VZCZCXRO0836
RR RUEHMA RUEHPA
DE RUEHBP #0068/01 0331409
ZNR UUUUU ZZH
R 021409Z FEB 09
FM AMEMBASSY BAMAKO
TO RUEHC/SECSTATE WASHDC 9969
INFO RUCPDOC/USDOC WASHDC 0185
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 0186
RUEHZK/ECOWAS COLLECTIVE
RUCPCIM/CIMS NTDB WASHDC

UNCLAS SECTION 01 OF 08 BAMAKO 000068 
 
DEPARTMENT FOR EB/IFD/IOA, AF/W, AND AF/EPS 
DEPARTMENT PLEASE PASS AID/AFR 
DEPARTMENT PLEASE PASS OPIC/RO'SULLIVAN, EXIM BANK, AND USTDA 
USDOC FOR 3131/USFCS/OIO/ANESA/RMARRO/MSTAUTON 
USDOC FOR 4510/MAC/ANESA/OA/SMILLER/SLOUCIF 
USDOC FOR ITA/JKOZLOWICKI 
TREASURY FOR DO/JMACLAUGHLIN 
USTR FOR JKALLMER 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV ECON ETRD EIND EAID EFIN KTDB OPIC USTR ELAB
PGOV, ML 
SUBJECT: INVESTMENT CLIMATE STATEMENT MALI: FY 2009 
 
REF: 08 STATE 123907 
 
¶1. In response to reftel, this cable provides the 2009 Investment 
Climate Statement for Mali. 
 
¶2. Investment Climate Statement: 
 
¶A. Country Investment Policies and Practices. 
 
A.1.  Openness to Foreign Investment: 
 
The Malian government has made efforts to encourage foreign 
investment.  It treats domestic and foreign direct investment 
equally.  The series of enhanced structural adjustment facility 
(ESAF) agreements signed by the IMF/World Bank and Mali and in place 
since 1992 encourages the mobilization of external resources to 
boost investment.  The government's national strategy to fight 
poverty presented to the IMF, World Bank and other donors emphasizes 
the role of the private sector in developing the economy. 
 
In the framework of past structural adjustment programs, the 
investment, mining, commerce and labor codes encourage investment 
and seek to attract foreign investors in particular.  The Malian 
government has instituted policies promoting direct investment and 
export-oriented businesses.  Mali guarantees the repatriation of 
capital and profit. 
 
Foreign investors can own 100 percent of any businesses they create. 
 They can also purchase shares in parastatal companies being 
privatized or in other local companies.  Foreign companies may also 
start joint-venture operations with Malian enterprises. 
 
Foreign investors go through the same screening process as domestic 
investors.  In theory, all investors go through the "guichet unique" 
(one-stop procedure) to have a business application processed. 
However, the International Finance Corporation's (IFC) Doing 
Business 2009 report ranked Mali 162 of 181 countries on the ease of 
starting a business, noting that it takes an average of 11 
procedures and 26 days to register and open a business in Mali. 
Criteria for granting authorization under the investment code 
include the size of capital investment, the potential for 
value-added, and the level of job creation. 
 
Foreign investors sometimes report that tax collectors interpret tax 
laws to discriminate against foreign companies or companies with 
foreign capital.  The tax system remains complicated in spite of 
ongoing efforts to improve it. 
 
The Investment Code gives the same incentives to both domestic and 
foreign companies for licensing, procurement, tax and customs duty 
deferrals, export and import policies, and export zone status if all 
production is to be exported.  Export taxes, import duties, and 
price controls have been reduced or eliminated as part of ongoing 
economic reforms.  Work is proceeding to harmonize the investment 
for all WAEMU member countries.  The investment guide approved by 
the government in 2007 provides useful information on how to do 
business in Mali and helps protect potential investors, whether 
domestic or foreign.  The Investment Code was revised in 2005 to 
include more incentives.  Companies benefiting from the new code may 
be exempted from paying duties on imported equipment and machinery. 
They may also get tax exemption on the use of local raw materials. 
The Code also allows for the negotiation of specific incentives on a 
case by case basis.  In September 2005, the government created a new 
agency, Agence pour la Promotion de l'Investissement (API-Mali), in 
charge of investment and export zone management to facilitate the 
creation of domestic and foreign companies.  Mali has also created, 
with World Bank support, a Presidential Investment Council.  This 
Council is comprised of foreign and national businesspeople, and is 
aimed at improving the business climate in Mali and identifying best 
prospects for investment. 
 
 
A.2.  Conversion and Transfer Policies: 
 
The Investment Code allows the transfer of funds associated with 
investments, including profits. 
 
As a West African Economic Monetary Union (WAEMU) member, Mali uses 
the CFA franc currency.  Linked to the Euro, the CFA is fully 
 
BAMAKO 00000068  002 OF 008 
 
 
convertible at a rate of Euro 1 = CFA franc 655.957.  No parallel 
conversion market exists because the CFA franc is a fully 
convertible currency supported by the French treasury, which ensures 
a fixed rate of exchange. 
 
As of January 2009 the U.S. Embassy purchased local currency at a 
rate of approximately CFA franc 495 per one U.S. dollar.  The U.S. 
Embassy obtains currency through the Charleston Financial Service 
Center in Charleston, South Carolina, and a local bank. 
 
The CFA franc was devalued in January 1994. According to officials 
from the central bank BCEAO, devaluation in the short term is 
unlikely.  In the medium and long term, however, the political 
situation in Cote d'Ivoire and its impact on the economy of the 
WAEMU countries will continue to affect the stability of the CFA. 
 
There are no limits on the inflow or outflow of funds for 
remittances of profits, debt service, capital, or capital gains.  In 
the CFA zone there is no restriction on the export of capital 
provided that adequate documentation to support a transaction is 
presented.  Most commercial banks have direct investments in western 
capital markets. 
Central bank rules require that all remittances go through its 
channels, with supporting commercial documents required.  Exceptions 
are occasionally made as part of incentive agreements, as in one 
case where the government allowed a British mining company to have 
an offshore bank account.  No physical transfer of funds is 
authorized outside the borders of the CFA zone.  It takes less than 
a week (usually 3 working days) to remit funds abroad. 
Mali is also a member of the larger Economic Community of West 
African States (ECOWAS).  ECOWAS encourages investment between and 
among member countries to promote economic integration by 
eliminating trade barriers.  Fair competition, profitability and 
economic benefits are criteria used to assess eligibility for 
investment incentives. 
 
 
A.3.  Expropriation and Compensation: 
 
Expropriation of private property for public purposes is rare.  The 
only known expropriation against a foreign company occurred in the 
early 1960s.  By law, the expropriation process should be public and 
transparent and in accordance with the principles of international 
law.  Compensation based on market value is awarded by court 
decision.  The Malian constitution calls for an independent 
judiciary, substantially reducing the risk of "creeping 
expropriation". 
 
The government may expropriate property for public projects (major 
road or dam construction), in cases of bankrupt companies that have 
had a government guarantee for their financing, or in certain cases 
when a company has not complied with the requirements of an 
investment agreement with the government.  In July 2000 the 
government expropriated land in the vicinity of the Bamako city 
airport for air safety reasons.  Notifications of the expropriation 
were sent via direct mail and published in public and private media. 
 
 
 
A.4.  Dispute Settlement: 
 
Disputes occasionally arise between the government and foreign 
companies.  Some cases involve wrongdoing on the part of companies; 
some involve corrupt government officials. 
 
In November 1991, an independent commercial court was established 
with the encouragement of the U.S. government to expedite the 
handling of business litigation.  Commercial courts are located in 
Bamako, Kayes, and Mopti.  In areas where there is no commercial 
court, disputes are first heard at local courts known as "Tribunal 
de Premier Instance."  Since inception, the commercial court has 
handled cases involving foreign companies.  The court is staffed by 
magistrates assisted by elected Malian Chamber of Commerce and 
Industry representatives.  Teams composed of one magistrate and two 
Chamber of Commerce and Industry representatives conduct hearings. 
The magistrate's role is to ensure that decisions are rendered in 
accordance with applicable commercial laws, including 
internationally recognized bankruptcy laws, and that court decisions 
are enforceable under the law. 
 
BAMAKO 00000068  003 OF 008 
 
 
 
The judicial system is slow and inefficient and widely reputed to be 
corrupt.  Low salaries and inadequate resources compromise the 
impartiality of the judicial system.  In 2006 an appeals court 
ordered an American company to pay damages to a Chinese company, 
even though it was the American company that had originally filed 
charges against the Chinese firm alleging trademark infringement. 
In January 2009 the Malian Supreme Court overruled the appeals 
court, and sent the case back to the appeals court for a new 
hearing.  Litigation in this case is ongoing.  U.S. companies, bound 
by anti-corrupt practices legislation, may feel at a disadvantage 
when it comes to legal proceedings vis-`-vis other foreign companies 
that are not bound by similar legislation. 
 
The Investment Code allows a foreign company that has a signed 
agreement with the government to refer to international arbitration 
any case that the local courts are unable to resolve. 
 
Mali is a member of the African Organization for the Harmonization 
of Business Law (OHADA) and has ratified the 1993 Treaty creating 
the Joint Arbitration Court.  OHADA has a provision for allowing 
litigation between foreign companies and domestic companies or the 
government to be tried in an appellate court outside of Mali.  Mali 
is a member of the International Center for the Settlement of 
Investment Disputes (ICSID - also known as the Washington 
Convention).  Mali is a member of the New York Convention of 1958 on 
the recognition and enforcement of foreign arbitrage awards.  Mali 
has been a member of the World Bank Multilateral Investment 
Guarantee Agency (MIGA) since 1990. 
 
 
A.5.  Performance Requirements/Incentives: 
 
The investment code offers incentives to companies that reinvest 
profits to expand existing business or diversify in another relevant 
sector.  The code also encourages the use of locally sourced inputs 
which could lead to a tax exemption.  Local value-added is one 
criteria used for approving investment projects and in calculating a 
tax exemption period. 
 
There is no requirement that Malians own shares in a foreign 
investment or that foreign equity be reduced over time.  In the case 
of joint ventures with the government, the government share may not 
exceed 20 percent ownership.  OHADA regulations specify that a 
company with less than 35 percent government equity is legally 
considered a private company. 
 
Because most businesses are located in the capital city, the 
Investment Code encourages the establishment of new businesses in 
other areas.  Incentives include income tax exemptions for 5-8 year 
periods, reduced-energy prices, and the installation of water 
supply, electric power and telecommunication lines to areas lacking 
water, energy and telecommunication facilities. 
 
Title V of the Investment Code relates to free trade zones.  Any 
company, domestic or foreign, that plans to export at least 80 
percent of its production is entitled to tax-free status. 
Production that is not exported would be subject to taxation.  Mali 
currently has no dedicated free trade zones. 
 
The National Assembly approved a new oil code in June 2004.  The 
code is based on incentive, stability and competition.  The initial 
span allowed for oil prospecting is four years renewable for two 
successive periods.  Prospecting and exploitation permits, as well 
as their renewal, are subject to the payment of fixed taxes ranging 
from one million to ten million CFA francs (approximately USD 1,900 
to 19,000).  In addition, permit holders are liable for the payment 
of charges on the production of hydrocarbons and a tax of 35 percent 
from the industrial and commercial profits.  Yet, they benefit from 
tax exemption on the petroleum and hardware-based products in 
compliance with the oil list set by the government of Mali.  A 
permit holder exploits the oil deposit and the government collects a 
charge varying between 7.5 and 15 percent, from a production of 
between 50,000 and over 500,000 barrels per day. 
 
On July 14, 2004, the government created an authority in charge of 
oil research promotion in Mali (AUREP).  This new agency has been 
tasked with drafting, planning and implementing oil research 
promotion programs, and collecting data on oilfields.  The agency is 
 
BAMAKO 00000068  004 OF 008 
 
 
also the interface with the government for private sector 
investors. 
 
The government has identified priority sectors for furthering 
economic development.  Special incentives are offered for investment 
in the following areas: 
 
--Agribusiness 
--Fishing and fish processing 
--Livestock and forestry 
--Mining and metallurgical industries 
--Water and energy production industries 
--Tourism and hotel industries 
--Communication 
--Housing development 
--Transportation 
--Human and animal health promotion enterprises 
--Vocational and technical training enterprises 
--Cultural promotion enterprises 
 
Job creation is an important criteria used in determining tax 
exemptions and other incentives.  Employers who hire young graduates 
can pay reduced rates of social security taxes. 
 
 
A.6.  Right to Private Ownership and Establishment: 
 
Domestic and foreign investors share equal rights to private 
ownership and establishment as long as they go through the approval 
process and abide by relevant regulations. 
 
The government allows the free market to determine prices.  Domestic 
and foreign companies compete on an equal basis with public 
enterprises.  The government's privatization program for state 
enterprises creates opportunities for both domestic and foreign 
private firms to acquire those entities through open international 
bidding.  In the past several years, the government has privatized 
parastatal enterprises including the cotton processing company, 
Huilerie Cotonniere du Mali (HUICOMA); Mali International Bank 
(BIM); and the telecommunications company, Societe des 
Telecommunications du Mali (SOTELMA).  The government is currently 
in the process of privatizing the cotton marketing parastatal, 
Compagnie malienne pour le developpement des textiles (CMDT) and the 
Malian Energy Company (EDM).  In some cases, the local media have 
questioned the transparency of the bidding and contracts award 
process. 
 
 
A.7.  Protection of Property Rights: 
 
Property rights are nominally protected in Mali.  The government 
created a new agency, Malian Center for the Promotion of Industrial 
Property, to replace the National Manufacturing Office through its 
Department for Intellectual Property Rights.  The Center is charged 
with implementing the legal system of protection, including the 
World Trade Organization (WTO) TRIPS agreement.  This agency is a 
member of the African Property Rights Organization (OAPI) and works 
with international agencies recognized by the United Nations 
Industrial Development Organization (UNIDO), which are concerned 
with these issues.  Patents, copyrights, and trademarks are covered. 
 
 
These structures notwithstanding, property rights are not always 
protected.  A recent example is that of a U.S. herbicide 
manufacturer, which has been mired in a three-year long legal battle 
in the Malian courts with a Chinese company allegedly selling the 
same products under a different brand name.  In spite of a recent 
favorable ruling by the Supreme Court, the case was remanded to a 
lower court and the outcome of the case remains unclear. 
 
 
A.8.  Transparency of the Regulatory System: 
 
As reflected in agreements with the IMF and World Bank, the 
government of Mali has adopted a transparent regulatory policy and 
effective laws to foster competition.  The commerce and labor codes 
adopted in 1992 are designed to meet the requirements of fair 
competition, to ease bureaucratic procedures, and to facilitate the 
hiring and firing of employees.  The Investment Code shortens the 
 
BAMAKO 00000068  005 OF 008 
 
 
application process to establish a business (maximum 30/45 days 
turnaround time), and it favors investments that promote 
handicrafts, exports, and labor-intensive businesses.  The Mining 
Code encourages investments in medium and small mining enterprises, 
awards two-year exploration permits free of charge, and does not 
require a commitment from the exploring firm to lease the area 
explored thereafter.  Mali is a member of the African Organization 
for the Harmonization of Business Practices (OHADA) and implements 
the SYSCOA accounting system which harmonizes business practices 
among several African countries consistent with international norms. 
 
 
 
A.9.  Efficient Capital Markets and Portfolio Investment: 
 
WAEMU statutes determine the banking system in Mali.  The WAEMU 
central bank, Banque Centrale des Etats de l'Afrique de l'Ouest 
(BCEAO), is located in Dakar, Senegal.  Commercial banks enjoy 
considerable liquidity.  They tend to prefer investing funds in 
western capital markets, thereby reducing credit available to local 
entrepreneurs.  The government and WAEMU have engaged in a 
restructuring of the banking system to increase the capital 
available to local investors.  The government's privatization 
efforts should make more credit available to the private sector. 
External financing and guarantee programs are alternatives to local 
bank credit. 
 
Portfolio investment is not a current practice, although the legal 
and accounting systems are now transparent enough and are similar to 
the French system.  In 1994 the government instituted a system of 
treasury bonds available for purchase by individuals or companies. 
The payment of dividends or the repurchase of the bonds may be done 
through a compensation procedure offsetting corporate income taxes 
or other sums due to the government. 
 
The WAEMU stock exchange program based in Abidjan opened a branch in 
each WAEMU country, including Mali.  To date, no Malian company is 
listed on the stock exchange.  The privatization programs of the 
electric company EDM and the state-owned telecommunications entity 
SOTELMA and cotton ginning company CMDT offer good prospects for 
some state-owned companies to be listed on the WAEMU stock 
exchange. 
 
The Bamako-based office of the Societe de Gestion et 
d'Intermediation (SGI) has conducted awareness campaigns to educate 
the business community.  Domestic companies are now looking into the 
possibility of applying to be on the list of stock exchange. 
 
The government of Mali has agreed to participate in the Sovereign 
Credit Rating Program sponsored by the State Department.  The U.S. 
Treasury Department provided technical assistance to the Malian 
Ministry of Economy in this endeavor with the support of the U.S. 
State Department.  The firm Fitch completed its rating and awarded a 
B- to Mali.  Parallel to this effort, Standard & Poor's awarded Mali 
B ratings in 2004 and 2005 through a UNDP-funded program. 
 
 
A.10.  Political Violence: 
 
Mali's multi-party democracy, now almost two decades old, has 
consistently encouraged private enterprise and investment. 
Occasional student and labor strikes and small-scale political 
demonstrations have sometimes resulted in political vandalism and 
violence, but not enough to substantially impact the investment 
climate.  President Amadou Toumani Tour was first elected in 2002. 
Observers considered the 2002 elections to be an important test for 
Malian democracy as the first democratically elected President, 
Alpha Oumar Konar, kept his word and turned power over to newly 
elected President Toure. 
 
President Tour was reelected in 2007 with more than 70 percent of 
the vote.  Several political parties contested the July 2007 
legislative elections, and the three major parties got more than 90 
percent of National Assembly seats.  The elections were considered 
free, fair, and transparent.  Municipal elections are scheduled for 
April 2009. 
 
Northern Mali has traditionally seen occasional friction between 
pastoral and sedentary populations.  Until May 2006, the Malian 
 
BAMAKO 00000068  006 OF 008 
 
 
government had effectively consolidated the peace following the 
1990-1995 rebellion in the northern regions.  The government, along 
with international donors and United Nations organizations, supports 
the socioeconomic reintegration of refugees and former combatants. 
After several years of relatively peaceful coexistence, Tuareg 
unrest in northern Mali restarted in May 2006.  In May 2006, a group 
of former Tuareg combatants previously reintegrated in the regular 
armed forces attacked two Malian military facilities in the northern 
towns of Menaka and Kidal.  In July 2006, the government of Mali and 
the rebels signed a peace agreement known as the Algiers Accords. 
In 2007, a dissident group of Tuareg rebels broke with this 
agreement by attacking Malian troops and taking several members of 
the Malian military hostage.   In 2008 Tuareg rebel groups conducted 
attacks in the regions of Kidal, Gao and the northern portions of 
the regions of Segou and Koulikoro. 
 
The Algeria based terrorist group, Al Q'aida in the Islamic Maghreb 
(AQIM), continues to use isolated regions of northern Mali as a safe 
haven.  Malians practice an open and tolerant form of Islam, and 
extremist ideologies like those espoused by AQIM have made few 
inroads into Malian society.  There is limited infrastructure and 
business in the northern desert regions, and past troubles in the 
north have had little direct impact on business activities in the 
rest of the country.  Mali maintains good relations with each of its 
several neighbors. 
 
 
A.11.  Corruption: 
 
Corruption is considered a crime punishable under the penal code. 
This notwithstanding, there are widely circulated reports of bribery 
cases on large contracts and investment projects. 
 
Corruption poses an obstacle to FDI.  Government officials often 
solicit bribes in order to complete otherwise routine procedures. 
Using assessments by the African Development Bank, the World Bank, 
and the World Economic Forum, Transparency International assigned 
Mali a score of 3,1 on a 10 to 0 scale, zero representing the lowest 
score. 
 
Corruption seems most pervasive in government procurement and 
dispute settlement.  Paying government procurement agents a five to 
ten percent commission is common practice.  To fight this, the 
government requires any procurement contract to be inspected by the 
"Direction Generale des Marchs Publiques" that has to determine 
whether the procedure meets the requirements of fairness, price 
competitiveness, and quality standards.  During his swearing in 
ceremonies in June 2002 and June 2007, and in subsequent meetings 
with the donor community, President Tour defined elimination of 
corruption as one of his highest priorities. 
 
The President created an Office of the Auditor General in 2004.  The 
Office of the Auditor General is an independent agency tasked by the 
President to audit any public funding-related operation.  After the 
President appointed the Auditor General, roughly one hundred support 
personnel, including experienced auditors, were hired.  In 2006, the 
Office of the Auditor General conducted a major investigation at the 
Niger Valley Authority (Office du Niger) where they found that more 
than USD 1 million was missing in just one department out of six. 
Subsequently, several regional directors were suspended and are 
awaiting trial.  Likewise, in 2007 and 2008, the Auditor General 
conducted investigations in several departments, including the Tax 
and Customs Offices of Department of Finance, several government-run 
hospitals, the gold mining sector, and the cotton marketing 
parastatal company CMDT.  Several officers and their private sector 
accomplices were accused of embezzlement and economic crimes.  None 
of these cases have yet proceeded to trial. According to the Auditor 
General's report published in July 2008, approximately CFA 21 
billion (USD 42 million) have been recovered of a total of CFA 31 
billion (USD 63 million) initially identified as missing in 2007. 
 
Questionable judgments in commercial cases have occasionally been 
successfully overturned at the court of appeals.  Yet there continue 
to be complaints from the domestic and foreign business community 
about the judiciary.  During a televised debate in March 2001, the 
mayor of Bamako harshly criticized the judiciary, and concluded by 
saying that: "everybody knows that magistrates are corrupted and one 
can literally purchase a trial when one is rich."  As a consequence 
of this public statement, the magistrate's union brought an action 
 
BAMAKO 00000068  007 OF 008 
 
 
for libel against the Mayor and the public television director who 
allowed the debate to be broadcast publicly.  The Mayor and the 
Director were convicted and sentenced to pay a symbolic 1 CFA franc. 
 They appealed this decision and eventually the case was settled out 
of court.  In 2002, the Bar Association President stated publicly 
that: "the judges are independent from everything but dirty money." 
In 1998, the executive decided to tackle the problem by creating a 
national commission in charge of reorganizing the judicial system. 
In February 1999, a national forum on the judiciary made 
recommendations as to ways of modernizing the judiciary.  In 
December 2001, the National Assembly passed amendments to the penal 
code criminalizing corruption.  In 2007, The Auditor General 
organized a discussion with Magistrates to find ways by which the 
Office of the Auditor General and the judiciary could work to bring 
"economic criminals" to trial. 
 
¶B.  Bilateral Investment Agreements 
 
Mali has signed the CIRDI treaty sponsored by the World Bank group. 
During the past six years, Mali has signed investment protection 
agreements with South Africa, Algeria, Senegal, and Libya. 
 
¶C.  OPIC and Other Investment Insurance Programs 
 
Since October 1997, Mali has been eligible for the U.S. Exim Bank 
program for short and medium term financing for the private sector. 
Mali is also eligible for certain OPIC programs.  Mali has been a 
member of the World Bank's Multilateral Investment Guarantee Agency 
(MIGA) since 1990. 
 
¶D.  Labor 
 
Labor is widely available, albeit at varying skill levels.  Many 
skilled workers have been laid off from state-owned companies and 
are unemployed or hold jobs well below their skill level.  Many 
recent college and high school graduates are job seekers. 
Unfortunately, skilled labor is insufficient in sectors with the 
highest growth rate such as mining and construction. 
 
Workers have the right to unionize.  Relations between labor and 
management have been difficult for the past four years, especially 
in new industry sectors such as gold mining.  Although a warning 
notice for strikes is not required in the private sector, mediation 
procedures are generally followed before resorting to a strike.  The 
government has signed the ILO agreement protecting the rights of 
workers.  Although the labor code adopted in 1992 improved hiring 
and firing procedures, it still requires simplification.  Powerful 
labor unions play an important role in national affairs. 
Compensation plan negotiations and firing procedures are very long 
and closely scrutinized by the judiciary.  Labor has constituted one 
of the major difficulties encountered recently by employers, both 
national and foreign.  Although not a requirement, it is advisable 
to have regular contacts with the labor inspectors, especially when 
concluding new hiring contracts or considering terminations or 
reductions in force. 
 
¶E.  Foreign Trade Zones/Free Ports 
 
There is no discrimination between foreign-owned firms and host 
country entities in terms of investment opportunities.  Companies 
(domestic or foreign) that export at least 80 percent of their 
production are entitled to the status of "zone franche" (tax-free 
status).  As such, they benefit from duty free-status on all 
equipment and other input they need for their operations.  To date, 
there are no dedicated free trade zones in Mali. 
 
¶F.  Foreign Direct Investment Statistics 
 
Companies from Japan, Australia, Canada, and South Africa have made 
significant investments in the mining sector.  France, Germany, and 
China have made significant investments in the manufacturing and 
food processing sectors.  Foreign direct investment in Mali in the 
manufacturing industry sector was estimated at USD 2.3 million in 
1994, USD 5 million in 1995, USD 8 million in 1996, and USD 15 
million in 1997.  Investment slowed in 1998, 1999 and 2000 because 
of legislative and municipal elections and the shortage of electric 
power and the high cost of energy in 2000.  Investment picked up 
again in 2001, mostly in relation to the African soccer championship 
that took place in Mali in February/March 2002.  In 2002/2003, more 
 
BAMAKO 00000068  008 OF 008 
 
 
investment was made, especially in the textile, housing and 
agro-business sectors.  In 2004, South African Investors and others 
pledged to invest about USD 100 million in agro-business. The 
investment was later postponed to FY 2006 and is likely to be 
implemented during the summer of 2009.  About USD 40 million more 
investment was placed into the economy during FY 2004.  Half of this 
was from a U.S. company in the railroad sector. In 2007, the 
company, faced with management problems and labor pressure, withdrew 
by selling its shares to a consortium composed of European and 
African investors with significant operational experience in Africa. 
 Foreign Direct Investment picked up during FY 2005 for a total 
estimated at more than USD 120 million and continued in FY 2006. 
Much of this can be attributed to advances in the gold mining sector 
and oil exploration by South African, Australian, Italian, 
Venezuelan and Chinese companies.  One American company signed an 
agreement with the government to do oil exploration in central and 
northern Mali.  Another American company has been exploring, 
together with South African investors, a large-scale sugar growing 
project in Mali; intensive efforts over the years had not yet 
brought the project to fruition. 
 
MILOVANOVIC