The Economy of Mali is based to a large extent on agriculture, with an overwhelmingly rural population, many of whom are engaged in subsistence agriculture. Mali is among the ten poorest nations of the world, is one of the 37 Heavily Indebted Poor Countries, and is a major recipient of foreign aid from many sources, including multilateral organizations (most significantly the World Bank, African Development Bank, and Arab Funds), and bilateral programs funded by the European Union, France, United States, Canada, Netherlands, and Germany. Before 1991, the former Soviet Union, China and the Warsaw Pact countries had been a major source of economic and military aid. The per capita gross domestic product (GDP) of Mali was $820 in 1999. Mali's great potential wealth lies in mining and the production of agricultural commodities, livestock, and fish. The most productive agricultural area lies along the banks of the Niger River, the Inland Niger Delta and the southwestern region around Sikasso.
Between 1992 and 1995, Mali implemented an economic adjustment programme that resulted in economic growth and a reduction in financial imbalances. This was reflected in the increased GDP growth rates (9.6% in 2002) and decreased inflation. GDP in 2002 amounted to US$3.2 billion, made up of agriculture 37.8%, industry 26.4% and services 35.9%.
Effective implementation of macroeconomic stabilization and economic liberalization policies and the stable political situation resulted in good economic performance and enabled Mali to strengthen the foundations for a market-oriented economy and encourage private sector development, backed up by significant progress in implementing the country’s privatization programme. Agricultural reform measures were aimed at diversifying and expanding production as well as at reducing costs.
Mali’s economic performance is fragile, characterised by a vulnerability to climatic conditions, fluctuating terms of trade, dependence on ports in neighboring countries.
Mali produces cotton, cereals and rice. Although locally produced rice now provides competition to imported Asian rice, Mali's primary export is cotton. Livestock exports and industry (producing vegetable and cottonseed oils, and textiles) have experienced growth. Although most of Mali is desert or semi-desert, the Niger River is a potential irrigation source. Exports are in three primary sector products (56% gold, 27% cotton, 5% livestock. Cote d’Ivore is where most of the country’s trade goes through and the crisis previously experienced here had a negative effect on Mali’s economy.
The mining industry in Mali has recently attracted renewed interest and investment from foreign companies. Gold and phosphate are the only minerals mined in Mali although deposits of copper and diamonds do also exist. The emergence of gold as Mali’s leading export product since 1999 has helped mitigate some of the negative impact of the cotton and Côte d’Ivoire crises.
The development of the oil industry is important due to the country’s dependence on the importation of all petroleum products from neighbouring states. Electricity is provided by the parastatal utility, Electricite du Mali.
Mali is a major recipient of foreign aid from many sources, including multilateral organizations (most significantly the World Bank, African Development Bank, and Arab Funds), and bilateral programs funded by the European Union, France, United States, Canada, Netherlands, and Germany. Before 1991, the former Soviet Union had been a major source of economic and military aid, including construction of a cement plant and the Kalana gold mine. Currently, aid from Russia is restricted mainly to training and provision of spare parts. Chinese aid remains high, and Chinese-Malian joint venture companies have become more numerous in the last 3 years, leading to the opening of a Chinese investment center. The Chinese are major participants in the textile industry and in large scale construction projects, including a bridge across the Niger, a conference center, an expressway in Bamako, and a new national stadium scheduled to be completed for the Africa Cup competition in 2002.
In 1998, U.S. assistance reached over $40 million. This included $39 million in sector support through United States Agency for International Development (USAID) programs, largely channeled to local communities through private voluntary agencies; Peace Corps program budget of $2.2 million for more than 160 Volunteers serving in Mali; Self Help and the Democracy Funds of $170,500; and $650,000 designated for electoral support. Military assistance includes $275,000 for the International Military Education Training (IMET) program, $1.6 million for the African Crisis Response Initiative (ACRI), $60,000 for Joint Combined Exercise Training (JCET), and $100,000 for Humanitarian Assistance.