Mali's Fiscal Recovery and Mining Sector Stability: A Path to Creditworthiness Amid Resource-Driven Reforms

Mali's economic trajectory in 2025 is shaped by a delicate balance between fiscal consolidation and resource nationalism, with its sovereign creditworthiness hinging on the success of these dual strategies. Despite a non-investment grade rating of Caa2 from Moody's, the country's recent reforms and recovery of mining arrears offer a glimpse of potential for stabilization, though persistent political and operational risks remain.

Sovereign Creditworthiness: A Fragile Foundation

Mali's credit rating, last updated in December 2025, reflects a Caa2 rating with a Stable outlook, underscoring the agency's cautious optimism about the government's commitment to fiscal discipline. This rating, however, is tempered by ongoing challenges: political instability, delayed institutional reforms, and disruptions in key sectors like mining and agriculture. The fiscal deficit is projected to widen to 3.4% of GDP in 2025, driven by emergency spending to address flood damage. While this temporary loosening is supported by the IMF, the government has pledged to return to a deficit below the WAEMU ceiling of 3% by 2027.

A critical test of fiscal credibility lies in the management of domestic arrears. By the end of 2024, unpaid debts reached CFA363 billion (2.6% of GDP), with 80% owed to private businesses. These arrears strain small and medium enterprises and threaten the banking sector, which holds 25% of its assets in public loans. The government's promise to halt new arrears in 2025, under its IMF program, is a positive signal, but execution will determine whether this pledge translates into improved credit metrics.

Mining Reforms: Revenue Gains and Investor Tensions

Mali's 2023 mining code, a cornerstone of resource-driven reforms, has reshaped the sector's dynamics. By increasing state stakes in mining projects to 35% and raising royalties on gold exports from 6.5% to 10%, the government aims to maximize revenue and promote local economic participation. These measures have yielded immediate gains: a $1.2 billion recovery of arrears from mining companies by December 2025. Annual revenues from audited firms alone are projected to rise by 586 billion CFA francs, bolstering Mali's fiscal position.

However, the reforms have also sparked tensions. The suspension of operations at the Loulo-Gounkoto mine-owned by Barrick Gold-led to a 32% year-on-year drop in gold output by August 2025. Disputes over the 2023 code's elimination of stability clauses, which previously protected investors from policy shifts, have raised concerns about regulatory uncertainty. While the government argues these changes are necessary to address historical underperformance in revenue collection, foreign firms cite increased operational costs and reduced profitability.

The Path Forward: Balancing Reforms and Stability

Mali's ability to sustain fiscal recovery and mining sector stability will depend on two key factors: institutional credibility and investor confidence. On the fiscal front, the government must demonstrate that public financial management reforms-such as digitizing tax collection and enforcing anti-corruption frameworks-can reduce leakages and improve transparency. The IMF has emphasized that continued progress in these areas is critical to restoring fiscal credibility.

In the mining sector, the challenge lies in reconciling resource nationalism with investor expectations. While the 2023 code's local content requirements aim to boost domestic participation, they risk deterring foreign capital if enforcement becomes overly aggressive. The government's recent recovery of arrears and projected revenue gains suggest a capacity to balance these priorities, but the suspension of key mines highlights the fragility of this approach.

Conclusion: A High-Risk, High-Reward Proposition

Mali's 2025 fiscal and mining reforms present a mixed outlook for sovereign creditworthiness. The recovery of mining arrears and commitment to fiscal consolidation offer a potential pathway to improved credit metrics, but political instability, operational disruptions, and investor disputes remain significant headwinds. For investors, the country's resource wealth and strategic reforms are compelling, yet the risks of regulatory overreach and implementation challenges cannot be ignored. As the government navigates this complex landscape, its success-or failure-will serve as a litmus test for Africa's broader experiment with resource nationalism and fiscal discipline.