Mali: Selected Issues

This Selected Issues paper shows how multiple challenges facing Mali over a number of years have increased economic uncertainty. Specifically, economic agents have less confidence about predicting the future and see an increased risk of negative outcomes. Part of that uncertainty is the unavoidable result of exogenous shocks and global economic developments, but some is also due to policy decisions made by the authorities. Heightened policy uncertainty is expected to weigh on gross domestic product (GDP) growth in Mali by reducing the ability of businesses and households to plan ahead with confidence, which typically results in lower investment and consumption. This paper highlights some ways the authorities in Mali could reduce policy uncertainty, which would create the conditions for stronger GDP growth. The authorities could reduce policy uncertainty by setting out medium-term economic plans and demonstrating their commitment to announced reforms. A transparent and detailed medium-term policy framework would provide the basis for strong and sustainable economic growth in Mali and would help households and businesses to plan ahead. For example, setting out expected future corporate tax rates would help businesses to prepare their budgets.