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PRESS/TPRB/88
13 November 1998
DIVERSIFICATION OF EXPORTS SHOULD STRENGTHEN
MALI'S TRADE
Mali should diversify its exports, lower the charges levied on exports and extend its WTO
commitments in order to take advantage of multi lateral trade liberalization and attract foreign
investment.
A new report by the World Trade Organization, the first one on Mali's trade policies and
practices, underlines the major liberalization efforts unilaterally carried out by Mali, particularly in the
agricultural and mining sectors.  It notes, nevertheless, that taxes, special authorizations and
prohibitions are unlikely to encourage exports.
The WTO Secretariat's report and the general policy statement submitted by the Government
of Mali will be used as a basis for the review of Mali's trade policies and practices, which will take
place at the same time as the review of Burkina Faso, on 18 and 20 November 1998.
The WTO report states that, since 1988, the Government of Mali, with the support of the
International Monetary Fund and the World Bank, has carried out a number of reforms to open up the
economy and strengthen the role of the private sector.  As part of these reforms, the Government has
privatized public enterprises, lightened the tax burden, dismantled non-tariff barriers and significantly
simplified the structure of import duties and taxes.  In order to boost exports, Mali has eliminated
export duties and taxes on a large number of products, introduced a value-added tax (VAT) andestablished free zones.
The major exports are cotton (50 per cent of its merchandise export earnings), of which it is
the biggest producer in sub-Saharan Africa, gold (17 per cent) and livestock products.  The report
indicates that there is a chronic deficit in Mali's trade balance, and exports only cover about half ofimports.  This is a contributory factor in the structural deficit of the current account, sustained by the
negative balance in services caused by large outgoings for insurance and interest on the debt, whichPRESS/TPRB/88
Page  2/3
MOREincreased as a result of the devaluation of the fr anc of the Communauté financière africaine (African
Financial Community).
Mali levies several duties and taxes on imports, including a customs duty of 0 or 5 per cent, a
fiscal import duty of 0, 10 or 25 per cent, a servi ce provision contribution of 3 per cent on petroleum
products and 5 per cent on other products, a short-term import tax of 55 per cent on sugar.  The simplearithmetic average of these duties is 22.1 per cent, with a minimum of 3 per cent and a 35 per cent
maximum, rising to 75 per cent on sugar.  Import duty rates are not highly dispersed and show a
generally negative escalation from unprocessed products to semi-finished goods.  In addition to
import duties and taxes, value added tax at two rates (10 per cent and 15 per cent) has been in force
since 1991.
Mali's main trading partners are Côte d'Ivoire, the European Union and Senegal.  More than
half of its export earnings derive from developing countries, in particular those of the West African
subregion.  Switzerland is a major outlet for Malian cotton.
Mali is a founder member of the West Af rican Economic and Monetary Union (WAEMU).
The aim of this organization is to create an ec onomic union by bringing about the convergence of
economic policies and the harmonization of fiscal legislation.  Monetary integration, with a central
bank and a common currency, has already been achieved.  The next stage is the creation of a customs
union with a Common External Tariff (CET) with four  rates (1 per cent, 6 per cent, 11 per cent and
21 per cent).  Implementation of the CET, which should lessen the number of duties levied began in
July 1998 and should be completed in January 2000.  Mali is also a member of the EconomicCommunity of West African States (ECOWAS) whose treaty also provides for the creation of a
customs union.
Under the Lomé Convention and the generalized system of preferences, Mali enjoys the
preferential treatment granted to developing countr ies.  The report notes, however, that the scope of
this non-reciprocal preferential treatment is limited owing to the small number of products exported
by Mali, namely raw materials that are generally subject to zero or very low MFN (most-favoured-
nation) import duties in the importing countries.
Agriculture accounts for about 48 per cent of Ma li's real GDP and 80 per cent of employment
of the active population.  Though Mali has undertaken substantial liberalization reforms in this area,
there is still State participation in the cotton sector and State enterprises are also involved in the
production and marketing of livestock products and rice.  There are several prohibitions and special
export authorizations, in particular for certain cattle, hides and skins.
The manufacturing sector remains undeveloped in Mali and contributes only some 13 per cent
of GDP.  Mali has substantial potential in the textile and agri-food industries, but the negativeescalation of import duties does not favour the development of this sector.  The introduction of the
CET should reduce import duties on raw materials.
Dominated by informal trading, the services sector accounts for about 40 per cent of GDP.
Owing to the low level of commitments at the multilate ral level, Mali is not fully benefiting from the
liberalization efforts it has already made unilaterally.  For the moment, Mali's limited bindings do not
guarantee investors, and in particular foreign investors, that the liberalization reforms will be
irreversible.
The report states that the mining sector in Mali has been revived through the exploitation of
gold deposits.  The guarantees and various advantages, including tax and customs advantages, offered
by the 1991 Mining Code have helped to revive mining in Mali.  The State, however, reserves thePRESS/TPRB/88
Page 4
MOREright to hold up to 20 per cent in the capital of mining enterprises.  Exports of precious substances in
the unprocessed state are prohibited, and sales of these substances in the processed state are subject to
the 3 per cent service provision contribution.  The report suggests that the provisions on State
holdings and the prohibition on unprocessed precious substances be reviewed because they may
discourage investment and foster the proliferation of informal activities.
Intellectual property rights are protected in Mali by the Bangui Industrial Property Agreement
signed by some 15 African countries (the African Intellectual Property Organization (AIPO) was set
up under this Agreement) and a 1984 Copyright Law.  Work is going on within the AIPO to bring the
provisions of the Bangui Agreement into conformity with the obligations of WTO Members under the
Agreement on Trade-Related Aspects of Intellectual Property Rights.  Counterfeiting in Mali
primarily concerns medicinal products, audio tapes, sporting goods and leading brands. There are few
convictions for piracy and counterfeiting.  Aware of the increase in consumption of counterfeitmedicines owing to the higher cost of imports foll owing the devaluation of the CFA franc, the Malian
authorities have decided not to levy import duties and taxes on essential medicines.
The report concludes that the introduction of the CET could increase nominal tariff protection
and effective rates of protection in Mali.  As fiscal concerns generally outweigh the protectionistintent in Malian import duties, the complete elimination of export levies could be expected if the CET
brings in more substantial Government revenues.  Apart from fiscal concerns, it is the lack of
information on the range and scope of the WTO Agreements, and on the contours of Members'
obligations, that explains the introduction of measures such as the service provision contribution,
which is not included in the list of other duties and charges bound by Mali.  Accordingly, assistanceaimed at enhancing awareness of the contents of the WTO Agreements could help to ensure Malian
compliance.
Note to editors
The reports by the WTO Secretariat and the Government of Mali, will be discussed by the
WTO Trade Policy Review Body (TPRB) on 18 and 20 November 1998.  The WTO's TPRB conducts
a collective evaluation of the full range of trade policies and practices of each WTO Member at
regular periodic intervals and monitors the trends and developments that may have an impact on the
global trading system.  The Secretariat's report covers all aspects of Mali's trade policy, includingdomestic laws and regulations, the institutional framework, trade policies by measure and by sector.
Since the WTO came into force, the "new areas" of services trade and trade-related aspects of
intellectual property rights are also covered.
The summary observations in the Secretariat's report and extracts from the Government's
report are attached.  The full text of these reports are available from the WTO Secretariat on request
(Telephone No. 41 22 739 5019).  They are also available for journalists in the Newsroom of theWTO Website (www.wto.org).  Together with the report of the TPRB's discussion and the Chairman's
summing up, these two reports constitute the full  review of Mali's trade policy, which will be
published in due course and will be available from the WTO Secretariat, Centre William Rappard,
154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been completed: Argentina (1992),
Australia (1989, 1994 and 1998), Austria (1992), Ba ngladesh (1992), Benin (1997), Bolivia (1993),
Botswana (1998), Brazil (1992 and 1996), Ca meroon (1995), Canada (1990, 1992, 1994 and 1996),
Chile (1991 and 1997), Colombia (1990 and 1996), Co sta Rica (1995), Côte d'Ivoire (1995), Cyprus
(1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992), El Salvador(1996), the European Communities (1991, 1993, 1995 and 1997), Fiji (1997), Finland (1992), Ghana
(1992), Hong Kong (1990 and 1994), Hungary (1991 and 1998), Iceland (1994), India (1993 andPRESS/TPRB/88
Page 5
MORE1998), Indonesia (1991 and 1994), Israel (1994), Ja maica (1998), Japan (1990, 1992, 1995 and 1998),
Kenya (1993), Korea, Rep. of (1992 and 1996), Lesotho (1998), Macau (1994), Malaysia (1993 and
1997), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), Namibia (1998), New
Zealand (1990 and 1996), Nigeria (1991 and 1998) , Norway (1991 and 1996), Pakistan (1995),
Paraguay (1997), Peru (1994), the Philippines (1993), Poland (1993), Romania (1992), Senegal
(1994), Singapore (1992 and 1996), Slovak Republ ic (1995), the Solomon Islands (1998), South
Africa (1993 and 1998), Sri Lanka (1995), Swazila nd (1998), Sweden (1990 and 1994), Switzerland
(1991 and 1996), Thailand (1991 and 1995), Tunisia (1994), Turkey (1994 and 1998), the United
States (1989, 1992, 1994 and 1996), Uganda (1995),  Uruguay (1992), Venezuela (1996), Zambia
(1996) and Zimbabwe (1994).PRESS/TPRB/88
Page 6
MORETRADE POLICY REVIEW BODY
MALI
Report by the Secretariat – Summary Observations
The Economic environment
Mali is a West African least-developed country (LDC) which became independent on
22 September 1960.  Upon independence, Mali opted for a planned economy on the basis of five-year
programmes drawn up by the State.  In order to und erpin this option, State enterprises were set up in
all sectors.  Mali left the franc zone and created the Malian franc in 1962.
The inherent limits of this development strategy (in particular poor management of bloated,
State-subsidized government enterprises), compounded by Mali's "natural" economic difficulties as a
land-locked LDC, prompted a first set of reforms in 1982, at a time when the country was
accumulating internal and external payment arrears.   Mali rejoined the West African Monetary Union
and hence the franc zone in 1984.  Notwithstand ing a significant financial improvement, the
adjustment effort was interrupted in 1987.
The first structural adjustment programmes supported by the International Monetary Fund and
World Bank were established in 1988.  These programmes, aimed at opening up the economy and
strengthening the role of the private sector, incl uded a sectoral adjustment programme for State-
owned enterprises (PASEP) and an agricultural  sector adjustment programme (PASA).  Two
enhanced structural adjustment facilities were arranged, the first for 1992-1996 and the second for
1996-99.  Implementation of these programmes was interrupted in January 1991 owing to socio-
political disturbances which led to the establishment of a democratic regime in Mali, and between
August 1993 and April 1994 owing to renewed socio-political tension.
These various reforms led to a break with the policy of State-planning of the economy.
Public enterprises were wound up, reorganized and/or privatized, the tax burden lightened, and the tax
and customs services were reorganized.  The reforms also brought about the dismantling of non-tariff
barriers to trade on most products, the elimination of export duties and taxes on many products, and asignificant simplification of the structure of import duties and taxes.  The devaluation in 1994 of the
African Financial Community franc (CFA franc), as a result of which the parity moved from CFAF 50
to 100 for one French franc, boosted domestic production of cotton (exports of which increased
sharply), cereals, and fruit and vegetables.  The real GDP growth rate (rising steadily since 1994), has
generally been higher than that of population growth, which is about 2 per cent.  After peaking at
23.2 per cent in 1994 (due to the devaluation), inflation has been brought down to 7 per cent.
Nevertheless, the reforms have had generally little effect on the Government deficit (except in1996-97) and the balance of payments (except in 1997).
Agriculture accounts for about 48 per cent of Ma li's real GDP and 80 per cent of employment
of the active population.  Mali obtains about 50 per cent of its merchandise export earnings from
cotton, of which it is the biggest producer in sub-Saharan Africa.  Gold mining was responsible for therevival of mining activity:  gold accounted for 17 per cent of merchandise export earnings in 1996.
The industrial manufacturing sector remains undeveloped and contributes only some 13 per cent of
GDP.  It is largely directed towards the domestic market and produces essentially textile and food
products.  The services sector accounts for about 40 per cent of real GDP, predominantly accounted
for by commercial services:  these attract the bulk of informal activities, which represented about29 per cent of Malian GDP in 1994.PRESS/TPRB/88
Page 7
MOREMalian exports, consisting primarily of cotton, livestock products and gold, are vulnerable to
world price fluctuations and climatic factors.  Exports cover only about half of imports, leading to a
chronic trade deficit.  With a chronic deficit in se rvices trade owing to large outgoings for freight and
insurance services and debt servicing, compounded by the devaluation of the CFA franc, the current
account also has a structural deficit.
Mali's main trading partners are Côte d'Ivoire, the European Union and Senegal.  Mali derives
more than half of its export earnings from developing countries, in particular those of the West
African subregion.  The action taken to create a customs union among West African countries which
use the CFA franc (the countries of the West African Economic and Monetary Union - WAEMU) and
the substitution effect on non-WAEMU imports induced by the devaluation of the CFA franc have
boosted trade with other countries of the Union, especially Côte d'Ivoire and Senegal.  Switzerland is
also a major outlet for Malian products, especially cotton.  From the European Union, Mali importscapital goods, building materials and chemicals and pharmaceuticals.  Rice is imported from Asian
countries and other food products from the other countries of the West African subregion, which in
turn import live animals and fish from Mali.
Institutional framework
Under its 1992 Constitution, Mali is a pluralist democracy.  The President of the Republic
(Head of State) is elected by universal suffrage for a term of five years, renewable once only.  The
President appoints the Prime Minister (Head of Government) and the other members of the
Government on the proposal of the Prime Minister .  The single-chamber parliament (National
Assembly) votes the laws.  The High Council of the Communities is responsible for studying and
issuing a reasoned opinion concerning all local and regional development policies.  The Economic,
Social and Cultural Council makes proposals for reforms and must be consulted on all bills or
provisions.
Since 1988, Mali has carried out a sweeping revision of its laws and regulations in order to
back up the liberalization of its economy.  The Investment Code which came into force in March 1991
grants investors many tax and customs advantages and guarantees commercial freedom and freedom
to repatriate capital for foreign investors.  Nevertheless, for reasons of public utility, the State reserves
the right to limit foreign investment in certain sectors (defence and security).  Mali's mininglegislation offers administrative, mining and real -estate guarantees, as well as guarantees of non-
expropriation and of transfer of mining-linked funds, including transfers of staff savings, in addition
to the tax and customs benefits.  Within WAEMU, a community investment code is planned for 1998.
This would in principle lead to the elimination of duty and tax exemptions on imports of capital
goods, which are subject to low rates under the WAEMU Common External Tariff (CET).
Mali became a WTO Member on 31 May 1995, after having applied the GATT since 1967.
Mali grants most-favoured-nation (MFN) treatment to all countries except Israel.  Like other WTO
Members, Mali adopted the whole of the results of the Uruguay Round.  It benefited, among other
things, from the preferential and differential treatment granted to LDCs, in particular in the form of
waivers or delayed application of certain provisions, and it should profit above all from the
strengthening of rules and disciplines in the multilateral trading system and particularly in the sectorsof importance to it, such as agriculture, includin g livestock farming.  Mali's main concern is to
increase and diversify production so as to take fuller advantage not only of existing opportunities but
also of those that should result from further multi lateral liberalization.  While recognizing the need to
continue to improve the quality of its products, Mali highlights technical barriers to trade as one of the
areas calling for special surveillance in the multilateral trading system.PRESS/TPRB/88
Page 8
MOREMali is a founder member of the West African Economic and Monetary Union (WAEMU).
The aim of this organization is to create an ec onomic union by bringing about the convergence of
macroeconomic and sectoral policies and the harmonization of fiscal legislation of member countries;
monetary integration, with a common central bank (the Central Bank of West African States) and
currency (the African Financial Community Franc – CFAF), has already been achieved.  The structure
of the Common External Tariff (CET) with four rates (1 per cent, 6 per cent, 11 per cent and 21 percent, plus the Community levies totalling 1 per cent) has been drawn up, and implementation was due
to begin in July 1998 and end in January 2000, by which date the customs union should have been
completed.  Mali is also a member of the Economic  Community of West African States (ECOWAS),
whose Treaty also provides for the creation of a customs union;  the timetable for establishing this
union has not been respected.
As a signatory to the Fourth Lomé Convention, Mali receives aid from the European Union
and benefits from the Stabilization System for Export Earnings (STABEX).  However, Mali has
received no compensation under STABEX since 1992 as it has not suffered from lost export earnings
(more specifically of cotton exports).  In addition, under the Convention, many Malian exports to the
EU enjoy non-reciprocal preferential treatment in the form of exemption from import duties.
Likewise, Malian goods enjoy non-reciprocal preferential access to the markets of developedcountries other than the European Union member St ates under the generalized system of preferences.
The scope of this non-reciprocal preferential treatment is limited, especially owing to the small
number of products exported by Mali, namely raw materials that generally are subject to zero or very
low MFN import duties in the importing countries.
Mali has also signed several bilateral agreements in the field of international trade.  The
Agreement signed with Algeria in July 1996 provides for payment and credit facilities, and contains
provisions relating to the organization of or participation in trade fairs or exhibitions, as well as to
intellectual property rights. As at July 1998, Mali had not been involved in any dispute settlement
proceedings under the GATT, the WTO or under any other trade agreement to which it is a party.
Trade policy features
Trade policy instruments and their effects
Today, Mali's trade policy is essentially based on duties and taxes.  On the export side, the
only levies in force are the service provision contribution (CPS) of 3 per cent on the f.o.b. value of
gold and the tax of CFAF 7.5 per kg. of fish, which are also levied on domestic sales.  Mali adopted
the Harmonized System Nomenclature in 1994.  Several duties and taxes (entry duties) are levied on
imports.  These import duties, the number of which will be reduced with the introduction of the CET,
consist of:  a customs duty (DD) of zero or 5 per cen t;  a fiscal import duty (DFI) of zero, 10 or 25 per
cent;  a service provision contribution (CPS) of 3 per cent on petroleum products and 5 per cent on
other products;  a community solidarity levy (PCS) and a community levy (PC) of 0.5 per cent each,
levied on non-WAEMU and non-ECOWAS imports respectively;  and a short-term import tax (TCI)
levied on sugar at a rate of 55 per cent (which is reduced during the month of Lent and restored to the
previous level following this "sensitive" period).  The simple arithmetic average of these duties
(excluding the PCS and the PC) is 22.1 per cent, with a minimum of 3 per cent and a 35 per cent
maximum.  This maximum rises exceptionally to 75 per cent on sugar as a result of the TCI.  Importduty rates are not highly dispersed and show a generally negative escalation from unprocessed
products to semi-finished goods.  The least-taxed goods are those of the chemical and pharmaceutical
industries, non-electrical machinery and petroleum.  The most heavily taxed are fishery products,
tobacco, clothing, leather products, footwear, furniture (other than metal furniture), pottery and china.
In addition to import duties and taxes, value-added tax at two rates (10 per cent and 15 per
cent) has been in force since 1991.  Exports are zero-rated for the purposes of reimbursement of thePRESS/TPRB/88
Page 9
MOREVAT levied on the inputs and factors of production used in their manufacture.  A service provision tax
(TPS) is also payable by all persons who provide services and have an annual turnover of more than
CFAF 1 million.  The TPS also has a reduced rate of 7 per cent which is applied to transport,
entertainment, water supply and evacuation activities, and telephony.  Other services are subject to the
normal 15 per cent rate.  A special tax on certain products (ISCP) is also levied on a number of goods.
Import duties and taxes are charged on the c.i.f. value, and excise duties on the c.i.f. value pluscustoms duties.  However, the amount of the ISCP is included in the VAT assessment basis.
Under the Uruguay Round, Mali bound the customs duty rates applicable to agricultural
products (like other WTO Member countries) and those applicable to products coming under
Chapters 44 (wood and wood products), 81 (other base  metals) and 92 (musical instruments) of the
Harmonized System.  A 60-per cent ceiling rate was granted for this purpose by Mali for all these
products.  The other duties and charges on imports of these products were bound at 50 per cent.  Thusthe bindings cover a relatively small number of products, and leave Mali a great deal of room for
manoeuvre in view of the large gap between the bound rates and rates actually applied.  In addition,
the CPS is currently applied although it does not appear in the list of other duties and charges bound
by Mali.  With the introduction of the CET, the WAEMU Commission intends to renegotiate the tariff
concessions of all member countries, including those on the old lists for which bindings were made ata time when the countries were colonies.
The only prohibitions still in force in Mali exist for reasons of security or health, or pursuant
to international conventions to which the country is a party.  However, trade with Israel is banned.
Imports of a c.i.f. value exceeding CFAF 250,000 are subject to the certificate of intention to import
issued by the National Directorate of Economic Affairs (Ministry responsible for trade), under the
import verification programme set in place in 1989.  In this connection, the National Tax Directorate
levies stamp duties and registration fees amounting to CFAF 3,000 per tranche of CFAF 500,000 in
c.i.f. value of imports;  for the first tranche, these duties are set at CFAF 6,000, i.e. CFAF 600 per
sub-tranche of CFAF 50,000 of imports.  In a ddition, imports of an f.o.b. value exceeding
CFAF 3 million are subject to compulsory preshipment inspection by the General Inspection
Company (SGS);  the values certified by the SGS are not binding on the customs administration,
although it appears to have used them in most cases.  With the exception of provisions in trade
agreements which it has signed, Mali does not have laws on rules of origin, nor does it have domestic
legislation on anti-dumping, countervailing or safeguard measures.
The measures taken by Mali to boost exports include the introduction of VAT, the elimination
of duties and taxes on most exports and the creation of free zones.  Under the 1991 Investment Code,
free enterprises (which must export at least 80 per cent of their output) enjoy exemption from all
fiscal, parafiscal and customs duties and taxes.  The Mali Mining Code also provides for exemption
from duties, charges and taxes on exports of mining products as well as on the related turnover and
proceeds of sales.  However, exports of young male bovine animals, aged five years or less and non-sterile breeding female bovine animals are prohibited, except where specifically provided for under
special agreements between Mali and other countr ies wishing to constitute stock-raising centres.
There is also an export prohibition on precious substances (e.g. gold and diamonds) in the
unprocessed state.  Exports of hides and skins are subject to special authorization.  All other products
are subject to the certificate of intention to export (IE).  Stamp duties are levied on the IE for gold andcotton in accordance with the scale of charges applied to certificates of intention to import.
Price freedom and freedom of competition have existed in Mali since 1992.  In special
situations, however, such as times of crisis, the Council of Ministers may regulate prices by decree.
On the other hand, implementation of the State en terprise adjustment programme (PASEP) launchedPRESS/TPRB/88
Page 10
MOREin 1988 has proved rather slow.  At the end of 1997, a total of 20 State enterprises had been dissolved
or wound up, and 40 wholly or partially privatized.  Other enterprises had merely been reorganized.
Intellectual property rights are protected in Mali by the Bangui Agreement on Industrial
Property signed by some 15 African countries, under which the African Intellectual Property
Organization (AIPO) was set up, as well as by a 1984 Copyright Law.  Work is in hand at AIPO tobring the provisions of the Bangui Agreement into conformity with the obligations of WTO Members
under the Agreement on Trade-Related Aspects of Intellectual Property Rights.  Counterfeiting in
Mali primarily concerns medicinal products, audio tapes, sporting goods and leading brands.  Piracy
and counterfeiting give rise to infrequent convictions, which are only of a token nature.  Aware of the
increase in consumption of counterfeit medicines, owing to the higher cost of imports following the
devaluation of the CFA franc, the Malian authorities have decided not to levy import duties and taxes
on essential medicines.
Policies by sector
Through the reforms undertaken since 1988, Mali has substantially liberalized its economy
and reduced State participation in production activities.  In the agricultural sector, most activities,including production and marketing, have been liberalized for all products with the exception of
cotton and tobacco.  Nevertheless, aside from these two subsectors, State enterprises are directly
involved in the production and/or marketing of livestock products and rice.  The agricultural sector
has the highest tariff protection, followed by mining and quarrying, and then manufacturing.  The
55 per cent TCI makes sugar the most heavily protected product in terms of import duties (75 percent).
The various advantages, including tax and customs advantages, offered by the 1991 Mining
Code have helped to revive mining in Mali, which is carried out both industrially and non-
industrially;  only gold, phosphates and some building materials are exploited primarily on anindustrial basis.  Under certain provisions of the Code, the State reserves the right to hold up to 20 per
cent (including a free holding of at least 10 per cent) in the capital of mining enterprises.  Mining
resources are subject to an ad valorem  tax of 3 per cent on pit-head value.  Exports of precious
substances (e.g. gold) in the unprocessed state are prohibited;  sales of these substances (in the
processed state) are subject to the 3 per cent CPS.  These measures, especially prohibition, haveencouraged the proliferation of informal activities, including non-industrial processing and sales of
gold and gold products.  The multiplicity of categories of rights (currently seven), all accompanied by
establishment agreements, are among the most restrictive provisions of the Malian Mining Code,
narrowing the range of activities to which each category of right gives access, and increasing costs,
beginning with those of administrative procedures.  A review of the Mining Code is planned so as to
make the sector more attractive to investors and promote exports of processed products.
Mali has substantial potential in the textile and agri-food industries, which have contributed to
the signs of revival of the manufacturing sector following the devaluation of the CFA franc.
However, excluding exemptions, the negative escalation of import duties does not favour the
development of the manufacturing sector;  the introduction of the CET should reduce import duties on
raw materials.  Furthermore, the high cost of energy, transport and telecommunications, climaticdifficulties jeopardizing regular supplies of agricultural inputs, the higher cost of inputs (largely
imported) following devaluation, problems of access to financing and of obtaining land for industrial
sites, and low purchasing power are among the factors hindering the development of Mali's industrial
sector.
Dominated by informal trading, the services sector has been substantially liberalized.  In
branches such as tourism, buyers have yet to be found for enterprises (including hotels).PRESS/TPRB/88
Page 11
MORETelecommunications services remain the main service activity in which the State is still heavily
involved, through a public enterprise, the Mali Telecommunication Company (SOTELMA):  this
explains the high cost of these services in Mali (among the highest in the subregion).  Owing to the
low level of its commitments at the multilatera l level, Mali is not fully benefiting from the
liberalization efforts it has already made unilaterally.  Mali's bindings remain limited to modes of
supply of adult education services in the handicraft sector, and hotel and catering services, which doesnot guarantee investors, and in particular foreig n investors, that the existing situation will be
irreversible.
Trade policies and trading partners
Mali has unilaterally carried out major liberalization efforts under the structural adjustment
programmes being implemented since 1988.  The effects of these reforms are appreciable on theagricultural and mining sectors but remain limited.  In the mining sector, apart from the multiplicity of
categories of rights, it is primarily the provision relating to State participation in the capital of
companies which is worth reviewing as it can hardly promote investment.  The introduction of
measures to promote exports of processed mining products (one of the current objectives of trade
policy) should be a clear feature of the code being drawn up, as the present prohibition onunprocessed precious substances could foster smuggling unless a suitable environment is created to
encourage local processing.  Again, the charges levied directly or indirectly on exports of the main
products and the special authorization to which exports of hides and skins are subject are unlikely to
encourage exports.
The introduction of the CET could increase nominal tariff protection and effective rates of
protection by increasing the (positive) escalation of import duties.  As fiscal concerns generally
outweigh the protectionist intent in Malian import duties, the complete elimination of export levies
could be expected if the CET brings in more substantial government revenues.  Apart from fiscal
concerns, it is the lack of information on the range and scope of the WTO Agreements, and on thecontours of Members' obligations, that explains the introduction of measures such as the CPS, which
is not included in the list of other duties and charges bound by Mali.  Accordingly, assistance aimed at
enhancing awareness of the contents of the WTO Agreements could help to ensure Malian
compliance.  This assistance, which would also cover the provisions of the General Agreement on
Trade in Services, could help to increase Mali's  participation in the world trading system and
encourage the binding of certain modes of supply of services it has already unilaterally liberalized.
Commitments of this kind will make the reforms more credible and encourage the flows of
investment, particularly foreign investment, which the country badly needs at present.
Under the integrated programme of technical assistance for LDCs set in place by WTO and
other organizations, Mali has also requested assistance in various fields.  These include the
introduction of trade finance and export promotion structures, the search for foreign trade andinvestment partners, quality control, trade information collection and management, and rationalization
of customs procedures.  Assistance in these fields will help to step up Mali's participation in
international trade and raise the standard of living of its people, and to dispel the fears of
marginalization currently being voiced in Mali.PRESS/TPRB/88
Page 12
MORETRADE POLICY REVIEW BODY
MALI
Report by the Government – Summary
The Republic of Mali is a land-locked country in West Africa covering an area of
1,241,328 km2.  It became independent on 22 September 1960 and is a least-developed country.
A feature of the Malian economy is the marked predominance of the primary sector, which
accounted for 44.37 per cent of GDP in 1996.
Following independence, the Government adopted an interventionist economic policy, which
has led to a number of economic and financial imbalances.
From 1980 onwards, therefore, the Government embarked upon a programme of economic
reform in collaboration with its development partners.
The main planks of the adjustment programme are the liberalization of the economy,
promotion of the private sector through the withdrawal of the State, and the improvement of the
economic environment and legislative and regulatory framework.
The execution of the 1992-95 programme enabled significant economic and social progress to
be made despite social and political tension (demands by corporate bodies, disturbances in the
northern part of the country, etc.).
The macroeconomic objectives have by and large been achieved:  GDP grew by around
3 per cent a year during the period 1992-94 and 6 per cent in 1995;  inflation, as measured by the
GDP deflator, was limited to 2 per cent a year in 1992-3 and held down after the devaluation to
33.2 per cent in 1994 and 12.7 per cent in 1995, with 6.5 per cent in 1996.  The overall budget deficit
was cut from 13.7 per cent to 10.5 per cent of GDP over the same period.  Credit policy has remained
cautious.  The January 1994 devaluation helped to boost exports, which increased fromCFAF 28.9 billion in 1993 to CFAF 157.2 billion in 1994, a rise of 82 per cent.
Consolidation of this economic performance has continued under the new economic and
financial programme which covers the period 1996-98.  This programme has received the support of
the IMF via an agreement under the Enhanced Structural Adjustment Facility (ESAF) and of the
World Bank in the form of an Economic Management Support Loan (EMSL), as well as that of other
bilateral and multilateral funding agencies.
The reform strategy for the period 1997-99, in addition to attempting to balance the budget,
places the development of human resources and control of population growth at the heart of the
Government's development efforts and attaches particular importance to the structural reforms which
are essential in order to make the economy more flexible and diversify production and exports.
The various programmes have assigned the role of engine of economic growth to trade and
the private sector, through the effects which they can have of stimulating and encouraging production
and productivity.
The objective of Mali's trade policy is to rehabilitate the domestic market, secure regular and
adequate supplies of consumer and capital goods, secure permanent markets for domestic productsPRESS/TPRB/88
Page 13
both at home and abroad, diversify production and exports, increase exports at an average rate of
15 per cent per annum over the next five years, and improve the operation of the commercial courts.
The reform programmes embarked upon in Mali have led to gradual liberalization of the
economy and less State participation in production.  Within this framework, public enterprises have
been restructured, privatized or wound up in accordance with the programme to reform public
enterprises and the agricultural sector has undergone sectoral adjustment.
Other sectors have been restructured in order to adapt them to the economic context by
improving the legislation and regulations such as the Investment Code, the Mining Code, the
Professional Code, and the Labour Code, etc.
The Government has taken action to promote the energy, tourism, transport and crafts sectors.It aims to increase the effectiveness of the banking system so as to improve financial
intermediation.
The Government has also taken liberal tariff measures to boost trade.  Foreign trade
procedures have been simplified through a system of automatic recording of export and import
operations.
Trade policy is adopted following consultatio n between the Government and the private
sector.
Mali has also signed bilateral, regional and multilateral trade agreements.Bilateral trade is non-discriminatory, but there is preferential trade within the framework of
the West African Economic and Monetary Union (WAEMU) and the Economic Community of WestAfrican States (ECOWAS).
Mali has signed the Lomé Convention and is a founder Member of the WTO.The trade policy measures applied by Mali are mainly customs tariffs, the only means of
protecting production.  There is also preshipment inspection with the aim of guaranteeing fiscal
revenue and establishing fair competition among economic operators.
Mali also faces problems on the domestic market because of inadequate supplies and in
foreign markets due to quantitative restrictions, standards or other regulations applied by some of its
trade partners.
The Government intends to consolidate the liberalization of the economy by adapting the
legislative and regulatory texts and promotion structures to the subregional and international
economic context, with the support of the international community.
END