Mali

Slower growth due to constrained mining and agricultural performances

Growth will be somewhat slower in 2025, impacted by growing insecurity, chronic electricity shortages and disruptions to the mining industry at the beginning of the year. Canadian company Barrick Gold has stopped operating the country's main gold mine, Loulo-Gounkoto. This decision follows the imprisonment of four executives, the blocking of shipments in November and the authorities' seizure of a stock of gold from the mine in January, all of which was originally caused by a disagreement over the retroactive application of the new Mining Code (which allocates a 30% share to the State, as opposed to the 20% provided for in the licence). Although an official settlement of the dispute has not yet been announced, a deal to resume production between the company and the government is likely to be signed during the second half of the year. Mining revenues (10% of GDP and 75% of exports in 2023) should be boosted by the resumption of operations, along with the first lithium revenues following the inauguration of the Goulamina mine last December, which is operated by the company Lithium du Mali and the Chinese company Ganfeng, its main shareholder. Moreover, in the wake of a successful 2023-2024 harvest, cotton yields are conversely expected to fall in 2024-2025 due to unfavorable weather conditions (mainly flooding). Persistent electricity shortages and the impact of insecurity on food prices will lead to inflationary pressures in the first half of 2025. However, these pressures will ease during the second half of the year when retail fuel prices fall, which will benefit private consumption (75% of GDP). The construction of three solar photovoltaic power plant projects with a total capacity of 400 MWp should soon provide a partial response to the energy crisis affecting the country.

A significant deficit with a costly regional funding

Under the 2025 Finance Act, budgetary policy will focus on fiscal consolidation to ensure that revenue growth (10% higher than in the 2024 Amending Finance Act) exceeds expenditure growth (5%). The emphasis will be on improving tax and customs efficiency, with the broadening of the tax base, the digitisation of public services, and above all the progressive application of the new Mining Code passed in 2023. The code allows the state to acquire up to 20% of a mining project (compared to 10% previously), in addition to the 10% acquired free of charge, and eliminates certain tax and customs exemptions. New and controversial taxes on telecommunications services, mobile payments and alcoholic beverages have been earmarked to generate revenue that will be used for energy infrastructure and social development projects. However, public workers' salaries and debt servicing, projected at USD 343 million (80% of which relates to regional debt), will weigh on the budget, thus limiting investment in key sectors such as education. Furthermore, the increase in funds allocated to the presidency and the transitional institutions suggests a consolidation of the junta's power, even though more than USD 128 million dollars have been allocated to electoral expenses. In addition, the decrease in resources allocated to the Ministry of Defense, despite growing insecurity in the country, suggests that expenses related to military recruitment could exceed forecasts.

The public deficit will continue to be financed by domestic borrowing, as well as by funds raised on the West African Economic and Monetary Union (WAEMU) market. The country's dependence on the latter, given the exclusion from international financing, implies a high borrowing cost (9.8% for 12-month Treasury bills issued in October 2024). The country has committed to making significant repayments on its debt; USD 1 billion has been allocated in the 2025 budget to domestic and regional debt, while USD 320 million has been slated to repay external debt. Almost USD 300 million had already been repaid by the end of 2024. That said, these efforts will have a limited impact on the risk of indebtedness, which, according to the IMF and the World Bank, should remain moderate due to a possible accumulation of arrears given that 80% of Mali’s domestic debt will mature before 2030. Due to diverging views on financial traceability, the funds from a loan granted by the IMF in April 2024 have not been released. Nevertheless, the Fund and Mali will try to conclude another agreement in 2025, following the example of the other Sahel countries, which, if successful, would encourage the return of international donors.

Despite easing energy prices and rising gold prices, the current account deficit will increase slightly in 2025 as a result of the fall in gold production owing to the dispute between the government and Barrick Gold. Agricultural exports will also suffer due to harvest difficulties. The services deficit will continue, burdened by logistics (mainly freight) and the payment of Russian defence militias (Africa Corps), while tourism revenues will remain minimal due to insecurity. In line with the new mining regulations, several agreements were signed at the end of 2024 and the beginning of 2025 to allow the state to claim a greater share of mining dividends. The repatriation of profits by foreign companies should consequently be reduced. The secondary income surplus will continue to be fed by large expatriates remittances but official aid will continue to be hampered by the deterioration of ties with Western countries. The deficit will be financed mainly by investments towards the extractive sector.

Growing cooperation among the Sahel states in response to the security risk

In the wake of two successive coups d'état in 2020 and 2021, the military junta is being led by Colonel Goïta as the transitional president. Despite the (contested) success of the constitutional referendum of June 2023 over the new draft constitution which scheduled the next presidential election for February 2024, the return to constitutional order is on hold. The election did not take place and was postponed indefinitely, while the 26 March 2024 deadline for the end of the transition also expired. A coalition of many political organisations and civil society groups signed a declaration on 31 March 2024 demanding a return to constitutional order. However, the government has stated that the election cannot be held until the issue of insecurity has been resolved. In addition, the inter-Malian dialogue for peace and national reconciliation, which was held in May 2024 in the absence of the opposition, recommended an extension of the transition period from 2 to 5 years and the option for the head of the junta, Assimi Goïta, to run in the next presidential election. Although the ban on political activity announced on 10 April 2024 was lifted by the junta in July, the repressive measures have not abated, and several political opponents have since been detained.

The junta faces a major security threat. First, the presence of Islamist militants, particularly from JNIM, the Group for the Support of Islam and Muslims linked to al-Qaeda, is increasing in the south of the country. The terrorist attacks against military targets in Bamako in September 2024 (the first attacks in the city since 2015) are indicative of the growing threat. Second, the conflict with the autonomist Tuareg rebels in the north of the country resumed following the collapse in January 2024 of the 2015 Algiers agreements. Government forces will find it difficult to control the northern regions of the country, which will remain under the de facto control of one or the other of these groups. However, driven by the temporary shutdown of production at the Loulo-Gounkoto gold mine, the junta may be tempted to extend its control over artisanal mining facilities in the north to compensate for the losses, thus increasing the risk of confrontation.

Faced with this threat, the junta is intensifying its cooperation with similar regimes in Niger and Burkina Faso. Following the coup d'état in Niger, the three states signed a mutual defence pact in September 2023, ahead of their alliance creating the Confederation of Sahel States in July 2024 and the withdrawal from the Economic Community of West African States (ECOWAS) in January 2025. The creation of a 5,000-strong joint military force for the Sahelo-Saharan states has been announced. But despite Russian support in terms of personnel and equipment, a major improvement in security is not expected given the lack of resources and skills. Russian paramilitaries, who have replaced the French and UN forces, have limited strength and regional experience. In addition, the suspension in early 2025 of the United States Agency for International Development (USAID) programmes could harm socioeconomic conditions in the Sahel and thereby provide an opportunity for jihadist and independence groups to expand their influence.

Last updated:April 2025