Country Risk Rating

A high-risk political and economic situation and an often very difficult business environment can have a very significant impact on corporate payment behavior. Corporate default probability is very high. - Source: Coface

Business Climate Rating

The business environment is very difficult. Corporate financial information is rarely available and when available usually unreliable. The legal system makes debt collection very unpredictable. The institutional framework has very serious weaknesses. Intercompany transactions can thus be very difficult to manage in the highly risky environments rated D.


  • Substantial natural resources: agriculture (cotton) and mining (gold, bauxite and iron)
  • International aid
  • Member of the West African Economic and Monetary Union (WAEMU)


  • Economy vulnerable to weather and commodity price fluctuations
  • Extreme poverty
  • Geographically isolated
  • Degraded security situation
  • Dependent on international aid

Current Trends

Growth is vibrant but fragile

Economic growth should remain robust in 2020, driven by a buoyant primary sector. Gold production, the main economic driver, will continue to grow thanks to high FDI flows coupled with a relatively stable security situation in the mining regions. Gold exports, which account for 14% of GDP and 70% of goods exports, should also benefit from persistently high gold prices. Agriculture will contribute to growth, boosted by a brisk performance in the cotton sector (Mali was the second-largest African producer in 2018), which is increasing its cultivated areas. However, agriculture will remain heavily dependent on weather conditions. Public investment (8.7% of GDP) will continue to increase in 2020, with a focus on building and upgrading the infrastructure (transport, electricity, telecommunications) that is badly needed in the country. The business environment, which is hurt by the lack of infrastructure, will also be hampered by violence, particularly in the north and center of the country. This situation will weigh heavily on the economy, and especially on private consumption, which, despite contained inflation, will remain low due to insecurity and population displacement.

Public and external accounts exposed to cyclical risks

The government deficit should continue to decline in 2020, in line with the government’s commitment to meet the WAEMU convergence criterion, which requires the deficit to be under 3%. Accordingly, increasing revenues will be critical, especially as a large proportion of expenditure (social, security, basic infrastructure) is hard to compress given the country’s situation. To take one example, military expenditure (3% of GDP), particularly to finance the G5 Sahel force, will continue to be a drag on the budget. The authorities plan to implement reforms to improve tax collection, while rationalizing some inefficient spending. In particular, the ongoing reform of the national electricity company (EDM) is vital given EDM’s critical financial situation. The company is structurally loss-making, relies on government subsidies and remains heavily indebted (3.1% of GDP in June 2019). In the short term, the objective is to reduce operational costs and restructure debt, while in the longer term, the government, backed by the World Bank, will support investment projects, including in solar energy production. The country signed a new 3-year Extended Credit Facility agreement in August 2019 with the IMF for USD 192 million (1.2% of GDP), which will provide significant budget support.

Largely shaped by commodity prices, the trade deficit (4.5% of GDP) is expected to narrow in 2020 on strong exports and low oil prices, which will moderate the value of Mali’s imports. The services balance will remain in deficit (8% of GDP), mainly due to freight transport, as will the income balance, which remains burdened by profit repatriation. However, the surplus in the transfer balance, which is fuelled by expatriate remittances and international aid, will help to reduce the current account deficit. Excluding international aid, the current account deficit stands at about 10% of GDP. Its financing is mainly based on FDI, project grants and concessional loans. In addition, the WAEMU central bank will continue to maintain the CFA franc’s euro peg and boasts sizeable foreign exchange reserves, exceeding four months of imports.

Security situation still very poor

The country still faces considerable insecurity, which has become even more prevalent since 2018. The situation is the result of numerous inter-community conflicts, mainly in the center of the country, overlaid by frequent terrorist attacks by jihadist groups. Since the 2015 peace agreement (not upheld), the Malian government has failed to effectively regain control of its vast territory and protect civilians against violence, despite strong support from foreign armed forces, including the UN (MINUSMA), France (Operation Barkhane) and the G5 Sahel force.

President Ibrahim Boubacar Keita (IBK) was re-elected in 2018 for a second 5-year term. Peace-building remains the government’s top priority, which limits its budgetary capacity to pursue the development policies that the country needs (infrastructure, health, education). IBK will also have to deal with growing unrest among Malians, who can see no improvement in the security situation and who are suffering from the government pull-back from many parts of the country. IBK’s party, Rassemblement pour le Mali, could therefore be challenged in the next parliamentary elections, which were initially scheduled for 2018, but are now expected to be held in May 2020, after two postponements.

Mali’s fragile situation is having a significant impact on the business climate, with the country falling three places in the Doing Business 2020 ranking to 148th place (out of 190 countries).


Coface (02/2020)