Mali

Building a Better Growth Foundation with a Focus on Education, Energy and Agriculture

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Overview
As Mali is one of the poorest countries in the world; IDA is supporting Mali in addressing its economic foundations in education, agriculture, and energy. Thanks to IDA and other donor support, Mali’s gross primary school enrollment rate is 76% in 2009 , from 60.9% in 2001, with significant improvement in school achievement. More than 650,000 people and 803 public institutions, including 172 schools and 139 health centers, have been connected to the electrical grid in rural areas. Through increased access to financing for farmers and other private operators in the agricultural sector, and the rehabilitation of 1101 km of rural roads, agricultural production in the supported areas has increased by 71% in 2009.

Challenge
Mali is a vast landlocked country with a relatively limited natural resource and human capital base, and a highly dispersed population. It is located in the heart of Sahel, a region threatened by drought and desertification. The vast majority of the people are directly dependent on their environment for their livelihoods through herding, farming or fishing. It is the largest of the Economic Community of West African States (ECOWAS) countries by land area, with a population of approximately 14 million.

Approach
Equitable access to quality education is at the center of IDA support to Mali. The education system has benefited from the favorable macroeconomic context, which has translated into increased resources. As a proportion of the total recurrent budget, education has climbed to almost 30% in 2008 from 23.7% in 2004. IDA has an ongoing investment lending operation to support the implementation of reforms in the Education Sector (closing end of December 2010).

The Household Energy and Universal Access Project ($70.65million) is designed to help Mali develop (i) a multi-layered approach to rural energy and (ii) a community-based woodland management to ensure sustainable wood fuel supply and fuel substitution initiatives. It will also create the “Agence Malienne pour le Développement de l’Energie Domestique et pour l’Electrification Rurale”. This specialized agency, with staff fully funded by the government, serves as the one-stop agency on household energy and rural electrification in the country. The project also contributed to set up a Rural Electrification Fund to finance start-up capital costs of rural electrification sub-projects. This new institutional and financial environment enabled local private operators to become the driving force of this project, by providing an average matching co-financing of 25 percent of rural electrification sub-projects.

Results
IDA is helping Mali increase access to basic energy services to help achieve economic growth and poverty reduction by:

Encouraging local private sector participation. About 80 sub-projects managed by 46 operators are financed by the project. As of May 2010, 43,311 off-grid connections in households and for public lighting have been made to provide electricity access to about 650,000 people. In addition, through the project, about 803 public institutions including 172 schools and 139 health centers have also been provided with access to off-grid electricity.

Empowering women. Women’s associations based on training received in basic accounting in local languages provided by NGOs financed through the project, are playing an important role in remote communities as energy services providers through a multifunctional platform, which is a diesel-run engine mounted on a chassis to which a variety of processing equipment can be attached, including cereal mill, husker, battery charger, and joinery and carpentry equipment. This equipment also contributes to reduce the time and efforts required to process food and therefore allow farmers—particularly women, to sell higher-value products and go to market more frequently. To date, multifunctional platforms have been installed in 64 rural communities, providing 7, 200 connections.

Introducing renewable energy technologies into Mali’s rural energy mix. Over a period of six years, more than 7,926 solar home systems and more than 500 solar photovoltaic systems were installed countrywide.

Promoting sustainable wood fuel management and fuel substitution. In order to contribute to a sustainable supply of wood fuel, predominantly used for cooking and heating, the project (in partnership with the National Directorate of Nature Conservation) has placed about 874,000 hectares under community management. NGOs and local private operators have disseminated about 748,500 improved wood and charcoal stoves and about 51, 385 Liquefied Petroleum Gas (LPG) stoves. The growing use of improved stoves is expected to help reduce indoor air pollution which is one of the main environmental health risk factors that women and children are exposed to. Indoor air pollution is associated with acute respiratory diseases, conjunctivitis, and low birth weight.

Toward the Future
Uncertainty as to the speed and strength of the global recovery remains high. While cautious optimism returned during the third quarter of 2009 with the resumption of growth (notably in the US), the speed of recovery varies, unemployment remains high and downside risks stemming from fiscal fragilities have come to the fore. Weak labor markets, particularly in Europe, could result in a continued decrease of remittances. A reversal in terms of trade could affect Mali’s macroeconomic outlook. A key concern is that room for policy maneuvers in many advanced economies has either been exhausted or become much more limited, given high debt levels and strained fiscal balance sheets. These uncertainties are compounded by Mali’s vulnerability to poor weather conditions and other natural disasters and the anticipated decline of Mali’s existing gold production.