Economic Overview
Landlocked Mali’s economy is mostly confined to the area irrigated by the Niger River, but the government is encouraging diversification.
Restrained public spending and stable monetary policy have stimulated a growing entrepreneurial sector. More efforts are needed to address endemic corruption and poor infrastructure.
Rigid labor regulations hurt job growth, and the underdeveloped financial sector limits access to finance, preventing investments, and because of this, much of the population relies on informal lending.
Trade is moderately important to Mali’s economy; the combined value of exports and imports equals 47% of GDP. Agriculture, livestock and fishery represent 32.9% of Mali’s Gross Domestic Product (GDP)
Mali’s economic freedom score is 57.6, making its economy the 113th freest in the 2018 Index.
Its overall score has decreased by 1.0 point, pulled down by lower scores for nine of the 12 economic freedom indicators, including all indicators related to the rule of law and government size.
Mali is ranked 14th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.
Main sectors in Mali
Agriculture
Mali’s key sector is agriculture. Cotton is the country’s largest crop export and is exported west throughout Senegal and the Ivory Coast. In addition to cotton, Mali produces rice, millet, corn, vegetables and tobacco.
Industry
Industry represents 21.3% of the country’s GDP. Mali is involved in food processing, textiles, cigarettes, fish processing, metalworking, light manufacturing, plastics and beverage bottling.
Mining
In 1991, with the assistance of the International Development Association, Mali relaxed the enforcement of mining codes which led to renewed foreign interest and investment in the mining industry. Gold is mined in the southern region and Mali has the third highest gold production in Africa (after South Africa and Ghana). Other natural resources include kaolin, salt, phosphate, and limestone.
Mali is yet to explore tourism as a potential growth booster.
Taxes in Mali
Total Tax rate (% of commercial profits) in Mali was 48.3 as of 2017. It measures the amount of taxes and mandatory contributions payable by businesses after accounting for allowable deductions and exemptions as a share of commercial profits. Taxes Withheld (such as Personal Income Tax) or collected and remitted to tax authorities (such as Value Added Taxes, Sales Taxes or Goods and Service Taxes) are excluded.
The Standard Corporate Tax, which measures the amount of taxes that Malian businesses must pay as a share of corporate profits, stands at 35%. Holding companies are not subject to any corporate taxation in Mali.
Profits derived from a company incorporated in Mali are subject to a Withholding Tax (WHT) rate of 10%. WHT (or “retention tax”) enables governments to collect tax revenues from the economic activities of companies operating within its borders.
Value Added Tax (VAT) is levied at a rate of 18% and all businesses are required to obtain a VAT registration number. The Government of Mali determines the rate of the Interim Tax on profits as per the company’s specific situation.
Investing in Mali
Mali’s strategic position is an attraction to many foreign investors; moreover, Mali is a member of the Economic Community of West African States(ECOWAS) and the West African Economic and Monetary Union (WAEMU) that enables investors to have access to the wider market.
Top Reasons Why to Invest in Mali:
1. It has 7 neighboring countries;
2. It has a currency shared with 7 other countries in the region;
3. It has access to more than 350 million consumers;
4. It offers a wide range of investment opportunities;
5. It is the 1st cotton producer in Africa;
6. It is the 2nd livestock farming of west Africa;
7. It is the 3rd gold producer in Africa;
8. It has a growing economic environment;
9. It has simplified procedures and appropriate reforms;
10. It has a dynamic and growing private sector;
11. It has a well trained workforce and a youthful population (60% under 15).