Low cotton prices blunt growth spike.

Position:MALI
 
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The IMF believes that Mali is becoming an increasingly attractive place to invest but despite its impressive fiscal performance, the government continues to struggle with the age old conundrum facing African states. How can economic growth be promoted when the cost of imports is rising and the value of exports is falling?

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The country has coped remarkably well with restricted access to the port of Abidjan as a result of unrest in Cote d'lvoire but rising oil prices have forced the government to curtail its spending. In common with most other net oil importing countries in sub-Saharan Africa, the current high cost of refined petroleum products has raised the price of all Malian imports.

While one of the twin pillars of the Malian economy, gold mining, is performing relatively well, low cotton prices will hit this year's growth figures. The gold and cotton sectors both contribute towards GDP and raise export revenues, but the cotton industry employs far more people, so any fall in prices or production can have devastating direct repercussions. Subsidies in the US and increased cultivation in Brazil, China, India and Pakistan have caused prices to fall by about 20% over the...

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