of al-Qaeda-linked terrorist and armed groups in northern Mali, the country’s Financial Intelligence Unit, the National Information Processing Unit (CENTIF), receives relatively few suspicious transaction reports (STRs) concerning possible cases of terrorist financing. With the exception of casinos, designated non-financial businesses and professions are not subject to customer due diligence requirements. The U.S. Department of State’s Financial Action Task Force (FATF) considers Mali a “monitored” country. Additional information is available at http://www.state.gov/j/inl/rls/nrcrpt/2015/vol2/index.htm.
Sovereign Wealth Funds
Mali does not have a sovereign wealth fund.
Many companies claim that corruption is the greatest obstacle for 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 report that government officials often solicit bribes in order to complete otherwise routine procedures. The Government of Mali passed laws against the illegal accumulation of wealth in 2013 and 2015. The law, however, does not force members of parliament or the executive to declare their assets. The government has pledged to update the law. In 2018, Transparency International’s (TI) global corruption ranking for Mali improved slightly to 120 of 180 from 122 of 180 in 2017. Mali’s perceived public corruption score, as evaluated by Malian citizens, is 32 out of 100 with zero being the worst possible score. Relative to other developing countries, Mali was rated at the 69th percentile for control of corruption in the most recent World Bank/Brookings WGI.
Corruption is allegedly most 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, which determines whether the procedure meets fairness, price competitiveness, and quality standards. However, there are allegations of significant political interference in procurement. Mali’s international donor community has been working with the government to reduce corruption, but reports indicate that progress has been slow.
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’s Court of Appeal. 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.
The President created the Office of the Auditor General (Bureau du Verificateur General or BVG) in 2004 as an independent agency tasked to audit public spending. Since its inception, the BVG has uncovered several significant cases of corruption, including in the Customs office. However, few have resulted in prosecutions. In 2011, inspectors from the Global Fund for AIDS, Tuberculosis and Malaria uncovered cases of embezzlement of public and donor funds by officials at the Ministry of Health. The Malian judiciary prosecuted several high-ranking Ministry of Health officials including the Minister of Health who subsequently resigned. However, the trial resulted in an acquittal of the Minister and all 18 co-defendants, due to a lack of evidence. The Unit to Support Financial Control of the Administration (Cellule d’Appui aux Structures de Contrôle de l’Administration) declared in 2015 that 209 reports of corruption were sent to the Ministry of Justice for review and prosecution in previous years; however, no cases have been brought to court and successfully prosecuted.
Both foreign and domestic companies complain about tax collection as they face harassment by officials seeking bribes. In 2016, the Minister of Economy and Finances refused to reimburse a sizeable debt arguing that the lenders failed to provide supporting documents. Many observers contend collusion among government officials and businesspersons artificially inflates Mali’s internal debt.
Growing pressure from international donors for more transparency in public resource management led to changing the appointment process of the Directors of Finance and Equipment. As 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 of Mali opened a new office in 2017, the Office to Combat Illicit Enrichment (Office central de Lutte contre l’Enrichissement illicite or OCLEI), to combat illicit enrichment by government officials. The OCLEI has the authority to receive asset declarations from public servants, to conduct investigations against government officials suspected of corruption, and to refer cases for prosecution if sufficient evidence is gathered against the defendant. However, the OCLEI’s operations were suspended following civil servants’ union protests against “an unfair law” to fight against illicit enrichment. Negotiations between the unions, the Government of Mali, 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.
Resources to Report Corruption
Name: Mamadou Bandiougou Diawara
Economic and Financial Unit (Pole Economique et Financier de Bamako)
Tel. (+223) 20 29 71 34
Samba Alhamdou Baby
The Auditor General (Bureau du Verificateur General)
Tel. (+223) 20 29 70 25
The Accounts Chamber of the Supreme Court (Section des Comptes de la Cour Supreme).
Tel. (+223) 20 22 15 02
Mme. Konaté Salimata Diakité
The Comptroller of Public Services (Controleur General des Services Publics,)
Tel. (+223) 20 22 58 15
10. Political and Security Environment
The U.S. Department of State’s Fact Sheet on Mali is available at https://www.state.gov/r/pa/ei/bgn/2828.htm. Travel warnings can be found at https://travel.state.gov/content/travel/en/international-travel.html.
Throughout nearly three decades of multi-party democracy, Mali has consistently encouraged private enterprise and investment. However, a political crisis that unfolded throughout 2012 pushed the country into what has been reported as unprecedented turmoil, leading to deterioration of the economic situation and uncertainty in the investment climate. Some have noted that 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 politically-motivated armed groups, militias, bandits, and extremist groups continue to exert influence in wide swathes of northern and central Mali. The Malian government is generally not present in those areas outside of major cities. Furthermore, terrorist groups have increased the frequency and range of their attacks – particularly against the base camps of the UN peacekeeping mission (MINUSMA) in Timbuktu, Gao, and Kidal – 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 and localized political violence, as well as an increasing number of armed attacks.
Terrorist groups with varying degrees of allegiance to al-Qaeda and the Islamic State of Iraq and the Levant (ISIL) operate in Mali, and often pursue local agendas complementary to these global jihadist movements. Groups linked with 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 2017 and 2018, 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.
MINUSMA and French troops, in collaboration with Malian security forces, are deployed in the country and are conducting counterterrorism operations that target extremist elements. However, their presence is not sufficient to counter every threat. Extremist groups have attacked UN peacekeepers’ northern base camps in Timbuktu, Gao, and Kidal throughout 2018 and early 2019. Attacks by violent Islamist extremist groups have moved beyond the traditional conflict zone in the north to the center and south of the country. The area along the border with Burkina Faso, and some remote parts of southern Mali, are increasingly under threat of attack.
While the Malian government, backed by MINUSMA and French forces, has taken steps to reassert control over most of the major cities, much of the North and Center remain unstable. AQIM, long entrenched in northeastern Mali, remains dangerous. 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 recent terrorist attacks in Mali, including at a restaurant in Bamako in March 2015; at a hotel frequented by foreigners in Sevaré 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 jihadist attacks spared foreign companies except hotels and restaurants, recent attacks targeted infrastructure projects involving foreign companies. In October 2017, jihadists 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 early 2019, terrorists attacked numerous localities in central Mali resulting in numerous deaths and exacerbating intercommunity violence. According to the Office of the United Nations High Commissioner for Human Rights, attacks in the Mopti region alone have led to 600 deaths and thousands of displaced persons since March 2018. The Malian Ministry of Security announced that 150 Malian and foreign soldiers and 440 civilians were killed since the beginning of 2019.