Mali Growth and Diversification, Volume II – Annexes . March 14, 2018 . Macroeconomics, Trade and Investment (MTI) Global PracticeI Africa Region . . © 2017 The World Bank 1818 H Street NW, Washington DC 20433 1 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution—Please cite the work as follows: “World Bank. {YEAR OF PUBLICATION}. {TITLE}. © World Bank.” All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. 2 Contents Annexes – Chapter 1 ..................................................................................................................................... 5 A. Mali’s Export Diversification in a Historical Perspective....................................................................... 5 B. Mining Export Prices and Public Investment: Base Scenario for Mali .................................................. 7 Introduction .......................................................................................................................................... 7 Model and database ............................................................................................................................. 7 Base scenario ...................................................................................................................................... 11 Annexes -- Chapter 2. .................................................................................................................................. 14 A. The Mali 2016 Enterprise Surveys Data Set ........................................................................................ 14 B. Mali’s Doing Business Reforms (2010–2017)...................................................................................... 16 Annexes -- Chapter 3 ................................................................................................................................... 20 A. Data Sources ....................................................................................................................................... 20 B. Revealed Comparative Advantage ...................................................................................................... 20 C. List of Mali’s Exports with Revealed Comparative Advantage, 2015 ................................................. 20 D. Economic Complexity Index................................................................................................................ 22 Product space density ......................................................................................................................... 22 E. Definition of the Product Space of a Country ..................................................................................... 23 F. Japan’s Product Space, 2014 ............................................................................................................... 24 G. Export Diversification – Lessons Learned ........................................................................................... 24 H. Trade Logistics and Costs .................................................................................................................... 25 Annexes - Chapter 4 .................................................................................................................................... 40 A. Government Policies ........................................................................................................................... 40 B. Best Practice Country Cases................................................................................................................ 44 Ethiopia ............................................................................................................................................... 45 Tanzania .............................................................................................................................................. 49 Mozambique ....................................................................................................................................... 52 Côte d'Ivoire ........................................................................................................................................ 55 C. Detailed Policy Recommendations ..................................................................................................... 57 Upgrading Mali’s Sesame Value Chain ............................................................................................... 59 Institutional Development – Short Term ............................................................................................ 59 Create Platforms for Growth – Short to Medium Term ..................................................................... 60 Growers’ Capacity ............................................................................................................................... 60 Market Development – Quality Sesame Products and Sesame Processing ....................................... 61 3 Infrastructure Development – Short to Medium Term / Medium to Long Term ............................... 63 Upgrading Mali’s Cashew Value Chain ............................................................................................... 63 Institutional Development – Short Term ............................................................................................ 63 Create Platforms for Growth – Short to Medium Term ..................................................................... 64 Growers’ Capacity ............................................................................................................................... 64 Market Development – Quality Cashew Nuts (Raw and Processed) .................................................. 65 Infrastructure Development – Short to Medium Term / Medium to Long Term ............................... 67 List of Tables Table A1.1. Mali: Gross value-added by sector ............................................................................................ 5 Table A1.2. Macro SAM for Mali, 2015 (% of GDP)....................................................................................... 9 Table A4.1. Industrial policies in Mali ......................................................................................................... 40 Table A4.2. Key agricultural policies in Mali ............................................................................................... 41 Table A4.3. The Government of Mali sesame seed sector priorities .......................................................... 43 Table A4.4. Key country 2015 indicators .................................................................................................... 45 Table A4.5. Policy framework in Ethiopia ................................................................................................... 47 Table A4.6. Policy framework in Tanzania .................................................................................................. 50 List of Figures Figure A1.1. Mali: Sector structure in 2015 (%) ............................................................................................ 8 Figure A1.2. Base: Selected macro indicators (2015 bn CFAF) ................................................................... 12 Figure A1.3. Base: Domestic final demands (2015 bn CFAF) ...................................................................... 12 Figure A1.4. Real annual macro growth 2018–2025 (%) ............................................................................ 13 Figure A1.5. Base: Aggregated sector GDP (2015 bn CFAF) ........................................................................ 13 Figure A1.6. Real annual sector growth 2018–2025 (%)............................................................................. 13 Figure A4.1. Mali key policies timeline ....................................................................................................... 43 Figure A4.2. Production, area harvested, and yield.................................................................................... 46 Figure A4.3. Ethiopia’s production and unit price ...................................................................................... 46 Figure A4.4. Tanzania’s sesame seeds, area harvested, production, and yield.......................................... 49 Figure A4.5. Tanzania’s sesame oil production........................................................................................... 51 Figure A4.6. Tanzania's sesame seeds and oil exports value ...................................................................... 52 Figure A4.7. Mozambique’s cashew production ........................................................................................ 53 Figure A4.8. Cashew production in Mozambique ....................................................................................... 54 Figure A4.9. Côte d'Ivoire’s raw cashew nuts and processed cashews ...................................................... 55 Figure A4.10. Côte d'Ivoire’s raw cashew nuts production, area harvested. and yield ............................. 55 List of Boxes Box A4.1. Natio-Cajou ................................................................................................................................. 44 Box A4.2. Capacity building priorities of Ethiopian cooperatives ............................................................... 49 Box A4.3. Agribusiness innovation center enhancing capacity in oilseeds processing .............................. 51 Box A4.4. Startups in Côte d'Ivoire ............................................................................................................. 56 Box A4.5. CCA Industrializing the cashew nut sector ................................................................................. 56 4 Annexes – Chapter 1 A. Mali’s Export Diversification in a Historical Perspective 1. A review of Mali’s economy from a historical perspective offers further insights on the possibilities for structural change in the years ahead. A long a time series of the sector share of GDP provides interesting insights into the process of structural change in Mali. The ten key sectors discussed include agriculture (including hunting, fishing, and forestry); metalworking/foundry labelled “mining;” manufacturing (Textiles, Agri-food, and ‘Other”); public utilities (including electricity, gas and water); construction; commerce (including whole sale and retail trade, hotels and restaurants); transport (including storage and communication); finance (including insurance, real estate and business services); community, social and personal services; and government services. The analysis uses data from 1980 to 2015, though space limitations allow us to present in several places statistics for only 1990 – 2015. While we are unable to study within and between sector structural change, we use the limited employment data to examine labor productivity levels in 2013. Table A1.1. Mali: Gross value-added by sector GVA by Sector (Mil. of CFAC, const.1999 prices) GVA by Sector (% of total GVA) GVA by Sector (Annual Growth Rate) 1990 2000 2010 2015 1990 2000 2010 2015 1990 2000 2010 2015 1990-2015 Agriculture 529,290 661,234 1,138,706 1,369,010 38.3% 34.3% 33.6% 34.0% -7.9% -10.7% 9.2% 7.3% 3.7% Mining 16,219 74,384 149,230 131,439 1.2% 3.9% 4.4% 3.3% 49.9% 1.1% -18.3% 2.1% 15.3% Manufacturing 139,557 231,722 365,898 432,206 10.1% 12.0% 10.8% 10.7% -2.3% 27.3% -4.7% -5.4% 5.5% Public utilities 19,482 29,581 72,635 115,252 1.4% 1.5% 2.1% 2.9% 5.7% -0.3% 20.8% 7.5% 7.7% Construction 72,212 144,160 289,652 221,094 5.2% 7.5% 8.5% 5.5% -1.3% 27.7% 4.1% 6.0% 5.0% Trade, Hotels & rest. 208,174 257,659 480,835 575,401 15.1% 13.4% 14.2% 14.3% -1.2% -1.5% 12.7% 5.0% 4.1% Transp./Stor/Comm. 86,871 120,166 299,882 499,292 6.3% 6.2% 8.8% 12.4% -1.6% -17.0% 19.1% 10.2% 7.2% Finance&Business Svc. 84,351 97,252 213,564 245,098 6.1% 5.1% 6.3% 6.1% -0.7% -8.6% 8.2% 4.4% 4.3% Government Svc. 144,138 190,060 264,081 290,425 10.4% 9.9% 7.8% 7.2% -4.8% 15.6% 4.0% 10.0% 2.7% Comm/Social/ Personal services 82,753 119,323 114,640 142,620 6.0% 6.2% 3.4% 3.5% -0.1% 5.1% 12.8% 6.6% 2.4% GDP at factor cost 1,383,048 1,925,541 3,389,122 4,021,838 100.0% 100.0% 100.0% 100.0% -3.8% -0.2% 6.6% 5.6% 4.1% Source: Government of Mali, 2017. 2. Between 1990 and 2015, the Malian economy grew at only 4 percent per annum. The fastest growing sectors were Mining, Public Utilities and Transport and Communications (Table A1.1). The latter grew at over 7 percent per annum, and its share in GDP doubled from 6.3 percent to over 12 percent. Despite rapid growth in Public Utilities (power, water), and Transport and Communications which are key inputs for Manufacturing, growth in industrialization did not pick up. • Between 1990 and 2015, growth in Manufacturing was only 5.5 percent, and pales in comparison to the growth rates which facilitated structural transformation in East Asia. The share of manufacturing in Mali’s GDP averaged about 10% per annum. Mali did not industrialize during this period. • Construction is usually the fastest growing sector in most developing countries but it grew at only 5 percent per annum in Mali. Other backbone services – Financial, Real Estate, Insurance and business services (ICT) – also ingredients of the set of a dynamic manufacturing sector, had lackluster growth. • Raid growth in Wholesale and Retail Trade generally drives services’ sector growth in most low-income countries. In contrast, growth in Mali’s Wholesale and Retail Trade sector was weak and consistent with anemic growth in the overall Malian economy. 5 3. The literature on export diversification is extensive and indicates that there is no unique diversification strategy for a country. Broadly, diversification is conceived as the process of structural transformation that enables a country to move from producing low value-added goods and services to higher value-added goods and services (Kuznets 1964). A country can achieve this by producing a larger variety of goods and services, and by improving the quality of the goods and services it produces in ways that raise the incomes of its citizens [IMF 2014, Lederman and Maloney 2012]. In low-income countries like Mali, structural transformation ensues in two ways. First, when the labor force has shifted out of low productivity activities such as subsistence agriculture or the informal sector into more productive sectors such as high value agriculture, manufacturing, services and trade. Second, when the emergence of new sectors that are not resource- or commodity-based has diminished the overwhelming dominance of natural resource-based sectors like mining, or commodity-dependent sectors like cotton in the economy. As export concentration has a direct and negative effect on per capita incomes, the negative spillovers of commodity price shocks on macroeconomic stability provides a rationale for policymakers to implement export diversification policies (Hesse 2008, Harrison and Rodriguez Clare 2010). 4. Successful natural resource-dependent countries have achieved higher standards of living by diversifying their concentrated production and export baskets into higher value-added products and services with relatively stable prices. Two observations are noteworthy. One, natural resources in themselves are not detrimental to prosperity. What matters for prosperity is what a country does with them. If it invests natural resource-revenues efficiently, it can use the earnings to develop human capital and/or infrastructure which facilitate diversification in more productive products and services, and help to raise income levels. Second, typically, overt dependence on natural resource-based exports increases the vulnerability of the economy to global export price shocks, exacerbates income volatility, and leads to unsustainable growth. Mali’s over-dependence on gold and cotton price exports poses a high downside risk to its recent economic growth. Over a long period, volatile income flows do not support sustainable growth and higher standards of living (Figure 1.2). As an example, Malaysia, Mexico and to some extent, South Africa, reduced their natural resource-dependence by diversifying their exports and economies to become more prosperous. In contrast, Burkina Faso which is also a gold and cotton exporter, or Ghana which is a metals, minerals and cocoa exporter, or Tanzania and Ethiopia which are coffee and gold exporters, have been slow in diversifying their exports. Chile, an example of a diversified economy, exports more than 2,800 products to more than 120 countries. In contrast, Zambia, a country similarly endowed with copper resources, exports just over 700 products and to just 80 countries. Oil-exporting Nigeria exports just about 780 products (Fruman, 2017). 5. Looking ahead, the presence of agricultural value chains indicates untapped potential for scaling industrialization and achieving Mali 2025. The obvious launching pad for industrialization in Mali is to leverage its main manufacturing industries - textiles, agri-food and metalworking. Agri-foods and textiles account for about 70 percent of the manufacturing output, though only about 7 percent of Mali’s GDP. While neither agri-foods nor textiles have contributed to enhancing industrialization after the 1990s, both industries have a natural comparative advantage as potential drivers of Mali 2025. They are hooked to Mali’s leading sectors – cotton and agriculture – which have potentially long value chains. Mali also has abundant less-skilled labor which is a necessary input for the Textiles and Agrofood industries. In recent years, evidence from Ethiopia and a few other SSA countries is lending credence to the hypothesis that if the investment climate is conducive, the abundance of natural resources and the low labor costs in Africa can attract light manufacturing industries to relocate from Asian countries where labor costs are rapidly rising (Hinh et al, 2012). In sum, the key inputs for industrialization - natural raw materials and a large pool of less-skilled labor – are readily available in Mali. and can play a determinant role in the supply of raw materials in a number of industries. 6 B. Mining Export Prices and Public Investment: Base Scenario for Mali Introduction1 6. Mali, a low-income country in the Sahel region, faces severe development challenges. Living standards are low, production and exports are concentrated to a few sectors, including the agriculture sector, which is jeopardized by climate change. Furthermore, the country is still suffering from the repercussions of a severe political and security crisis in 2012. Given this, it is important to try to identify economic policies and external conditions that could help put Mali on a path toward stronger economic performance. To this end, this note explores the consequences of alternative scenarios for public investment and export prices on Mali’s economy during the period 2018-2025. Analytically, the paper applies MAMS, a World Bank Computable General Equilibrium (CGE) model.2 A new database with 2015 as base year was constructed for the analysis; most importantly a social accounting matrix (SAM) was estimated, drawing on scattered data and applying judgement when data from different sources were incomplete or inconsistent. Section 2 provides brief overviews of the model and database while Section 3 presents the scenarios and analyzes the results. Section 4 offers conclusions. Appendices A and B contain more detailed presentations of the model and database, respectively. Appendix C shows additional simulation results. Model and database 7. MAMS is a CGE model designed for country-level analysis of medium- and long-run development policies. It is a multi-purpose model that, among other issues, may address the consequences of world price shocks and public investment. Technically, the model is made up of a set of simultaneous linear and non- linear equations. It is economy-wide, providing a comprehensive and consistent view of the economy, including linkages between production and the income it generates, households, the government (its budget and fiscal policies), and the balance of payments. In each period, the different agents (producers, household, government, and the nation in its dealings with the outside world) are subject to budget constraints: receipts and spending are fully accounted for and by construction equal (as they are in the real world). The decision rules of each agent – for producers and households, the objective is to maximize profits and utility, respectively – respect these budget constraints: for example, households set aside parts of their incomes to direct taxes and savings, allocating what is left to consumption with a utility-maximizing composition. For the nation, the real exchange rate or foreign financing adjusts to ensure that its external accounts are in balance. Wages, rents and prices play a crucial role by clearing markets for factors and commodities (goods and services). For commodities that are traded internationally (exported and/or imported), domestic prices are influenced by international price developments, typically (as in the case of Mali) assuming that international markets will demand and supply the exports and imports of the country at given world prices (the small-country assumption). 8. Over time, production growth is determined by growth in factor employment and changes in total factor productivity (TFP). Growth in capital stocks is endogenous, depending on investment and depreciation. For other factors, the growth in employable stocks is exogenous. For labor (disaggregated by educational attainment) and natural resources (with sector-specific factors for mining, fishing, and forestry), stock growth rates are exogenous, reflecting projections based on available data. For labor, the 1 For inputs and support to this work, the author thanks José Lopez Calix and Dinar. We are indebted to the Knowledge for Change Program (KCP) Trust Fund for funding the basic development of MAMS. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. 2 For more on MAMS, see Lofgren et al. (2013) and http://www.worldbank.org/en/research/brief/MAMS. 7 projections reflect the evolution of the population in labor-force age, labor force participation rates, and the impact of expanded education. The labor unemployment rate is endogenous, leading to a distinction between stock (or labor force) and employment levels. TFP growth is made up of two components, one that responds positively to growth in government capital stocks and one that, unless otherwise noted, is exogenous. Figure A1.1. Mali: Sector structure in 2015 (%) 100 90 80 Value added 70 Production 60 Employment 50 40 Exports 30 Imports 20 Export/output ratio 10 Import/demand ratio 0 Agriculture Mining Other Private Gov't industry services services 9. For this work, a MAMS database for Mali with 2015 as base year was developed. The database consists of a Social Accounting Matrix (SAM) and complementary data, most importantly data on factor stocks, elasticities (in trade, production and consumption), and projections for GDP and other indicators; for more information, see Appendix B. To provide context for the analysis, key aspects of Mali’s economy relevant to the simulation analysis are presented in Figure A1.1 and Table A1.2, which both are based on the model database for 2015. Figure A1.1 provides a summary picture of Mali’s economic structure, using a five-sector disaggregation.3 It shows that agriculture and private services dominate the economy in terms of value-added, production, and employment. Agriculture is by a wide margin the largest employer, accounting for almost 80 percent of employment; compared to other sectors, its weight is smaller for production than value added due to relatively little spending on intermediates. Among exports, mining dominates whereas the bulk of imports are various industrial goods. Mining is also the sector that allocates the largest output share to exports. Across different sectors, the country is most dependent on imports for non-mining industrial goods. Agriculture stands out as the sector that has the least direct links to the rest of the world (only a small share of output is exported and imports meet a relatively small share of domestic demands). The fact that it combines a very high employment share with a much more modest share of value-added reflects the role of agriculture as a labor-absorbing, low-productivity sector. 3The macro SAM in Table A1.2 is an aggregation of the model SAM. As noted in Appendix B, it has 13 sectors. To make the presentation more easily digestible and abstract from unnecessary details, tables and figures in the paper use this six-sector disaggregation. 8 Table A1.2. Macro SAM for Mali, 2015 (% of GDP) 9 10. Table A1.2 shows a Macro SAM for 2015 with percent of GDP at market prices as the unit. 4 The matrix offers an aggregate and consistent perspective on Mali’s economy in 2015, including the linkages between its different parts. To grasp the structure of the economy, it may be helpful to review the items that enter the definition of GDP and the budgets of the aggregate institutions -- the government, the household (the domestic non-government) and the rest of the world (representing the balance of payments). It should be kept in mind that all items are expressed as percent of GDP at market prices and that, therefore, by definition, GDP at market prices is 100. 11. The items that make up absorption (domestic final demands) appear in the commodity row: household and government consumption (91.2 and 8.2, respectively), private and government investment as well as stock changes (9.6, 7.5 and 0.7, respectively. Accordingly, total absorption amounts to 117.3. This is possible thanks to a trade deficit at 17.3: imports and exports amount to 39.9 and 22.6, respectively (see the payments between the row and com accounts). GDP at factor cost is at 90 of GDP (payments to fac from act), indicating that net indirect taxes is 10 (the difference between indirect taxes, which sum to 10.5, and subsidies at 0.5). In the column of the factor account, factor incomes are split between the domestic households (who receive the bulk, 87.0), with smaller payments to the rest of the world (2.5), and as direct taxes (0.6). 12. Among the institutions, the government is represented by its current and capital accounts (gov and cap-gov). Current receipts (the row of the gov account) amount to 19.6, the bulk of which is taxes (14.9) but also includes domestic and foreign transfers, the latter (equivalent to foreign grant aid) are at 2.8. As shown in the gov column, these earnings are used for consumption (8.2), domestic transfers (4.7), subsidies (0.5), and savings (6.2). Apart from savings, the inflows to the government capital accounts are foreign financing (1.6) adjusted for negative domestic borrowing (0.3). The net of these payments is allocated to government investment (7.5). 13. The current incomes of the domestic non-government institution (on the row hhd) amount to 101.5 and are mostly factor incomes (87.0), complemented by transfers form the government and the rest of the world (4.7 and 9.8; the latter include worker remittances). They are used for consumption (91.2), transfers to the government (2.0), direct taxes (3.8) and savings (4.5; see the column hhd). In the capital account of the household (the row of cap-hhd), these savings are complemented by financing from the rest of the world (3.5). The amount that is available for domestic private investment financing (8.7 for capital formation and 0.7 for inventory change) is augmented by negative lending to the government (0.3) and a decline in the net foreign assets of the financial system (1.2). 14. Finally, the balance of payments is represented by the accounts row and cap-row. Mali’s current account (the sum of the balances for trade, transfers, and factor incomes) has a deficit of 7.2 (here depicted as foreign savings). In the capital account of the rest of the world ( cap-row), the increase in net foreign assets of the financial system (1.2) reduces the funding that is available to domestic institutions and investment to 6.0. The latter value is split between foreign investment, and financing of the government and the private sector (0.9, 1.6, and 3.5, respectively). 15. In sum, from an aggregate perspective Mali’s economy is quite similar to many other low- and middle-income countries. A large trade deficit is made possible by transfers to the household and the 4A SAM is a square matrix with the same column and row accounts; the cell entries represent payments from the column account. In the absence of errors, column and row totals are equal. In this SAM, GDP at market prices is 100, as it should, given the unit choice. It may be defined as the sum of the payments to “fac” from “act” (93.0 percent, representing GDP at factor cost) and to the government from the indirect tax accounts (7.0 percent). Alternatively, it may be computed as the sum of exports, household and government consumption, and the investment entries (all on the row of the “com” account) minus imports (in the column of the “com” account). 10 government as well as foreign financing of a current account deficit, made up of foreign investment and lending to domestic government and the private sector. The size of government spending (at close to 21 percent of GDP) is also quite similar to that of other countries, including a tax intake of near 15 percent of GDP. Base scenario 16. The simulations require a base scenario. Given our forward-looking policy perspective, our analysis treats 2017 as the base year.5 17. The base scenario is designed to provide a central, business-as-usual case for the evolution of Mali’s economy up to 2025 without major changes in economic policy; it serves as a benchmark to which the results for non-base scenarios are compared. To assure such an outcome, it is assumed that the shares in nominal absorption (total consumption and investment spending) are unchanged over time for most payments in the economy: government consumption, government investment, private investment (domestic and foreign), foreign and domestic financing (borrowing net of interest) for the government the private sectors, and various transfer payments involving the government or the rest of the world. The net foreign assets of the domestic financial sector are set to grow at roughly the same rate as GDP. 18. The overall expansion of the economy is driven by growth in GDP at factor cost, which is exogenous; drawing on World Bank and IMF projections, the average annual growth rate for the period 2018-2025 is 4.7 percent (World Bank 2017b, p. 243; IMF 2016, p. 18).6 With regard to Mali’s mining exports (primarily gold), drawing on World Bank projections for prices in constant US dollars, a decline at an average annual rate of 3.4 percent is imposed for the same period; this translates into a total price fall of around 24 percent (World Bank 2017a, p. 22). Extrapolating on IMF projections, the mining sector is assumed to contract at a moderate rate, in part due to the influence of the export price decline. Given these assumptions, only moderate adjustments are needed to maintain macroeconomic balance. In the government budget, this is achieved by scaling domestic tax rates, which increase by roughly 8 percent compared to the 2015 rates (i.e., if a tax rate in 2015 were at 10.0 percent, it would increase to 10.8 percent); trade tax rates are not changed. A similarly minor increase in household savings rates was needed to generate enough savings to finance domestic private investment with an unchanged absorption share. (Foreign investment is self-financed from abroad while government investment is financed as part of the budget.) However, due to the decline in mining export prices and the slow growth in the mining sector, a depreciation of the real exchange rate at an annual rate of 1.5 percent (achieved via changes in the domestic price level) was needed to maintain external balance. 19. The results for the base scenario are summarized in Figures A1.2–A1.6. During the period 2018- 2025, the economy grows along a smooth path. Thanks to a large trade deficit, absorption is well above GDP (Figure A1.2). Among the components of domestic final demands (absorption), private (household) consumption is the largest by a wide margin, followed by private investment as a distant second (Figure A1.3). Average annual growth rates for most macro aggregates are around 4-5 percent (Figure A1.4). Due 5 In the background, the first simulation year is 2015, which replicated the 2015 database. GDP growth in 2016 and 2017 reflects 6 As will be noted below, for the non-base scenarios GDP growth is, on the contrary, endogenous. With regard to the base, technically, the level of GDP is exogenized by removing one variable (GDP at factor cost) from the model for each solution year. At the same time, in each year, a TFP scaling variable is endogenized, scaling TFP in all or selected production activities so that the exogenous GDP level is generated. Given that one variable is added and one removed, the model continues to have an equal number of equations and variables. For all non-base scenarios, the GDP level is flexible whereas the TFP adjustment variable is fixed at the levels generated under the base scenario. The point in italics is important: this means that the results for the non-base scenarios are no different if the only change is a switch from exogenous to endogenous GDP. However, given that other shocks are introduced, the GDP level (and other results) will deviate from the base. 11 to the terms-of-trade loss and the balance-of-payments constraints, real exports grow more rapidly than GDP and imports more slowly, generating absorption growth that, at 4.2 percent, falls short of GDP growth. The growth rate the major component of absorption, private consumption, is also at 4.2 percent. The slightly slower growth for investment compared to other aggregates, most clearly for public consumption, reflects a mix of unchanged spending shares (out of absorption) and unfavorable price changes for capital goods. 20. Among the aggregate sectors (Figure A1.5), agriculture has by far the highest GDP, followed by private services. In terms of growth rates (Figure A1.6), except for mining, which declines at an annual rate of 0.8 percent, the other sectors grow at fairly uniform rates that are slightly above the aggregate GDP growth rate, slightly more so for the more tradable agriculture and industry sectors since they are incentivized by the depreciation of the real exchange rate. Figure A1.2. Base: Selected macro indicators (2015 bn CFAF) Figure 3.1.1. Base: Selected macro indicators (2015 bn CFAF) 18,000 15,000 12,000 Absorption 9,000 Imports 6,000 GDP at factor cost Exports 3,000 0 Figure Figure A1.3. 3.1.2. Domestic final Base:Domestic Base: finaldemands demands(2015 bnbn CFAF) (2015 CFAF) 16,000 1600 14,000 1400 Private consumption Other final demands 12,000 1200 Private consumption Public consumption 10,000 1000 Private investment 8,000 800 Public investment 6,000 600 12 Figure 3.1.3. Figure Real A1.4. annual Real macro annual macro growth growth 2018-2025 2018 –2025 (%) (%) 0 1 2 3 4 5 6 7 Absorption Private consumption Public consumption Private investment Public investment Exports Imports GDP at factor cost Figure 3.1.4. Base: Aggregated sector GDP (2015 Figure A1.5. Base: Aggregated bn CFAF)sector GDP (2015 bn CFAF) 6,000 1,100 Agriculture and Private Services 5,500 1,000 5,000 900 Other sectors 4,500 Agriculture 800 4,000 Private Services 700 3,500 Mining 600 3,000 Industry 2,500 500 2,000 400 Figure 3.1.5. Figure Real A1.6. annual Real annual sector growth sector growth 2018-2025 –2025 (%) (%) 2018 -2 -1 0 1 2 3 4 5 6 Agriculture Mining Industry Private Services Public Services 13 Annexes -- Chapter 2. A. The Mali 2016 Enterprise Surveys Data Set 1. Introduction. This annex provides additional information on the data collected in Mali between July 2016 and October 2016. The objective of the Enterprise Survey is to gain an understanding of what firms experience in the private sector. As part of its strategic goal of building a climate for investment, job creation, and sustainable growth, the World Bank has promoted improving the business environment as a key strategy for development, which has led to a systematic effort in collecting enterprise data across countries. The Enterprise Surveys (ES) are an ongoing World Bank project in collecting both objective data based on firms’ experiences and enterprises’ perception of the environment in which they operate. The ES currently cover over 155,000 firms in 148 countries, of which 139 have been surveyed following the standard methodology. This allows for better comparisons across countries and across time. Data are used to create statistically significant business environment indicators that are comparable across countries. The ES are also used to build a panel of enterprise data that will make it possible to track changes in the business environment over time and allow, for example, impact assessments of reforms. This report outlines and describes the sampling design of the data, the data set structure as well as additional information that may be useful when using the data, such as information on non-response cases and the appropriate use of the weights. 2. Sampling Structure. The sample for 2016 Mali ES was selected using stratified random sampling, following the methodology explained in the ES Sampling Note.7 Stratified random sampling8 was preferred over simple random sampling for several reasons:9 To obtain unbiased estimates for different subdivisions of the population with some known level of precision; ii) To obtain unbiased estimates for the whole population. The whole population, or universe of the study, is the non-agricultural economy. It comprises: all manufacturing sectors according to the group classification of ISIC Revision 3.1: (group D), construction sector (group F), services sector (groups G and H), and transport, storage, and communications sector (group I). Note that this definition excludes the following sectors: financial intermediation (group J), real estate and renting activities (group K, except subsector 72, IT, which was added to the population under study), and all public or utilities sectors; iii) To make sure that the final total sample includes establishments from all different sectors and that it is not concentrated in one or two of industries/sizes/regions. d. To exploit the benefits of stratified sampling where population estimates, in most cases, will be more precise than using a simple random sampling method (i.e., lower standard errors, other things being equal.) e. Stratification may produce a smaller bound on the error of estimation than would be produced by a simple random sample of the same size. This result is particularly true if measurements within strata are homogeneous. f. The cost per observation in the survey may be reduced by stratification of the population elements into convenient groupings. 3. Three levels of stratification were used in this country: industry, establishment size, and region. The original sample design with specific information of the industries and regions chosen is described in next Table A2.1. Industry stratification was designed in the way that follows: the universe was stratified into manufacturing (ISIC Rev. 3.1 codes 15 - 37), and Services (ISIC codes 45, 50-52, 55, 60-64, and 72) industries which were further broken down into exporting and non-exporting firms. For the Mali ES, size 7 The complete text can be found at http://www.enterprisesurveys.org/~/media/GIAWB/EnterpriseSurveys/Documents/Methodology/Sampling _Note.pdf 8 A stratified random sample is one obtained by separating the population elements into non-overlapping groups, called strata, and then selecting a simple random sample from each stratum. (Richard L. Scheaffer; Mendenhall, W.; Lyman, R., “Elementary Survey Sampling”, Fifth Edition). 9 Cochran, W., 1977, pp. 89; Lohr, Sharon, 1999, pp. 95 14 stratification was defined as follows: small (5 to 19 employees), medium (20 to 99 employees), and large (100 or more employees). Regional stratification was done across two regions: Bamako and Mopti, Ségou and Sikasso. 4. Sampling implementation. Given the stratified design, sample frames containing a complete and updated list of establishments as well as information on all stratification variables (number of employees, industry, and region) are required to draw the sample. Great efforts were made to obtain the best source for these listings. TNS Opinion was the main contractor and TNS Senegal was the subcontractor that implemented the Mali 2016 ES. The sample frame consisted of listings of firms from two sources: For panel firms the list of 360 firms from the Mali 2010 ES was used and for fresh firms (i.e., firms not covered in 2010) firm data from Mali Institut de la Statistique (INSTAT) published in 2010, was used. Necessary measures were taken to ensure the quality of the frame; however, the sample frame was not immune to the typical problems found in establishment surveys: positive rates of non-eligibility, repetition, non- existent units, etc. Given the impact that non-eligible units included in the sample universe may have on the results, adjustments may be needed when computing the appropriate weights for individual observations. The percentage of confirmed non-eligible units as a proportion of the total number of sampled establishments contacted for the survey was 8.8% (30 out of 342 establishments).10 Breaking down by industry and size, the following sample targets were achieved (based on the sampling information). enterprise Table A2.1. Mall Annex survey sample structure—firms included in exporter module Table: Mali Enterprise Survey Sample Structure - Firms Included in Exporter Modume (38 firms with 38 firms withany sales any sales fromfrom direct exports) direct exports Firm Size % Firms (#) Firm Location - Governorate % Firms (#) Small <=19 44.7 17 Bamako 89.5 34 Medium >=20 and <=99 31.6 12 Mopti, Segou, Sikasso 10.5 4 Large >=100 23.7 9 Total # of Firm responses: 38 Total # of Firm responses: 38 Sector % Firms (#) Ownership structure % Firms (#) Food 18.4 7 Private domestic 50.0 n/a Services of motor vehicles 10.5 4 Private foreign 42.8 n/a Wholesale services 13.2 5 Government/state 1.6 n/a Chemicals 10.5 4 Other types of ownership 5.7 n/a Textiles 7.9 3 Total # of Firm responses: 36 Plastics and rubber 7.9 3 Ownership structure % Firms (#) Garments 5.3 2 Foreign Owned >50% 78.4 40 Basic metals 5.3 2 Foreign Owned >30% 50.0 19 Transport 5.3 2 Domestic or other varies based on figures above Leather 2.6 1 Total # of Firm responses: 38 Publishing, printing, and recorded media 2.6 1 Corperate Form % Firms (#) Refined petroleum products 2.6 1 Shareholding company with traded-shares 23.7 9 Machinery and equipment 2.6 1 Shareholding company with non-traded shares 31.6 12 Furniture 2.6 1 Sole proprietorship 29.0 11 Construction services 2.6 1 Partnership 15.8 6 Total # of Firm responses: 38 Total # of Firm responses: 38 Age of Firm % Firms (#) Sector % Firms (#) < 5 years 5.4 2 Manufacturing 68.4 26 Greater than or equal to 5 and less than 15 years 37.8 14 Services 31.6 12 Greater than or equal to 15 and less than 25 years 40.5 15 Total # of Firm responses: 38 Greater than or equal to 25 and less than 35 years 5.4 2 Female owners of the firm? % Firms (#) Greater than or equal to 35 and less than 45 years n.a. n.a. Yes 26.3 10 Greater than or equal to 45 years 10.8 4 No 73.7 28 Total # of Firm responses: 37 Total # of Firm responses: 38 10 Based on out of target and ineligible contacts 15 B. Mali’s Doing Business Reforms (2010–2017) Trading Protecting Paying Starting a Resolving Construction Registering Enforcing Getting credit across minority taxes business insolvency Permits property contracts borders investors 2017 reducing the establishing a introducing a reduced the paid-in new credit new conciliation time for minimum bureau procedure for documentary capital companies in compliance requirement financial for both difficulties and a exporting and simplified importing by preventive introducing settlement an electronic procedure for data small interchange companies. system. 2016 introducing reduced the regulations time for that govern documentary the licensing compliance and for both functioning of exporting and credit bureaus importing by in the member introducing states of the an electronic West African data Economic and interchange Monetary system. Union (UEMOA). 2015 reducing the introducing time needed greater to obtain a requirements geotechnical for disclosure study of related- party transactions 16 Trading Protecting Paying Starting a Resolving Construction Registering Enforcing Getting credit across minority taxes business insolvency Permits property contracts borders investors to the board of directors and by making it possible for shareholders to inspect the documents pertaining to related-party transactions and to appoint auditors to conduct an inspection of such transactions. 2013 reducing the corporate income tax rate though it also introduced a new tax on land. At the same time, Mali simplified the processes of paying taxes by 17 Trading Protecting Paying Starting a Resolving Construction Registering Enforcing Getting credit across minority taxes business insolvency Permits property contracts borders investors introducing a single form for joint filing and payment of several taxes. 2012 Services amendments added to the to the OHADA one-stop Uniform Act on shop Secured Transactions expanding the range of assets to be used as collateral, extend security interest to the proceeds of the original asset, introduce out- of-court enforcement. 2011 eliminated eased eased redundant construction property inspections of permit with a transfers imported simplified by goods, environmental reducing reducing the impact the time for assessment property trading across for transfer borders. noncomplex tax for firms from 18 Trading Protecting Paying Starting a Resolving Construction Registering Enforcing Getting credit across minority taxes business insolvency Permits property contracts borders investors commercial 15% of the buildings. property value to 7%. 2010 Creation of a reduced time speeding up strengthened improved one-stop required for the process investor contract shop trading across for obtaining a protections enforcement including all borders with water with an process registration electronic connection amended through procedures, data civil amended civil applied interchange procedure procedure online system, code code publication improved increasing introducing and terminals shareholders’ case time obtention of used by access to limits, a national Malian corporate summons to identification traders and information be served, and number. less during trial. no documents intervention required by the judge. 19 Annexes -- Chapter 3 A. Data Sources 1. The analysis in this report is based on HS 1992 6-digit data from the BACI International Trade Database (BACI-Base Pour L’analyse Du Commerce International) spanning 1995-2015. BACI is the World trade database developed by CEPII using United Nations Statistical Division COMTRADE high level product disaggregation. Updates conducted by BACI ensures more accurate reporting of bilateral trade flows, by applying procedures such as reconciling exports with the corresponding imports. 2. Services are added to our analysis using the COMTRADE and UNCTAD database and are available up until 2013. B. Revealed Comparative Advantage 3. The index for country c commodity i is calculated as follows: (, ) ⁄ ∑ (, ) (, ) = ∑ (, ) ⁄ ∑, (, ) where x(c,i) is the value of the exports of country c in the i’th good. The index of revealed comparative advantage (RCAic) has a relatively simple interpretation. If it takes a value greater than unity, the country has a revealed comparative advantage in that product. Conversely, when RCA(c,i)<1 that country is not a competitive exporter of that product (Balassa, 1965). C. List of Mali’s Exports with Revealed Comparative Advantage, 2015 Product Export Export Product description RCA code value share 410619 Goat or kid skin leather, (excl. further prepar 5,600,000 0.58% 591.84 410519 Sheep or lamb skin leather, (excl. further prep 7,700,000 0.79% 395.00 120740 Sesamum seeds 70,000,000 7.20% 378.95 520100 Cotton, not carded or combed 200,000,000 20% 277.78 130190 Natural gums, resins, gum-resins and balsams 3,600,000 0.37% 123.33 (e 130120 Natural Gum Arabic 2,000,000 0.21% 91.30 310520 Mineral or chemical fertilizers with nitrogen, 36,000,000 3.70% 86.05 80450 Guavas, mangoes and mangosteens, fresh or 12,000,000 1.20% 85.71 dried 410229 Skins of sheep or lambs, without wool, not 128,722 0.01% 48.15 pick 152190 Beeswax, other insect waxes and spermaceti 462,083 0.05% 43.64 460199 Plaiting materials (excl. vegetable), in sheet 266,060 0.03% 42.86 710812 Gold in unwrought forms non-monetary 570,000,000 59% 34.71 400400 Waste, parings and scrap of rubber (excl. hard 458,462 0.05% 31.33 551419 Woven fabrics, <85% synthetic staple fibres + 190,839 0.02% 30.30 c 283410 Nitrites 145,958 0.02% 28.85 20 Product Export Export Product description RCA code value share 520710 Cotton yarn (excl. sewing), put up for retail s 339,991 0.04% 21.88 200899 Other fruit, etc, prepared or preserved, nes 3,600,000 0.37% 16.82 440399 Wood, nes in the rough..., (excl. treated) 4,800,000 0.50% 14.71 710310 Prec or semi-prec stones (o/t diamonds) 634,547 0.07% 13.20 unwkd o 200799 Other jams, fruit jellies, marmalades, etc, bei 1,700,000 0.18% 12.86 520299 Cotton waste, nes 231,304 0.02% 12.63 310230 Ammonium nitrate 1,800,000 0.18% 11.25 100890 Other cereal, nes 457,370 0.05% 10.22 10600 Other live animals, nes 655,530 0.07% 8.19 630531 Sacks and bags, used for packing goods, of 780,452 0.08% 8.10 poly 200710 Jams, fruit jellies, marmalades, etc, 171,692 0.02% 7.20 homogeniz 410729 Leather of reptiles, nes 144,720 0.02% 7.14 120210 Ground-nuts in shell, not roasted or otherwise 137,326 0.01% 6.67 410320 Hides and skins of reptiles, fresh or preserved 129,152 0.01% 6.50 520300 Cotton, carded or combed 104,495 0.01% 5.79 620422 Women's or girls' ensembles of cotton 50,610 0.01% 5.20 360300 Safety fuses; detonating fuses; caps; igniters; 432,544 0.05% 4.50 410390 Other hides and skins, fresh or preserved, not 96,138 0.01% 4.30 551449 Printed woven fabrics, <85% synthetic fibres + 24,523 0.00% 4.10 970600 Antiques of an age exceeding one hundred 603,461 0.06% 3.44 years 970500 Coll & coll pce of zoo,bot,mineral,hist,anatom, 223,461 0.02% 3.43 482340 Rolls, sheets and dials, printed for self-recor 27,059 0.00% 3.41 71490 Roots and tubers with high starch content, 90,731 0.01% 3.36 fres 520839 Dyed woven cotton fabrics, with >=85% 175,272 0.02% 3.27 cotton, n 283650 Calcium carbonate 168,997 0.02% 3.21 280430 Nitrogen 32,474 0.00% 3.09 390220 Polyisobutylene, in primary forms 167,795 0.02% 2.74 291570 Palmitic acid, stearic acid, their salts and es 124,504 0.01% 2.65 81340 Other dried fruit, nes 136,160 0.01% 2.59 110290 Other cereal flour, nes 67,360 0.01% 2.50 321000 Other paints and varnishes (incl. enamels...). 138,358 0.01% 2.46 401590 Articles of apparel and clothing accessories of 43,845 0.00% 2.37 81290 Fruit and nuts, provisionally preserved, not fo 15,388 0.00% 2.29 620322 Men's or boys' ensembles of cotton 40,352 0.00% 2.21 190230 Other pasta, nes 311,534 0.03% 2.13 21 Product Export Export Product description RCA code value share 200510 Homogenized vegetable, preserved other than 11,380 0.00% 1.97 by 150300 Lard stearin, lardoil, oleostearin, oleo-oil an 11,379 0.00% 1.94 521215 Printed woven fabrics of cotton, =<200g/m2, 9,878 0.00% 1.85 nes 100820 Millet 15,947 0.00% 1.76 30549 Smoked fish (excl. salmon and herrings) 43,528 0.00% 1.67 10420 Live goats 45,772 0.00% 1.62 551429 Dyed woven fabrics, <85% synthetic fibres + 13,266 0.00% 1.51 cot 220210 Waters (incl. mineral and aerated), with 698,808 0.07% 1.50 added 200980 Juice of other single fruit, unfermented, not c 208,616 0.02% 1.47 282890 Hypochlorites (excl. of calcium) and chlorites; 25,972 0.00% 1.42 282300 Titanium oxides 69,270 0.01% 1.36 10120 Live asses mules and hinnies 2,115 0.00% 1.22 520790 Cotton yarn (excl. sewing), put up for retail s 5,866 0.00% 1.17 970300 Original sculptures and statuary, in any materi 245,344 0.03% 1.14 391721 Tubes, pipes and hoses, rigid, of polymers of e 125,069 0.01% 1.08 80130 Cashew nuts, fresh or dried 391,996 0.04% 1.03 D. Economic Complexity Index 4. Fitness is a term used to estimate complexity. of countries and complexity of products are specified as a dynamical system as follows (Tacchella et al, 2012): where Fc(n) is the Fitness of country c at the n’th iteration of the algorithm. Conversely, Qp(n) is the n’th iteration of the Complexity of product p. Mcp represents the matrix of binary RCA values that indicate whether country c is a competitive exporter of product p. At each step, F and Q are normalized. 5. Starting conditions for the algorithm are Fc =1 and Qp =1. Product space density 6. Density represents the average proximity of a new potential product j to a country’s current competitive export (Hidalgo et al, 2007): 22 where ωjk is the density of good j for country k. ϕij is the proximity between good i and good j, where proximity is defined as the minimum pairwise conditional probability of a country exporting good I given that it exports good j. E. Definition of the Product Space of a Country The product space is a network representation (mapping) of goods in the Standard International Trade Classification (SITC) system, where connections between nodes are based on the proximity among products. Several factors determine the level of proximity among products. For instance, Leamer (1987) stresses the importance of the intensity of broad factors of production such as labor, land, and physical capital. Lall (2000) emphasizes instead the level of technological sophistication. Rodrik et al. (2002) look at the role played by institutions. All of these measures are based on a priori notions on what makes a product more similar to another, assuming that factors of production, technological sophistication or institutional quality exhibit little specificity. Proximity is however estimated through trade data: goods that are frequently exported together receive a high proximity score. As proximity is calculated globally and across time, countries having the same map of the product space, may only effectively export a limited and different subset of products Moreover, each country occupies different parts of the product space, given its level of competitiveness in different industries. Where a country is located in the product space matters, since the number of nearby products determines how many upgrading and diversification opportunities are available. The idea is often explained through the following analogy: “Think of a product as a tree and the set of all products as a forest. A country is composed of a collection of firms, i.e., of monkeys that live on different trees and exploit those products. The process of growth implies moving from a poorer part of the forest, where trees have little fruit, to better parts of the forest. This implies that monkeys would have to jump distances, that is, redeploy (human, physical, and institutional) capital toward goods that are different from those currently under production. Traditional growth theory assumes there is always a tree within reach; hence, the structure of this forest is unimportant. However, if this forest is heterogeneous, with some dense areas and other more-deserted ones, and if monkeys can jump only limited distances, then monkeys may be unable to move through the forest. If this is the case, the structure of this space and a countr y’s orientation within it become of great importance to the development of countries”. Source: Hidalgo et al 2007. 23 F. Japan’s Product Space, 2014 Source: Atlas of Economic Complexity. G. Export Diversification – Lessons Learned Malaysia and Thailand: Malaysia and Thailand stand out as successful examples of both vertical and horizontal diversifications. The governments of these two countries adopted a dual strategy to upgrade natural resource- based industries (such as palm oil and rubber products in Malaysia and agricultural and fish products in Thailand) and to encourage labor-intensive manufactured exports, most notably clothing and electronics. Agriculture played a key role in the industrialization process, making these countries a successful example of Newly Agro- Industrializing Countries (NAIC). The development of traditional (e.g. rice and rubber) and high-value, export- orientated agriculture stimulated the growth of agro-industry. In the case of palm oil and rubber, Malaysia set up specialized agencies to promote production and upgrading, and used the proceeds of production and export taxes to finance research and development investments. Both countries established EPZs and licensed bonded warehouses as a means of stimulating manufactured exports and attracting foreign investment. FDI came mostly from neighboring countries (Japan and Asian NIEs). Development of natural resource-based sectors helped both countries to cope with the economic downturn post mid-1990s, which hit manufactures exports most severely. Kenya: has sought to diversify away from traditional commodities (i.e. tea and coffee) to processed products (such as preserved fruit and fish products), to the production of new types of niche products (such as “off -season” and “specialty fresh vegetables” or cut flowers) and to manufacturing (apparel, clothing accessories and leather products). Results have been mixed, however. While Kenya is now the largest African cut-flower grower and one of the biggest exporters of fresh horticultural produce, the country has been less successful in manufacturing. Notwithstanding initial positive achievements, the provision of incentives to export-oriented manufacturing firms failed to sustain export growth. Kenya had already emerged in the late 1960s as a supplier of “off-season” fruits and vegetables to the United Kingdom and then to other European markets. Besides the booming trade in fresh horticultural produce, Kenya started to develop cut-flower exports. This industry underwent a major transformation, thanks to foreign investment, e.g. the establishment of a Danish company granted attractive 24 investment terms. The company brought in capital and expertise to generate considerable spin-offs. Several expatriate professionals left the company and started up their own small flower businesses. In the 1970s, the Horticultural Crops Development Authority managed an experimental program to train smallholding farmers in flower cultivation and to organize their harvest for export. The great expansion of the sector in the 1980s increased the demand for technical assistance, which gave rise to a technical support cluster of specialized service suppliers. Cut-flower exports took-off in the 1990s with significant reforms in import procedures, foreign exchange and air freight sectors, improvements in infrastructure and active investment promotion. Dependent on foreign capital and expertise, the industry increasingly saw the emergence of Kenyan players with good expertise, and the country is now largely self-sufficient in in-house knowledge and provides business services to other African countries Uganda: the Lake Victoria fish industry exemplifies both opportunities and challenges with respect to commodity upgrading. Overall, this sector has experienced spectacular growth in recent years. Fishing activities have developed around the Lake since the 1990s, providing today some $200 million per year in export earnings and employing around 200 thousand people. Until that time, large fish stocks were almost unexploited for commercial purposes. Only about a tenth of the fish population of the Lake was sold un-processed on the local market. During the 1990s, responding to an increase in the European demand for fresh water fish, a few Ugandan companies started processing and airlifted fresh Nile Perch in the form of fish fillets. As soon as the sector expanded, problems of quality and phytosanitary standards emerged, due to inadequate chilling equipment, as well as environmental concerns as a result of fish processing waste. Low yields (due to high wastage in fish filleting) and the 1999 EU ban on Ugandan imports due to suspected fish poisoning — leading to a 35 per cent decrease in exports — risked undermining the viability of the sector. The Uganda Fish Processors and Exporters Association (UFPEA) played a critical role in obtaining technical assistance from donors and establishing a reliable fish safety assurance system in compliance with EU standards. UFPEA members have directly invested more than $100 million in the sector. The growth of the fresh fillet sector has spurred the development of side sectors — such as processing of wastage for producing animal feed and fertilizers — as well as downstream sectors — such as the packaging and freight and shipping companies — and upstream sectors with fishermen adapting their techniques to the new quality and organizational requirements set by the industry. The development of fish exports has also generated spillovers to other sectors, thanks to the improvement of cold storage and freight services: e.g fish exporters joined forces with flower exporters’ ground-handling firms to reduce freight rates and improve freight services at Entebbe Airport. Sources: Reinhardt (2000) on Malaysia/Thailand, Glenday et al. (2000), Thoen (1999) on Kenya, Dijkstra (2001) on Uganda. H. Trade Logistics and Costs11 Logistical performance D’un point de vue général, l’Afrique occupe une place plutôt marginale dans le commerce international. D’après le CNUCED, la part de l’Afrique dans le commerce international quand bien même qu’en hausse représente 3% du commerce mondial des marchandises en 2012. Et pareillement, comme nous l’avons vu dans la section précédente, le niveau d’ouverture du Mali est en deçà de ce qu’il aurait dû être étant donné son niveau de développement. Plusieurs facteurs sont pointés du doigt pour expliquer ce faible niveau de commerce extérieur parmi lesquels figurent en bonne place les coûts commerciaux élevés. Les coûts commerciaux désignent tous les coûts encourus pour faire parvenir un bien final à un utilisateur final, autres que le coût de production du bien lui-même (CEA, 2010). Les pays Africains en général font face à des coûts commerciaux particulièrement élevés pour les produits manufacturés en comparaison avec les autres régions en développement. Ces observations se confirment au niveau du Mali, en effet les coûts commerciaux12 indexés sur les produits manufacturés sont élevés que ceux des produits agricoles (incluant aussi la pêche et l’élevage) comme le montre la figure A3.1. En gros, les coûts commerciaux ont des effets 11This Annex was prepared by Arsene kaho as contribution to this study. 12Il s’agit des coûts bilatéraux entre deux pays relativement aux coûts commerciaux domestiques dans chaque pays. Ici nous prenons la moyenne de ces coûts sur les produits considérés et sir l’ensemble de la période considérée. Le reste des détails sur cette mesure figure en annexe. 25 défavorables sur les résultats économiques des pays. Car dans les pays où ceux-ci sont relativement élevés, les consommateurs voient leur bien être diminuer à cause des prix plus élevés des biens importés. Et c’est justement pour juguler ses contrecoups que la notion de « facilitation des échanges » a émergé (conférence ministérielle de l’OMC de 1996). Elle se définit alors comme la simplification et de l’harmonisation des procédures du commerce international concernant les activités, pratiques et formalités relatives à la collecte, la présentation, la communication et au traitement des données nécessaires à la circulation des biens dans le cadre du commerce international. Figure A3.1 : Les coûts commerciaux du Mali par secteur (2004-2009 vs 2010-2014) Source : UNESCAP Le Mali est de son côté plutôt engagé dans la facilitation des échanges. Il a ratifié le nouvel Accord de l’Organisation mondiale du Commerce (OMC) sur la facilitation des échanges (AFE). Il constitue le dixième État africain à ratifier l’accord et le quatrième en Afrique de l’Ouest après la Côte d’Ivoire, le Niger et le Togo. Conclut en décembre 2013 à la Conférence ministérielle de Bali, l’AFE contient des dispositions visant à accélérer le mouvement, la mainlevée et le dédouanement des marchandises, y compris des marchandises en transit. Il prévoit en outre des mesures en vue d'une coopération effective entre les douanes et les autres autorités compétentes pour les questions de facilitation des échanges et de respect des procédures douanières. Il comporte aussi des dispositions relatives à l'assistance technique et au renforcement des capacités dans ce domaine. Le Mali a également accepté une modification l’Accord sur les ADPIC adoptée en 2005 et destiné à faciliter l’accès aux médicaments essentiels dans les pays pauvres. Environnement infrastructurel. De nos jours, plus de 90 % du commerce international transite par les ports. Par ailleurs, le transport maritime possède un avantage important en matière de coûts par rapport au transport par terre en ce qui concerne les marchandises solides ou sous forme liquide en vrac ou conteneurisées (CEA, 2010). Malheureusement, le Mali est un pays enclavé qui doit dépendre du port le plus proche pour ce qui est du transport maritime, en l’occurrence le port de Dakar. Ainsi la performance de ce port, influence grandement les coûts commerciaux du Mali, sans compter que celui n’a aucun « effet » sur ces performances-là. Or, la productivité moyenne des ports africains représenterait environ 30 % de la norme internationale en ce domaine. L’inefficacité de la gestion des ports et le mauvais entretien des équipements souvent insuffisants sont responsables de cette faible productivité (Kouty, 2014). Pour se faire une idée de l’inefficacité portuaire, l’on peut jeter un coup d’œil sur le temps de séjour des 26 marchandises. Il était en moyenne de 18 jours au port de Douala, 12 jours au port de Mombasa, 10 jours au port de Dakar et 4 jours au port de Durban (Figure A3.2).13 Par ailleurs, le temps de séjour des marchandises est très élevé dans les ports africains et représente environ trois fois le temps de séjour moyen dans les ports d’autres régions en développement (CEA, 2010). Figure A3.2: Temps de séjour dans les principaux ports de corridors d’Afrique subsaharienne 20 15 10 5 Temps de séjour (en jours) 0 Source: Kouty, 2014. Par ailleurs, le Mali souffre aussi d’une insuffisance et d’un mauvais état des réseaux routiers. En moyenne, la proportion des tronçons revêtus est plus importante que la proportion des tronçons non revêtus (figure A3.3). Au Mali sur 17107 kilomètres de routes, seulement 2760 km sont revêtus, ce qui représente à peu près 16,1% du réseau routier. Toutefois cette tendance se généralise au niveau de l’UEMOA également. Cette insuffisance du réseau routier est dommageable pour le Mali puisque cela entame une circulation plus rapide des produits commerciaux au Mali. En effet ce dernier étant enclavé, le rôle que joue le transport routier dans l’acheminement des produits devrait être bien plus important en guise de compensation. Figure A3.3 : Proportion des routes revêtues ou non revêtues dans l’UEMOA TGO SEN paved roads non-paved roads NER MLI GNB CIV BFA BEN 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 13 Au port d’Abidjan, celui-ci vaut en moyenne 7 jours, en 2007. 27 En dépit de son enclavement, le fait que le Mali soit doté d’un chemin de fer est un véritable atout. En effet les chemins de fer sont le mode de transport le plus économique pour déplacer sur terre des quantités importantes de marchandises sur de grandes distances (CEA, 2010). Mais toutefois cet atout mérite d’être renforcé. A titre d’exemple, pour aller par train Bamako à Kayes, deux villes maliennes, on met 17 heures ou parfois même deux jours. Dans ce sens l’initiative titanesque de la rénovation de la ligne de chemin de fer entre le Mali et le Sénégal est à encourager.14 Environnement douanier. L’environnement douanier africain est réputé le moins efficace à cause notamment du nombre de documents excessifs, du nombre jours nécessaire à l’importation et à l’exportation, et aussi de l’absence la libre pratique même dans les différents ACR africains. Dans certains pays africains, les pertes dues à des procédures douanières compliquées et inefficaces et autres obstacles bureaucratiques dépassent 5% du PIB (OCDE, 2009a ; 2009b). La figure A3.4 nous révèle que l’Afrique Subsaharienne est la région du monde où les procédures d’exportations sont les plus compliquées. et n’ont pas diminué entre 2005 et 2012. Il faut en moyenne entre sept à huit documents pour exporter en ASS contrairement à six en Amérique Latine ou même quatre dans l’Union Européenne. Ces procédures lourdes ont pour conséquence qu’elles allongent des délais de dédouanement des marchandises et par conséquent affectent positivement les coûts commerciaux. En ce qui concerne le Mali, le nombre de documents requis pour l’exportation est relativement faible comparativement aux autres pays de l’UEMOA et de l’Afrique Subsaharienne. Toutefois ce nombre reste élevé lorsque nous traversons les frontières africaines. Par ailleurs, le temps nécessaire pour exporter et importer est très long en Afrique subsaharienne comparativement à d’autres régions en développement. Par exemple, pour dédouaner une marchandise en Afrique Subsaharienne, il faut compter en moyenne 38 jours contre 20 jours en Amérique latine (figure A3.5). Pour dédouaner une marchandise, il faut en moyenne 35 jours, ce qui est relativement long même au sein de l’UEMOA (Seul le Burkina Faso et le Niger prennent plus de temps), et pis très long au regard des autres zones du globe. Figure A3.4 : nombre de documents à fournir par exportateur (moyenne 2005-2009 vs 2010-2014) Source : l’auteur, à partir des données de la Banque Mondiale (2015). 14En cas de réussite le trajet Bamako-Dakar pourrait être parcouru en 5 heures, mais aussi des 300 000 tonnes de marchandises transportées entre les deux par an l’on pourrait aller jusqu’à 3 voire même 4 millions tonnes de marchandises. Une véritable aubaine pour le Mali, pays enclavé. 28 Figure A3.5 : Temps nécessaire pour exporter et importer en jours (moyenne sur la période 2010- 2014) Source : les auteurs, à partir des données de la Banque Mondiale (2015). Trade Costs Le Modèle. En se penchant à nouveau sur les coûts commerciaux, la littérature distingue généralement deux principales sources de coûts commerciaux (Kouty, 2014) ; Arvis et al., 2013) : ✓ Les sources exogènes qui ne dépendent pas des politiques publiques (la distance géographique, la frontière commune, l’histoire, la langue, la participation à une même communauté régionale etc.) ; ✓ Les sources endogènes qui sont spécifiques au pays (l’environnement douanier, l’environnement infrastructurel, l’environnement institutionnel). Dans ce qui va suivre, nous essayons d’identifier les déterminants des coûts commerciaux du M ali. Le modèle que nous présentons d’inspire de la modélisation gravitaire de Kouty., (2014); Arvis et al., 2013. Sauf que dans notre on s’intéresse à la relation que nous un seul pays c’est -à-dire le Mali avec ses partenaires. Le modèle se présente comme suit: log(CCijt ) = β0 + β1 Yjt + β2 TCijt + β3 log(Dijt ) + β4 log(Sjt ) + β5 log(Eijt ) + β6 log(Fijt ) + β7 UEMOAijt + β8 Lijt + β9 COLONijt + β10 log(Cijt ) + β11 log(INSTijt ) + ϵijt (2.1) CC, désigne les coûts commerciaux. Les variables explicatives sont : le PIB (Y), le taux de change (TC), la distance (D); la superficie (S); l’enclavement (E); la frontière commune(F), l’appartenance communauté économique régionale qui est ici l’UEMOA (UEMOA); la langue commune (L), le colonisateur commun (colon), les coûts de lancement d’une affaire (CE) et une variable liée au cadre institutionnel (INST). Cette variable institutionnelle peut être l’environnement douanier (ED), la pénétration des nouvelles technologies (Tech) et la connectivité maritime et aérienne (LSCI). Notre choix de ne pas introduire ces variables simultanément se justifie à cause de la forte corrélation existant entre ces variables et celle qu’elles entretiennent avec la majorité des régresseurs mentionnés. Se faisant, nous limitons ainsi les biais inhérents à la multicolinéarité de ces variables ; étant donnée qu’elle est réputée pour entamer le 29 diagnostic de la significativité des coefficients. En effet en présence de multicolinéarité, les écarts types sont élevés et donc les t-stat sont faibles et l’on a tendance à rejeter à tort la significativité des coefficients. Finalement nous optons pour une approche séquentielle où nous introduisons ces variables institutionnelles séquentiellement et non simultanément. L’estimation de l’équation (2.1) se fera d’abord par la méthode des MCO, ensuite par la méthode du maximum de vraisemblance. Cette dernière paraît plus appropriée lorsque la variable dépendante contient les valeurs nulles et que l’on utilise l’expression logarithmique.15 Les Données. Les données utilisées proviennent de plusieurs sources à savoir l’UNESCAP-World Bank Trade Cost Database pour les coûts commerciaux bilatéraux, la Banque Mondiale (World Development Indicators) et Global Competitiveness Report pour les autres variables explicatives. L’analyse englobe au total 96 pays (dont le Mali et 95 partenaires commerciaux)16 et couvre la période 2005-2007. La définition des variables et les sources de données sont contenues dans le tableau A3.1. Voir aussi l’encadre 1 et les tableaux 1,2 en annexe. Tableau A3.1: définition des variables et sources de données Variables Définition Source Coûts commerciaux Coûts commerciaux bilatéraux en équivalent ad UNESCAP-World Bank Trade valorem (%) entre les deux pays i et j Cost Database PIB PIB constant (2000) Banque Mondiale (2013) World Development Indicators (WDI) Distance Distance entre les capitaux des deux pays CEPII Superficie CEPII L’enclavement Variable indicatrice=1 si les deux pays sont CEPII enclavés Colonisateur commun Variable indicatrice =1 si les deux pays ont un CEPII colonisateur commun Frontière commune Variable indicatrice =1 si les deux pays ont une CEPII frontière commune Langue commune Variable indicatrice =1 si les deux pays partage CEPII une même langue officielle UEMOA Variable indicatrice =1 si les deux pays Auteur appartiennent à l’UEMOA Efficience portuaire Moyenne géométrique de l’indice de la qualité Global Competitiveness des infrastructures portuaires des deux pays Report (GCR) Environnement douanier Moyenne géométrique de l’indice performance GCR logistique (Efficiency of customs clearance process 1=faible à 5=élevé) des deux pays Nouvelle technologies Moyenne géométrique de l’indice de GCR performance logistique (Competence and quality of logistics services , 1=faible à 5=élevé) Coûts de lancement d’une Moyenne géométrique du coût au lancement Doing Business affaire (CE) des affaires dans les pays i et j Taux de change Moyenne géométrique du taux de change WDI moyen en dollar des deux pays Les Résultats. Les résultats des régressions sont contenus dans le tableau A3.2. Les régressions (1) à (5) montrent que toutes les variables ont des signes attendus. Les facteurs exogènes comme la distance, 15 Ici il s’agit de l’estimateur du Maximum de Vraisemblance Pseudo Poisson (PPML). 16 Voir Tableau 1 ci-dessous pour la liste des pays. 30 l’enclavement affectent positivement et significativement les coûts commerciaux. L’augmentation de 1% de la distance entre le Mali et ses partenaires commerciaux accroît les coûts commerciaux de 4%. En effet la distance qui sépare un pays de ces principaux partenaires commerciaux donne généralement lieu à une augmentation des coûts de transaction qui est proportionnelle à l’éloignement de ce pays par rapport auxdits partenaires comme l’on souligné Wilson et al., (2003). Par contre le taux de change, la langue officielle commune, la frontière commune et l’appartenance à une même communauté régionale (que le MALI à savoir l’UEMOA) influencent négativement et significativement les coûts commerciaux. Par exemple, l’utilisation d’une même langue officielle (le français) par les deux partenaires commerciaux réduit les coûts commerciaux. Les facteurs endogènes comme la connectivité du trafic aérien et maritime, la pénétration des nouvelles technologies influencent négativement les coûts commerciaux. Par exemple une meilleure diffusion technologique de 1% réduit les coûts commerciaux de 15,3%. Toutefois lorsque nous ajoutons l’efficience portuaire au nombre des variables explicatives, il apparaît que cette dernière influence négativement les coûts commerciaux. Même si ce résultat est très important, nous nous sommes abstenus de prendre cette variable en compte dans les régressions. En effet, le Mali étant un pays enclavé il ne peut influencer directement l’efficience portuaire. Quoi qu’il en soit des mesures innovantes allant dans ce sens sont à encourager, puisque dans la plupart des pays africains, les temps d’attente non justifiés lors de l’accostage des bateaux augmentent les coûts commerciaux et occasionnent des frais de stockage supplémentaires dans les ports d’entrée. Ces résultats sont conformes à ceux d’Arvis et al., (2013), Kouty (2014). Une amélioration de l’environnement douanier qui pourrait notamment passer par l’utilisation des nouvelles technologies par l’administration douanière joue un rôle important dans la réduction des coûts commerciaux et par conséquent dans l’augmentation du trafic. Ce résultat confirme celui de Lisinge (2005) et Kouty (2014) qui a observé que les pays africains qui utilisent les nouvelles technologies de l’information aux postes frontière améliorent l’efficacité des services de perception des recettes et réduisent considérablement le temps d’attente. Un résultat important ici est celui relatif au PIB du partenaire commercial. Celui-ci affecte négativement les coûts commerciaux indiquant ainsi que le commerce avec les pays développés entraîne les coûts de commerce moindres pour le MALI. Ceci pourrait partiellement justifier l’accroissement des échanges Maliens avec des économies comme la Chine et l’Inde. Et contrairement aux résultats trouvés par Kouty (2014) et la Banque Mondiale (Doing Business) sur l’Afrique, il apparaît qu’au Mali les coûts de lancement d’une affaire n’influencent pas les coûts commerciaux. En guise de conclusion, notre analyse économétrique nous a permis de montrer que ces coûts commerciaux élevés du Mali sont imputables à la fois à des facteurs endogènes mais également à des facteurs exogènes. Plus précisément, un renforcement de la connectivité maritime et aérienne, une amélioration de l’environnent douanier et un meilleur emploi de la technologie réduisent les coûts commerciaux. D’autres facteurs exogènes comme la distance, l’enclavement affectent positivement et significativement les coûts commerciaux. En effet, la situation géographique a des incidences sur les coûts du commerce malien. Il est un pays sans littoral dépendant des pays de transit voisins pour exporter et importer ses marchandises. De ce fait il subit des coûts de transaction particulièrement élevés. Par contre la langue officielle commune, la frontière commune et l’appartenance à une même communauté régionale influencent négativement et significativement les coûts commerciaux. En termes d’implication de politique économique, nous recommandons l’utilisation des nouvelles technologies pour simplifier et accélérer les procédures douanières. Par exemple le système d’information avancée sur les marchandises (ACIS) de la CNUCED permet de suivre la marchandise depuis son expédition et la dédouaner à temps. Par ailleurs, il faut aussi s’atteler à réduire les déficits d’infrastructure afin de faciliter l’acheminement des marchandises vers leurs destinations. De tels projets devront appeler à une coopération régionale comme 31 celle en vigueur sur les sections de route Aboisso-Noé et Mpataba-Elubo. Il faut aussi veiller à une meilleure synchronisation du trafic aérien malien avec celui du monde. Bref, la mise en place des mesures de facilitation des échanges va permettre de réduire les coûts commerciaux et par conséquent doper les échanges du Mali, notamment avec les pays africains et sa participation plus accrue au commerce inter- régional au sein de l’UEMOA (le commerce inter-régional de l’UEMOA s’élevait à 7 % du PIB en 2013). Tableau A3.2 : Les déterminants des coûts commerciaux du MALI (PPML) (1) (2) (3) (4) (5) Frontière commune -0.073*** -0.073*** -0.074*** -0.076*** -0.071*** (0.012) (0.027) (0.028) (0.026) (0.026) Colonisateur commun 0.001 -0.031 -0.028 -0.026 -0.027 (0.012) (0.025) (0.025) (0.026) (0.023) Distance 0.027*** 0.040*** 0.042*** 0.041*** 0.045*** (0.005) (0.010) (0.010) (0.010) (0.013) Langue officielle -0.025*** -0.016 -0.017 -0.016 0.006 (0.007) (0.016) (0.015) (0.016) (0.018) PIB partenaire -0.018*** -0.014*** -0.018*** -0.015*** -0.013*** (0.001) (0.005) (0.004) (0.004) (0.005) Superficie 0.005*** 0.002 0.003 0.001 0.001 (0.001) (0.004) (0.004) (0.004) (0.004) Enclavement 0.035*** 0.026** 0.027** 0.029** 0.023 (0.006) (0.013) (0.014) (0.013) (0.017) UEMOA -0.117*** -0.087*** -0.093*** -0.096*** -0.097*** (0.012) (0.027) (0.027) (0.025) (0.026) Coût d’entrée 0.005 0.004 0.004 0.009 (0.007) (0.007) (0.007) (0.010) Technologie -0.153* (0.087) Connectivité aérienne -0.127** (0.062) Environnement douanier -0.164** -0.185** (0.073) (0.084) Taux de change -0.010* (0.006) Constante 1.914*** 1.878*** 1.923*** 1.902*** 1.881*** (0.047) (0.126) (0.128) (0.127) (0.143) Observations 986 185 185 185 154 R2 0.390 0.462 0.463 0.466 0.463 Stand. errors in (.) *** p<0.01, ** p<0.05, * p<0.1 32 Trade Policy Imports. Largement basé sur des dispositions de l'UEMOA, le régime commercial du Mali n'a pas significativement changé depuis son dernier EPC en 2004. Quelques 42% de ses lignes tarifaires demeurent consolidées et le Mali applique le tarif extérieur commun (TEC) de l'UEMOA depuis le 31 janvier 2000, ainsi que les autres instruments de politique commerciale tels qu'harmonisés au niveau communautaire, à savoir les autres droits et taxes perçus uniquement sur les importations non originaires de l'UEMOA ou de la CEDEAO; les règles d'origine des deux groupements régionaux; la valeur en douane des marchandises, avec une liste nationale de valeurs de référence tirée de celle de l'UEMOA; les mesures commerciales de circonstance, entre autres. Un système d'inspection des importations avant leur expédition demeure en vigueur au Mali. Des exonérations de droits de douane, notamment aux entreprises agréées sous le Code minier et aux entreprises touristiques et d'hôtellerie, sont accordées. Le taux général de la TVA au Mali est de 18%. Des droits d'accises (spécifiques) s'appliquent, entre autres, aux boissons alcoolisées, aux produits pétroliers et cigarettes. Toutes les normes nationales en vigueur au Mali sont identiques aux normes internationales. Toutefois, certains produits importés doivent obligatoirement porter sur leurs emballages la mention "Vente au Mali". Les produits importés concernés sont en concurrence avec des produits nationaux qui doivent porter la mention "Fabriqué au Mali". Depuis janvier 2010, l'importation de sucre peut être exonérée de la taxe conjoncturelle d'importation, contre l'achat du sucre d'une entreprise malienne. Enregistrement. Le Décret N° 00-505/P-RM du 16 octobre 2000 régit les opérations d'importation au Mali. Il précise que ces opérations peuvent s'effectuer soit par des personnes physiques justifiant de la qualité d'importateur, soit par des entreprises ayant conclu une convention avec l'État et en exécution des dispositions de celle-ci, soit par des entreprises étrangères en exécution d'un marché public, soit par des établissements à caractère administratif, technologique, professionnel, scientifique et culturel, soit par une administration publique pour les besoins de son fonctionnement.29 L'exigence de l'agrément préalable du Ministre du commerce pour les personnes étrangères voulant exercer ces activités est supprimée depuis 2001.30 Toutefois, certaines activités commerciales peuvent être réservées aux nationaux maliens par décret (par exemple, l'importation d'armes et de munitions). L'exercice des activités commerciales reste subordonné à l'immatriculation au Registre du commerce ou au répertoire des métiers. Les démarches requises peuvent s'accomplir au Centre des formalités des entreprises (CFE) de la Chambre de commerce et d'industrie du Mali (CCIM) ou auprès du tribunal de commerce. Les dossiers sont généralement traités dans un délai de 48 heures et les informations sont diffusées auprès des instances administratives concernées (par exemple, la Direction nationale des impôts, la Direction nationale de la statistique et de l'informatique (DNSI)), et un numéro d'identification fiscale est délivré. À l'exception de certaines professions (par exemple, les exportateurs de bétail), le paiement d'une patente Import-Export, dont le montant est fixé sur la base du chiffre d'affaires, est exigé. Procédures douanières. En vigueur depuis le 1er janvier 2002, le Code des douanes régit les procédures d'importation et d'exportation au Mali.31 Selon le Code, la forme du régime douanier sollicité peut être soit définitif (importation ou exportation), soit suspensif (transit, entrepôt de stockage, entrepôt industriel, usine exercée par la douane (production sous contrôle douanier), admission temporaire, importation temporaire, exportation temporaire). Les marchandises transportées sous douane ou placées sous régime douanier suspensif doivent être couvertes par un acquit-à-caution. Les modalités de l'application du Code font l'objet d'arrêtés du Ministre de l'économie et des finances. Selon le Code des douanes, une déclaration en détail unique (DDU) est utilisée aux fins de l'importation et de l'exportation. Seuls les commissionnaires agréés en douane peuvent effectuer les opérations de dédouanement. L'agrément du Ministre en charge des douanes est nécessaire afin d'exercer l'activité de commissionnaires en douane; les personnes étrangères ne peuvent obtenir l'agrément qu'à condition de réciprocité pour les maliens dans leur pays 33 d'origine. Tout commissionnaire agréé en douane peut établir des DDU à condition que le bureau en question soit informatisé. Dans le cas contraire, la déclaration est faite de façon manuelle. Les procédures douanières sont informatisées sur la base du Système douanier automatisé (SYDONIA++), pour 99,2% du trafic actuel. La DDU doit être accompagnée des documents suivants : au titre du programme de vérification, une intention d'importation et une attestation de vérification ; et au titre des opérations de dédouanement, la facture d'achat, la déclaration des éléments de valeur (ou la valeur de référence le cas échéant), le certificat d'origine si nécessaire, et les autres documents usuels (assurance, qualité, identification fiscale de l'importateur). L'enlèvement des marchandises ne peut se faire qu'après la liquidation et l'acquittement de tous les droits et taxes, sauf en cas de crédit d'enlèvement ou d'un crédit des droits et taxes. En outre, les importateurs sont tenus de s'acquitter de l'acompte sur divers impôts et taxes (ADIT), dont le taux est fixé à 3% de la valeur c.a.f. pour les importations couvertes par l'Attestation de vérification (AV), et à 7,5% pour les importations sans AV. Cet acompte est reversé à l'importateur après paiement des impôts et taxes dus. Et pour certains types de marchandises, il existe une procédure accélérée de dédouanement dite "enlèvement direct".32 Pour cette procédure, une déclaration simplifiée ("D24") est utilisée. Inspection avant expédition et évaluation en douane Le programme de vérification des importations (PVI) du Mali est en place depuis 1989 ; sa notification à l'OMC date de 1998.33 Il s'applique aux importations dont la valeur f.a.b. est égale ou supérieure à 3 millions de FCFA et qui n'en sont pas exonérées par arrêté.34 Celles-ci doivent faire l'objet d'une déclaration préalable d'importation (DPI) émise par la société BIVAC, à laquelle le PVI est confié depuis janvier 2007 à la suite d'un appel d'offres.35 Après l'inspection des marchandises, BIVAC émet une attestation de vérification (ou "un avis de refus d'attestation") que les importateurs joignent à leurs dossiers pour la déclaration en douane. Toute opération d'importation, qu'elle soit soumise ou non au PVI, doit assumer la contribution pour le PVI, qui est de l'ordre de 0,75% de la valeur f.a.b. des marchandises importées et à la charge de l'importateur. La durée de l'opération de dédouanement varie de deux à six heures à compter du dépôt de la DDU. La réglementation de l'UEMOA au sujet de l'évaluation en douane adoptée en 1999 est entrée en vigueur au Mali le 31 décembre 2002 à la suite de l'élaboration de la réglementation nationale (rapport commun, chapitre III 2) i)). Toutefois, le Mali n'a présenté aucune notification ou éclaircissement à l'OMC en la matière. Conformément aux dispositions du cadre communautaire, les autorités maliennes peuvent utiliser des valeurs de référence en lieu et place de la valeur transactionnelle déclarée par l'importateur.37 Les valeurs de référence sont utilisées pour les produits suivants: thé, farine, huile alimentaire, gomme à mâcher, bonbons, pâtes alimentaires, biscuits, eau minérale, peinture bâtiment et auto, serviettes hygiéniques, cahiers, fils et tissus de coton, tissus imprimés, carreaux, piles, motocycles, et bicyclettes. La liste des produits assujettis aux valeurs de référence est mise à jour tous les six mois. L'importateur peut saisir la Direction générale de la douane pour correction quand des erreurs d'appréciations de l'administration sont établies au cours d'une opération de dédouanement. Règles d'origine Le Mali applique, depuis janvier 2003, les règles d'origine de l'UEMOA, dont les dispositions de base sont harmonisées avec celles de la CEDEAO (rapport commun, chapitre III 2) iii)).38 Le Comité national d'agrément traite conjointement les agréments aux schémas préférentiels de l'UEMOA et de la CEDEAO. Au besoin, les opérateurs économiques sont invités à déposer simultanément deux dossiers de demande d'agrément. La liste des produits agréés, accompagnée des dossiers, est transmise aux Commissions respectives de l'UEMOA et de la CEDEAO pour une diffusion auprès des États membres. Le nombre d'entreprises maliennes agréées au régime de préférences tarifaires de l'UEMOA s'élève à 53, avec un total de 222 produits correspondants. Il existe un système de gestion informatisée à la Direction générale des 34 douanes assurant une mise à jour régulière des agréments octroyés dans tous les États membres. À chaque exportation de produits agréés, le certificat d'origine est délivré par le Ministère chargé de l'industrie et visé par le service des douanes. Prélèvements à la douane Droits et taxes de porte Le Mali applique le tarif extérieur commun (TEC) de l'UEMOA depuis le 31 janvier 2000. En conséquence, la moyenne tarifaire s'élève à 12,1%. Le Mali applique également les autres droits et taxes communautaires (rapport commun, chapitre III 2) ii) b)). Il applique la taxe conjoncturelle d'importation (TCI) uniquement aux importations de sucre, l'Acompte sur divers impôts et taxes (ADIT). Sur la période 2004-2008, l'ensemble des droits et taxes perçus au cordon douanier contribuait pour 44,6% aux recettes fiscales totales de l'État (tableau III.1). Consolidations Durant le Cycle de l'Uruguay, le Mali a consolidé au taux plafond de 60% son tarif sur tous les produits agricoles et sur quelques produits non agricoles, à l'exception des lignes tarifaires ayant déjà fait l'objet de consolidation au moment où il était une colonie (Liste XCIV – Mali du GATT 1947). Au total, toutes les consolidations couvrent 42% des lignes tarifaires. Toutefois, pour environ 27% des lignes tarifaires consolidées, les taux appliqués sont supérieurs aux niveaux consolidés ; il s'agit évidemment des taux consolidés au moment où le Mali était une colonie. Le Mali a consolidé au taux de 50% les autres droits et taxes sur les produits couverts par ses consolidations tarifaires lors du Cycle de l'Uruguay. Taxes intérieures Taxe sur la valeur ajoutée (TVA). Le taux général de la TVA au Mali est de 18%, correspondant à la médiane de la fourchette établie au niveau communautaire (rapport commun, chapitre III 2) ii) d)). La TVA sur les importations est calculée sur le prix c.a.f. majoré des droits de douanes et de la redevance statistique. La réglementation de l'UEMOA prévoit des exonérations de TVA (rapport commun, chapitre III). Il n'y a pas de seuil d'assujettissement à la TVA au Mali. Toutefois, toute activité ou prestation de service dont le chiffre d'affaire est au-delà de 30 millions de FCFA est taxable à la TVA. Droits d'accises. Le Mali continue d'appliquer l'impôt spécial sur certains produits (ISCP) de toute origine (y compris de l'UEMOA), ainsi que ceux de fabrication nationale (tableau III.2). Les taux varient selon le produit, entre 3% et 45% ; ils sont fixés par Décret dans la limite d'une fourchette établie par le Code général des impôts, conformément aux dispositions communautaires (rapport commun, chapitre III). L'assiette est la valeur c.a.f. Les produits pétroliers sont sujets à la Taxe intérieure sur les produits pétroliers (TIPP). Les taux varient selon le produit : 5, 6, 10, 25, 93 et 125%. L'assiette est la valeur c.a.f. Concessions de droits et taxes Outre les schémas de préférences tarifaires de l'UEMOA (chapitre II 4)) et de la CEDEAO (chapitre II 3)), le Mali accorde des exonérations de droits de douane aux entreprises agréées sous le Code minier (chapitre IV 3)); aux entreprises franches agréées sous le Code des investissements (chapitre II 3) ii)); aux entreprises touristiques et d'hôtellerie (chapitre IV 6) v)); et à celles agréées sous le Code particulier des investissements immobiliers; aux entreprises réalisant des logements économiques.39 Les exonérations peuvent également concerner les projets agréés aux régimes A et B du Code des investissements, à la discrétion du Ministre du commerce (chapitre II 3) e)). Le niveau annuel du manque-à-gagner du fait des exonérations consenties est en fonction du niveau et de la nature des investissements concernés (par exemple, l'ouverture de nouvelles mines d'exploitation aurifère). En 2009, les exonérations (de tout type) se sont chiffrées à 89 milliards de FCFA. En outre, les importations réalisées au titre de marchés publics 35 financés sur fonds extérieurs bénéficient, selon la convention conclue entre l'État du Mali et le bailleur de fonds, d'une prise en charge par l'État des droits d'entrée et des taxes intérieures. Prohibitions, restrictions quantitatives et licences L'Arrêté n° 2699/MICT-SG du 6 octobre 2001 fixe la liste des produits prohibés à l'importation et à l'exportation. Il établit deux régimes de prohibition – à titre absolu et à titre conditionnel. Les listes des produits soumis à ces régimes (tableau III.3) restent presque inchangées depuis le dernier EPC du Mali en 2004. Le document d'intention d'importation (DPI) reste exigé ; toutefois, la dernière notification du Mali à l'OMC (2001) précise que ce document est délivré sans limite de valeur ou de quantités. Les autorités justifient une telle exigence par des raisons statistiques de suivi de l'évolution du commerce extérieur. En novembre 2007, le Mali a adopté une loi sur les organismes génétiquement modifiés (OGM), intitulée "Sécurité en biotechnologie". Normalisation, accréditation et certification La Loi n° 92-013/AN-RM du 17 septembre 1992 et son Décret d'application n° 92-235/P-RM du 1er décembre 1992 régissent le système de normalisation au Mali. Au niveau national, la Direction nationale des industries (DNI) au sein du Ministère de l'industrie, de l'investissement et du commerce assure le secrétariat du Conseil national de normalisation et de contrôle de qualité. Le Conseil adopte les projets de normes nationales après s'être assuré que les procédures établies pour leur élaboration ont été respectées et que toutes les parties intéressées ont eu la possibilité d'exprimer leur avis. Sept comités techniques conduisent les travaux techniques dans les filières suivantes : céréales et dérivés, fruits, légumes et oléagineux ; textiles, cuirs et peaux ; chimie et environnement ; génie civil et matériaux de construction ; denrées alimentaires d'origine animale ; et électronique. Ceux-ci ont été établis en 1994, et ils regroupent les différents acteurs dans les domaines concernés. La normalisation commence par l'élaboration d'avant- projets par des comités techniques. Ils sont au nombre de sept et sont tous présidés par des représentants du secteur privé. Ces avant-projets de normes sont soumis au Conseil national de normalisation et de contrôle de qualité après une recherche documentaire à caractère international et une mise en enquête publique. Après approbation par le Conseil, ils font l'objet d'un arrêté ministériel. Toutes les normes sont d'application facultative à part celles sur le sel iodé et le rejet des eaux usées (pour raison de santé publique). Pour ces cas, un arrêté interministériel est pris pour rendre obligatoire l'application desdites normes (règlements techniques). Les travaux des comités techniques ont abouti à la mise en place de 149 normes nationales.42 Toutes les normes nationales actuellement en vigueur sont identiques aux normes internationales (par exemple, celle du Codex alimentarius de l'OMS et de la FAO). Le Mali dispose de plusieurs laboratoires dont trois sont en cours d’accréditation : le Laboratoire nationale de santé, le Laboratoire central vétérinaire, et le Laboratoire de nutrition animale. Il n'existe pas d'institution qui délivre le certificat de conformité aux normes maliennes. Le Mali n'est pas non plus signataire d'accord de reconnaissance mutuelle, sauf implicitement dans le cadre des regroupements régionaux (UEMOA, CEDEAO). Le Mali est redevenu membre de l'Organisation internationale de normalisation (ISO) en janvier 2010. Mesures sanitaires et phytosanitaires (SPS) 83. La protection sanitaire et phytosanitaire relève des Ministères de la santé, et du développement rural et de l'environnement. La législation44 détermine les maladies "légalement contagieuses"45 et précise les mesures spéciales à prendre contre chaque maladie (vaccination, abattage sanitaire). La transhumance est autorisée pour les espèces bovine, ovine, caprine et cameline originaires d'États ayant signé un accord avec la République du Mali46, sous réserve de la délivrance d'un certificat de transhumance. Les importations d'animaux domestiques ou sauvages sont soumises à la présentation d'un certificat sanitaire délivré par le 36 pays d'origine. Les animaux non accompagnés de certificat sont mis en quarantaine. La durée de la quarantaine va de 15 à 45 jours. Les frais sont proportionnels à l'activité et sont à la charge du propriétaire. Toutes les importations de produits animaux sont en principe soumises à un contrôle effectué par les services vétérinaires. Les importations et exportations de viandes doivent obligatoirement être accompagnées d'un certificat sanitaire ; les importations ou transits de bétail doivent être accompagnés d'un certificat sanitaire et de vaccination. L'État perçoit une taxe pour ce contrôle. Par exemple, pour les inspections dans les abattoirs, l'État perçoit une taxe par animal abattu qui varie en fonction de l'espèce et de la commune d'abattage, de 500 à 4 000 FCFA par tête. Dans la pratique, des animaux passent la frontière en dehors des postes prévus et échappent au contrôle. La Loi n° 02-013 du 3 juin 2002 et son Décret d'application n° 02-305 fixent les modalités du contrôle phytosanitaire au Mali. Conformément à cette législation, les importations et les exportations de plantes sont soumises à la production d'un certificat phytosanitaire. En raison du manque d'infrastructure et de ressources humaines, les contrôles ne sont pas effectués dans toutes les régions. L'autorité nationale compétente en matière de contrôle phytosanitaire et de conditionnement est la Direction nationale de l'agriculture (DNA). Prescriptions en matière d'emballage, de marquage et d'étiquetage. L'Arrêté n° 05 0001/MIC-SG du 6 janvier 2005 fixe la liste des produits assujettis à des mentions obligatoires sur leurs emballages. Certains produits importés – les cigarettes, allumettes, piles électriques, fils à tisser et tissus, purées et concentrés de tomate, huiles alimentaires et insecticides en spirale et en bombe aérosol – doivent obligatoirement porter des mentions sur l'emballage spécifiques à la destination, telles que "Vente au Mali", le pays de fabrication, le nom du fabricant, et le numéro d'identification de l'importateur ou son adresse. Il convient de signaler que les produits importés concernés sont, dans tous les cas, en concurrence avec des produits nationaux, qui eux, doivent porter la mention "fabriqué au Mali". Les autorités maliennes justifient cette exigence par le souci de faire une démarcation entre les produits légalement importés ou les produits du Mali et ceux qui rentrent par le circuit informel afin de lutter contre la fraude et la contrebande. Mesures commerciales de circonstance. Le Mali ne dispose pas de législation nationale en matière de mesures antidumping, compensatoires et de sauvegarde. Selon les autorités, de telles mesures n'ont jamais été prises par le Mali. Des textes de l'UEMOA sont en vigueur en la matière (rapport commun, chapitre III). Exports Enregistrement. Les formalités d'enregistrement requises en matière d'importation de marchandises à des fins commerciales (section 2) i)) valent également pour les exportations ; ces formalités confèrent le titre de commerçant (importateur/exportateur), avec détention de la patente Import-Export. Outre les commerçants, des producteurs tels que les éleveurs, les artisans ou leurs associations peuvent également exporter leurs productions. Procédures douanières. Les produits à l'exportation font l'objet de contrôles par la société BIVAC qui délivre une attestation de vérification, sauf en cas de dispense. Toute opération d'exportation requiert une déclaration d'intention d'exportation et le paiement de 0,65% de la valeur f.a.b. au titre du PVI. La DDU est également utilisée aux fins des opérations d'exportation dans les mêmes conditions que les importations (section 2) ii)). Un visa de l'Office des changes est également exigé. Les recettes d'exportation sont soumises aux dispositions communautaires (rapport commun, chapitre I 2)). Droits et taxes à l'exportation. Les exportations sont soumises à la TVA au taux zéro, ce qui donne droit au remboursement des droits et taxes sur les intrants ayant servi à la production des biens concernés. La production de l'or, qui est exportée pour l'essentiel, est sujette à une imposition de 3% ad valorem au titre de l'impôt spécial sur certains produits (ISCP). Les exportations du coton subissent également l'ISCP de 3%. 37 Prohibitions, restrictions quantitatives, contrôles et licences d'exportation. L'Arrêté n° 2699/MICT-SG du 6 octobre 2001, fixant la liste des produits prohibés à l'importation, vaut également pour les exportations (tableau III.3). Selon cette réglementation, le régime de la prohibition à titre absolu concerne les exportations de jeunes bovins reproducteurs, tandis que le régime à caractère restrictif (prohibition conditionnelle) concerne: i) les exportations de viandes et animaux vivants (ceci requiert un certificat sanitaire ou zoo sanitaire délivré par le Ministère de l'élevage); ii) les produits de la chasse (nécessité d'un permis ou d'un certificat conformément à la CITES, délivré par les services techniques compétents); iii) les végétaux (un certificat phytosanitaire délivré par les services techniques compétents); et iv) les objets d'art (autorisation du Ministère chargé des arts et de la culture). Annexe: Encadré 1 : le calcul des coûts commerciaux S’appuyant la forme inversée du modèle de gravité développé par Novy (2013), Arvis et al. (2013) calculent les commerciaux bilatéraux de commerce de la façon suivante : (−) = = ( ) − = ( ) − : représente le coût commercial bilatéral entre les pays i et j ; : représente le coût commercial intra-national ; , représentent respectivement le commerce intra-national et le commerce bilatéral entre les pays i et j. Le paramètre représente l’élasticité de substitution intra-sectorielle. Source : Arvis et al. (2013). Tableau 1 : Liste des pays Reporteur Partenaires Mali Afrique du Sud, Algérie, Allemagne, Angola, Arabie Saoudite, Argentine, Australie, Autriche, Bahreïn, Bangladesh, Belgique, Benin, Botswana, Brésil, Bulgarie, Burkina Faso, Cameroun, Canada, Chine, Colombie, Corée du Sud, Côte d'Ivoire, Danemark, Egypte, Emirats Arabes Unis, Espagne, Etats Unis, Ethiopie, Finlande, France, Gabon, Gambie, Ghana, Grèce, Guatemala, Guinée, Guinée Equatoriale, Honduras, Hong Kong, Hongrie, Ile Maurice, Inde, Indonésie, Irlande, Islande, Israël, Italie, Japon, Kenya, Lettonie, Liban, Libéria, Lituanie, Madagascar, Malaisie, Maltes, Maroc, Mauritanie, Mexique, Niger, Nigéria, Norvège, Nouvelle Zélande, Ouganda, Pakistan, Pays Bas, Pérou, Philippines, Pologne, Portugal, République Centrafricaine, République démocratique du Congo, République du Congo, Iran, République Tchèque, Roumanie, Royaume Uni, Russie, Rwanda, Sénégal, Singapour, Slovénie, Sri Lanka, Suède, Suisse, Tanzanie, Tchad, Thaïlande, Togo, Tunisie, Turquie, Ukraine, Uruguay, Vietnam, Yémen 38 Tableau 2 : Les déterminants des coûts commerciaux du Mali (OLS) (1) (2) (3) (4) (5) Frontière commune -0.385*** -0.371** -0.378*** -0.386*** -0.358** (0.060) (0.144) (0.144) (0.144) (0.156) Colonisateur commun -0.000 -0.190 -0.174 -0.160 -0.169 (0.057) (0.124) (0.124) (0.124) (0.142) Distance 0.156*** 0.231*** 0.241*** 0.235*** 0.257*** (0.025) (0.056) (0.056) (0.055) (0.073) Langue officielle -0.137*** -0.087 -0.087 -0.082 0.037 (0.041) (0.089) (0.089) (0.088) (0.111) PIB partenaire -0.101*** -0.080*** -0.102*** -0.084*** -0.076** (0.009) (0.030) (0.024) (0.027) (0.033) Superficie 0.028*** 0.011 0.018 0.008 0.002 (0.007) (0.021) (0.019) (0.021) (0.024) Enclavement 0.198*** 0.147 0.153 0.166* 0.130 (0.044) (0.098) (0.098) (0.098) (0.117) UEMOA -0.616*** -0.443*** -0.480*** -0.494*** -0.501*** (0.061) (0.151) (0.148) (0.146) (0.159) Coût d'entrée 0.028 0.024 0.022 0.052 (0.043) (0.044) (0.043) (0.057) Technologie -0.912* (0.468) Connectivité aérienne -0.720* (0.381) Environnement douanier -0.955** -1.068** (0.428) (0.495) Taux de change -0.054 (0.037) Constante 6.676*** 6.489*** 6.727*** 6.621*** 6.518*** (0.267) (0.692) (0.729) (0.699) (0.799) Observations 986 185 185 185 154 R-squared 0.397 0.468 0.468 0.472 0.468 Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 39 Annexes - Chapter 4 A. Government Policies 1. The government is stimulating initiatives that it implemented prior to the 2012 political and social unrest such as Agence pour la Promotion des Exportations du Mali (APEX-Mali) to promote exports and the AGOA committee to increase exports to the United States. The Agence pour la Promotion de l'Investissement (Agency for the Promotion of Investment) is a one-stop shop for investors to facilitate business and investment procedures. The Ministry of Investment Promotion and Private Sector Initiatives is expanding its portfolio to attract investment and value added activities in agriculture and other sectors. Table A4.1 below outlines the main industrial policies that target increasing investments and upgrading in agriculture. Table A4.1. Industrial policies in Mali Policy Specific objectives Expected results 1. Develop a network Creating areas of competence in Create eight (8) areas of competence and of diversified and Mali investments (8 training and research-action centers) efficient agro-food Promote agro-food firms; Create Agro-food processing firms in sectors chosen units by Kayes (4), Koulikoro / Bamako (10), Sikasso (10), Ségou (5), Gao (3), Timbuktu 4), Kidal (2) Improve agribusinesses to Strengthen the managerial capacities of 20 agro- increase competitiveness food companies Increase the number of agro-food companies using the existing financing arrangements 2. Develop Strengthen agro-food 50 appropriate technology sheets are capitalized appropriate and technology training and and disseminated modern technologies research; Offer food technology modules in training centers for storage / Facilitate enterprise access to Strengthen the technical capacity of 10 conservation, modern storage and processing agribusinesses annually processing technologies Create a databank of techniques and technologies 3. Improve the Strengthen the operational Develop and adopt standards for 10 food products quality and capacities of quality control Deliver marketing authorizations for essential goods presentation of institutions; Strengthen the capacity of three laboratories and Malian agro-food Establish the quality approach in one quality assurance institution products to their agro-food units Implement a national traceability system improve Institute the quality approach in 100 agro-food units competitiveness with appropriate packaging and labels Strengthen the capacity of 100 agro food units in quality management 4. Develop markets Promote domestic consumption Increase the consumption of locally processed for agro-food of local processed products products by 100% products Promote access to sub regional, A database on sub regional and international manufactured in Mali regional and international markets is established and functional markets for Malian products Strengthen capacity of 20 agro-food units in exports Ten (10) Malian products have access to organic / fair-trade markets 5. Strengthen the Improve the performance of Improve the capacity of ten local organizations and agro-food sector actors in the agro-food sector an umbrella organization Source: Rural 2001, Republique Du Mali 2006, Minister de L'Industrie 2011, Mali 2013, Nhliziyo 2015 . 40 2. There are four policy frameworks that guide the agricultural development in Mali (Rural 2001, Republique Du Mali 2006, Minister de L'Industrie 2011, Mali 2013, Nhliziyo 2015, USAID 2015) (Table A4.2): • The Cadre Stratégique pour la Croissance et la Réduction de la Pauvreté (CSCRP). • The Loi d’Orientation Agricole (LOA): encourages the improvement of sector competitiveness, supports the increase of exports, reinforces the importance of food security and sovereignty. • The Stratégie Nationale de Sécurité Alimentaire (SNSA) addresses food crises. • The Plan National d’Investissement du Secteur Agricole (PNISA) with an interim 5-year CAADP priority investment plan, the Plan National d’Investissement Prioritaire dans le Secteur Agricole (PNIP-SA) in 2010 to improve investments in five value chains: rice, maize, millet and sorghum, inland fisheries, and livestock products (both meat and dairy) while strengthening nutrition education throughout the country. Table A4.2. Key agricultural policies in Mali Capacity Policy Production Trade Environment Social Focus Building SRA Access to input Marketing Envirionmental Technical Food security CSCRP Access to finance of rural Protection supervision Land tenure products LOA Increased production and Increase forest Structuring of Food agricultural productivity cover, the agricultural sovereignty biodiversity organizations Focus on export crops & local inputs Reduce Education and Regulation of manufacturing desertification agricultural food imports & training exports Improve product quality Water resources Promotion of Rural & managament research and climate risk extension management services & job creation SDDR Animal health and Regional Water, irrigation Strengthening Food security breeding economic & soil fertility private / public Inclusion of integration management roles in cotton women, youth, Development of Strengthening marginalized fisheries agriculture groups Improved seeds, Chambers, access to inputs & research, credit extension & Diversification fruit, insitutional vegetable sectors environment Intensification of strategic sectors- focus on rice, wheat and maize Hydro-agricultural infrastructures PDA Increase investment Product Environmental Agricultural Food security & market information competitiveness preservation research and for all Access to fertilizer in 41 Capacity Policy Production Trade Environment Social Focus Building international extension & domestic training of markets stakeholders Source: Rural 2001, Republique Du Mali 2006, Minister de L'Industrie 2011, Mali 2013, Nhliziyo 2015, L'Agriculture 2016. 3. Approximately 70 percent of expenditure for agriculture comes from foreign assistance funds in Mali (USAID 2015, World Economic Forum 2017).The GOM prioritizes increasing grain production by 30 percent by 2014 to address chronic food insecurity and reduce grain imports (FAO 2015). The state introduced the Rice Initiative in 2008, which later expanded to include wheat, maize, sorghum, cotton, millet and cowpeas. The initiative seeks to increase the production of staples, establish producer prices market prices, reduce imports and address food security needs. To support it the GOM increased input subsidies for agriculture from FCFA 13.6 billion in 2009 to FCFA 31 billion in 2012 (Nhliziyo 2015, L'Agriculture 2016). The government focused on irrigation facilities in the Niger Delta in 2010 for 11,882 ha of lowland and 965 ha of floodplain (Sangho, Patrick Labaste et al. 2010, USAID 2015, ADB 2017). Policy efforts also include the decentralization and privatization of services and the privatization of CMDT, the national cotton company, which the GOM completed by 2007. Cotton continues to be the leading agricultural crop with investment more than doubled between 2009 and 2010 to 26,444 billion FCFA (OECD 2011). The state subsidizes the "diversification crops" to assist cotton producers. The subsidy initially benefited sesame production, which cotton smallholders are adopting because of the cotton commodity crisis. Competition between sesame and cotton production later resulted in the removal of the subsidies. Both sesame and cashew production are not receiving any subsidies or state support according to the key players. Stakeholders in both the sesame and cashew value chain believe crop diversification policies are undermined by the emphasis on cotton support and cultivation. The central government finances the procurement of some inputs (especially cash crops), the determination of the overall agricultural policy, and limited research. The public sector does not play any substantial part in supplying loans, inputs and irrigation to smallholders. The private sector, producer organizations and nongovernmental organizations (NGOs) provide access to credit, training, extension and irrigation. Figure A4.1 provides a summary of policy priorities in Mali. 42 Figure A4.1. Mali key policies timeline Source: Rural 2001, Republique Du Mali 2006, Minister de L'Industrie 2011, Mali 2013, Nhliziyo 2015, USAID 2015, L'Agriculture 2016. 4. The Ministry of Commerce (National Directorate for Trade and Competition) is developing a strategy to increase the share of the sector from 1 to 2 percent of national production in 10 years (Table A4.3). Table A4.3. The Government of Mali sesame seed sector priorities Sesame Projected Results Initiative 1. Organize the R1.1. SMEs created from Income Generating Activities, at different levels of the sector chain and make R.1.2. A national association/interprofession is created it operational R.1.3. PPPs between the State, value chain actors and international trade organizations R.1.4. The structure to represent the State within the partnership is clearly defined 2. Increase the R2.1. Sustainability of ecosystems is ensured productive R2.2. Existing potential is protected and strengthened potential of R2.3. Increased production and productivity sesame R2.4. The conditions for the sustainability of the sector are met 3. Develop R3.1. Techniques and equipment of the value chain are modernized production and R3.2. The conditions for transport, storage and delivery of products are improved financing skills R3.3. A more professional and reliable logistics system is developed 4. Promote R4.1. The technical knowledge of the sector's professionals is developed Product Quality R4.2. The value chain incorporates quality packaging R4.3. Product quality is improved at each stage of the value chain R4.4. Malian products are protected from crop loss and low quality R4.5. A Malian public body for quality control and certification is accredited by the West African Economic and Monetary Union R4.6. The traceability process is well integrated 43 Sesame Projected Results Initiative R4.7. Organic products are put on the market R.4.8. Malian operators meet the quality requirements of international buyers R.4.9. The quality of the Malian product is recognized on the international market 5. Increase R.5.1. The technical capacities of the players in the sector are strengthened access of Malian R.5.2. The product offering in the country is regulated by the purchasing counter products to R.5.3. Export procedures are simplified international R.5.4. The organic quality of Malian products placed on the market is certified by an markets accredited Malian administration R.5.5. Producer price stability is ensured R.5.6. 2-3 Malian embassy services identified as promotion centers for sesame products R.5.7. Productivity gains at the regional and international levels R.5.8. The cash position of companies in the sector is surplus Source: Rural 2001, Republique Du Mali 2006, Minister de L'Industrie 2011, Mali 2013, Nhliziyo 2015, L'Agriculture 2016. Box A4.1. Natio-Cajou In 2007, Mrs. Sanogo Namarou Coulibaly established Natio-Cajou to process cashew nuts that grow on her family’s 16 hectares plantation. She is also the President of the Association of Processors of Cashew Nuts and vice-president of the Professional Association of Rural Women in the Sikasso Region. The processing facility has about 21 employees in the Sikasso region. About 75 percent of their operations focuses on cashew nut processing into 21 products such as savory and sweet cashews and jams. Natio-Cajou also processes other products such as cereals and fruits. They market their products domestically and export about 17 tons per quarter to several country including Burkina Faso, Morocco, Spain and France. Availability of cashew nuts is currently one of the major constraint that processors face in growing their business. Natio-Cajou received support from various development programs including ANPE, PCDA, SNV, PACEPEP and the Ministry for the Promotion of Woman, Child and Family (Diabate 2015). B. Best Practice Country Cases 5. In this section, we examine four African countries that entered the sesame seed and cashew nuts’ value chains, are lead producers and exporters and are upgrading into the primary processing. In the sesame seeds sector, we examine Ethiopia, Tanzania, Mozambique and Cote d’Ivoire in the cashew nuts sectors. All four countries emerged from difficult civil and political strife. They are focusing on reform, private sector development, and strategic investments to develop agro food processing and attracting foreign direct investments to diversify into high value exports and develop their local markets. The Chinese market is the primary destination for Ethiopian and Tanzanian sesame exports at about 68 and 83 percent respectively of the total value of sesame seed exports. On the other hand, India is the top destination for cashews from Mozambique and Cote d’Ivoire at about 53 and 83 percent respectively of the total value of RCN exports. The key indicators of these countries compared to Mali, indicate a high agricultural value added which implies that agricultural diversification needs to be a priority (Table A4.4). The following is a discussion of Ethiopia and Tanzania’s upgrading in the sesame value chain and Mozambique and Cote d'Ivoire’s upgrading in cashew nuts. 44 Table A4.4. Key country 2015 indicators Cote Indicator Mali Ethiopia Tanzania Mozambique d'Ivoire GDP (constant 2010 USM$) $12,686 $48,667 $43,728 $14,307 $34,063 GDP growth (annual %) 6% 10% 7 7% 9% GDP per capita (constant 2010 $726 $487 $836 $511 $1,474 US$) GDP per capita growth (annual %) 3% 8% 4% 4% 6% Population (Millions, total) 17.5 99.9 53.9 28.0 23.1 Access electricity (% population) 27% 27% 16% 21% 62% 2014 Agriculture, value added (% of 41% 39% 31% 25% 22% GDP) Agricult. value added (annual 7% 6% 2% 3% 3% growth) Cost of start-up firm (% GNI per 71.3% 79.1% 23.2% 15.1% 18.6% capita) Domestic credit financ. sector (% 25% .. 22% 43% 31% GDP) Ease of doing business index 143 159 144 134 139 (1=most business-friendly regulations) Exports of goods & services (% of 22% 9% 22% 32% 38% GDP) Food (% of merchandise exports) .. 72% 54% 20% 69% FDI, net inflows (% of GDP) 1% 3% 4% 26% 1% Industry value added (% of GDP) 19% 18% 26% 22% 32% Industry value added (annual % -1% 20% 11% 12% 14% growth) Manufacturing, value added (% of .. 5% 6% 10% 14% GDP) Services, etc., value added (% of 40% 43% 43% 53% 46% GDP) Source: World Bank 2017. Ethiopia 6. Ethiopia is one of Africa’s fastest growing economies. The oilseed sector in Ethiopia is one of the leading agricultural subsectors in the country, both in terms of its foreign exchange earnings and employment. Sesame is among the most important oilseed cash crops for export markets. Between 2006 and 2012, its production increased from 149 to 181 thousand tons and value increased from under USD800 per ton in 2005 to over USD 2,000 per ton in 2014 (see Figures A4.2 and A4.3) (Central Statistical Agency 2010). The major sesame producing regions in Ethiopia are Tigray, Amhara, Oromia and Benishangul Gumuz, accounting for over 90 percent of total sesame output. Amhara is the largest producer at about 48.5 percent of production and Tigray is the second largest at 28.5 percent in 2007/08. In 2015, Ethiopia’s exports reached 288,356 tons and exceeded USD 403 million in revenues making it the second largest exporter after India. China imports over 60 percent of Ethiopia’s sesame. 45 Figure A4.2. Production, area harvested, and yield Production and Area Harvested Ethiopia's production, Area Harvested and Yield 2004-2014 500,000.00 1.2 400,000.00 1 0.8 300,000.00 Yield 0.6 200,000.00 0.4 100,000.00 0.2 - 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Production in tons Area harvested Yield ton/ha Source: FAO 2017. Figure A4.3. Ethiopia’s production and unit price Ethiopia's Sesame Prodction Value 2005-2016 700,000 $2,500 Production Value Unit Vlaue USD/Ton 600,000 $2,000 500,000 400,000 $1,500 300,000 $1,000 200,000 $500 100,000 0 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Production value in thousand dollars Unit value in dollar /ton Source: FAO 2017. 7. Ethiopia is making significant progress in the public policy sphere to advance its agricultural sector. The Growth and Transformation Plan (GTP) (201/11- 2014/15) seeks to consolidate the gains from the Plan for Accelerated and Sustained Development to End Poverty PASDEP (PASDEP), which targeted double-digit growth between 2005/2006- 2009/2010 (Bank 2012). The GTP emphasizes the development of other sectors in addition to agriculture to support the country’s strategic growth in agri-processing and higher value agricultural segments. Table A4.5 below summarizes the GTP policy priorities. 46 Table A4.5. Policy framework in Ethiopia Value Chain Target : Policy/ Initiative Description Increase the value of the agricultural sector, processing and exports Growth and Building on GTP I, GTP II aims to - Agriculture improvement Transformation Plan transform Ethiopia into an - Rural infrastructural development (GTP)17 industrialized middle-income - Institutional development of cooperatives country by 2025 by: - Access to rural credit and financial - Maintaining an annual average real institutions GDP growth rate of at least 11%; - Agro-processing development - - Rapid industrialization and structural Development of export oriented transformation; and manufacturing industries - A stable macroeconomic framework - Institutional and human capacity and climate resilient green economy. development. GTP Agricultural Achieve food and nutrition security - Increase production and productivity Component and build resilience by: - Develop market oriented high value crops - Improving sustainable agricultural - Transform smallholders into commercially production, productivity and oriented producers commercialization - Reduce vulnerability to disasters GTP Infrastructure - Enhancing Expansion and Quality of- Expand and maintain infrastructure such as Component Infrastructure Development roads, power, water supply GTP Institutional - Build the Capacity of Government - Improve service delivery Component Institutions - Enhance implementing capacities - Improve working systems and procedures GTP Micro and Small - Expand the quantity and quality of - Provide comprehensive support to micro Enterprise Component micro and small scale enterprises and small scale enterprises - Provide training for 10.000 trainers. - Capacity building for about 3 million entrepreneurs and provide office space, micro credit and marketing information Source: Authors based on AFDB 2015. 8. International development programs are supporting production and upgrading in the sesame value chain in Ethiopia. These programs develop the capacity of producers, cooperatives and promote investments. The USAID Agricultural Growth Program – Agribusiness and Market Development (AGP- AMDe), targets six value chains: chickpeas, coffee, honey, maize, sesame and wheat. All value chains have the potential to improve both food security and farmer incomes. AGP-AMDe’s activities seek to: • Strengthen the competitiveness of the selected value chains 47 • Increase access to finance, thereby encouraging investment, productivity and trade • Improve the enabling environment, working closely with the Ethiopian government • Expand public-private partnership investments to buy down risks and leverage the impact of innovations coming from the Innovation & Demonstration Fund, a cost-share grant program. 9. SNV Ethiopia, in partnership with Agriterra, is implementing the Cooperatives for Change (C4C) program, which builds the capacity of cooperative unions and their members in marketing, management and access to markets. The program is establishing pilot business arrangements with buyers and service providers to increase inputs, technologies and other services to meet the market requirements (Boere, Rutgers et al. 2015). 10. The establishment of the Agricultural Transformation Agency (ATA) in 2010 to support change in the agriculture sector. The Ethiopian prime minister chairs the Agricultural Transformation Council, which seeks to increase trade and upgrading into primary processing (cleaning). The Agency’s mission is to introduce new technologies and approaches that address systemic bottlenecks, facilitate the execution of policy priorities and catalyze the transformation of the sector. The ATA is adopting an Asian development approach and implementing
a “Transformation Agenda” to the practical realities of Ethiopia’s current agricultural system (ATA 2017). 11. Investments in Ethiopia’s sesame is a game changer to upgrading into processing and improving standards. Olam is one of the largest buyers of Ethiopian coffee and sesame. The company is expanding its operations in coffee and sesame supply chains and is importing key commodities such as fertilizer and wheat to Ethiopia. The company’s forward integration strategies in Ethiopia will lead to improving farmers’ crop yields, quality, management and crop traceability (Olam 2017). In 2014, Wilmar, the Asian agribusiness group, entered into a joint investment agreement with Repi Soap and Detergent S. Company.18 Wilmar will upgrade an existing manufacturing facility and build a new integrated manufacturing complex. The facility will house an edible oil refinery and packing plant, production plants for specialty fats, soft oils, soaps, detergents and a sesame seed processing facility (Wilmar 2014). Ethiopia is also home to East Africa Holdings, Ltd., which is a lead domestic and regional player in foodstuffs, cosmetics, soaps, and detergents. The company uses sesame seeds as an input to its operations and recently acquired Hamaressa Edible Oil Factory, the largest state-owned edible oil factory (East African Holding S.Co. 2017). Additionally, in 2015, the Impact Angel Network (IAN) and other US based investors started investing into a sesame company in Addis Ababa. The company will support more than 10,000 small farmers, strengthen the sesame industry in Ethiopia, generate $32 million in export sales and create more than 60 jobs in the manufacturing sector (O'Connor 2017). These activities by lead firms are a clear indicator that Ethiopia is starting to upgrade into the processing segments of sesame seeds. 12. Developing cooperatives to improve farmers’ performance and access to markets. Agricultural cooperatives play a key role in increasing smallholder farmers’ yields and income through commercialization of agriculture. The Ethiopian government emphasizes the role of co-operatives as one of the main organizational vehicles for enhancing food security, reducing rural poverty and improving export oriented crops. Box A4.2 summarizes the capacity building priorities for cooperatives in the sesame sector. 18Wilmar International Limited, founded in 1991 and headquartered in Singapore Wilmar’s business activities include oil palm cultivation, oilseed crushing, edible oils refining, sugar milling and refining, specialty fats, oleo-chemical, biodiesel and fertilizer manufacturing and grain processing. 48 Box A4.2. Capacity building priorities of Ethiopian cooperatives Capacity building of cooperatives with financial and technical support to increase export volume is one of the strategic interventions to increase the participation of farmers’ primary cooperatives and unions in sesame marketing. The strategy focuses on: Enhance the timely repayment capacity of unions - Encourage unions to establish rural savings and credit cooperatives - Provide technical support to primary cooperatives and unions in aggregation, marketing and financial management, - Link with reliable demand sinks to reduce risk - Perform related quality control and build storage and cleaning facilities that meet higher value market requirements. Source: ATA 2015 13. The Ethiopian Commodity Exchange (ECX) is a game changer. The ECX accelerates the flow of market information in agricultural commodities and reduces payment delays to sesame and coffee farmers (Bank 2012). Improving access to commodity market information is reducing underpricing of sesame in local markets, increasing the Ethiopian sesame price and improving chain transparency (AFP 2013). The ECX encompasses Warehouse Receipt Financing program, which connects farmers to commercial banks to provide farmers with collateral information to increase their access to finance (Bank 2012). Tanzania 14. Tanzania is the largest sesame seed producers in Southern and Eastern Africa. Tanzania is the fifth largest sesame exporter of the world with more than 5 percent of the total world export value in 2016. Oilseeds are the largest cash crop with 35 percent of sunflower, 25 percent of groundnut, 19 percent of cottonseed and 13 percent of sesame seeds. In 2014, Tanzanian farmers’ harvested 928,243.00 hectares with a yield of about 1.22 tons per hectare (Figure A4.4). Almost 4 million farmers are involved in growing oilseeds in Tanzania (FAO 2017). The country is developing sesame production and exports and is starting to upgrade into processing by using a number of policy instruments, international development support, the creation of the Tanzania Trade Development Authority (TanTrade) and lead multinational firms’ investment in Tanzanian agriculture. Raw sesame seed exporters dominate the Tanzanian sesame value chain. There are currently more than 100 licensed exporters and only a few small-scale sesame oil processors such as Frasal InterTrade Co. Ltd (FITCOL). The sector faces a number of challenges such as low yields, processing constraints and infrastructure deficit but the country continues to be the lead producer in sesame in Africa. Figure A4.4. Tanzania’s sesame seeds, area harvested, production, and yield Tanzania's Area Harvested, Production and Yield 2004-2014 1,200,000 1.5 1,000,000 Production 800,000 1 Yield 600,000 400,000 0.5 200,000 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Area Harvested in Ha Production in tons Yield Ton/ Ha Source: FAO 2017. 49 15. Policy support is instrumental in improving production. The government is developing the agriculture sector using a number of policy instrument (Table A4.6). These programs are supporting sesame production and upgrading into processing. These initiatives are benefiting cashew production in Tanzania. Table A4.6. Policy framework in Tanzania Policy/ Initiatives Description Value Chain Targets Agriculture - Facilitates the formation of traders’ associations - Improves organization of Development Policy of - Provides quality control services and an actors in the chain Tanzania information system to link producers and traders - Improves production quality - Strengthens research and extension services and yields - Develops agricultural trading linkages Comprehensive Africa - Provides strategies to identify investment - Value chain development to Agriculture opportunities facilitate upgrading Development Program - Supports agricultural reform, sets a six percent (CAADP) annual growth target in agricultural GDP, and allocates at least 10 percent of public expenditures to agriculture The Southern - Multi-stakeholder partnership to develop the - Better coordination among Agricultural Growth region’s agricultural potential. It includes: stakeholders Corridor of Tanzania farmers, agri-business, the Government of - Increases FDI flows and (SAGCOT) Tanzania and companies from across the private private sector development sector Kilimo Kwanza Resolve - Addresses sectoral challenges - Upgrading in the chain by and Agricultural policy - Modernizes and commercializes agriculture developing quality and capacity Tanzania National - Public/private dialogue on strategic issues for the - Better coordination among Business Council economic development of Tanzania stakeholders (TNBC) - Increases FDI flows National Agriculture - Provides a 50% input subsidy to small holders - Improves affordability of Input Voucher Program producing rice and maize. Program benefits agricultural inputs (NAIVS) sesame and other crops - Increases yields and quality of production Vocational Education - Increases extension services for small holders - Capacity building of Training Authority producing maize, rice and cash crops producers (VETA) Naliendele Agricultural - Develops and propagates new sesame seed - Improves seeds, yields and Institute (NARI) varieties with the support of the Ministry of quality of production Agriculture Source: MAFAP 2013, SAGCOT 2017, UN Office of the Special Adviser on Africa 2017. 16. International development projects are supporting production and upgrading in the sesame value chain. These programs are instrumental in improving coordination among stakeholders and increasing production. The Netherlands Development Organization (SNV) targets commercially viable and proper value chain development in sunflower and sesame by: • Guiding district and national level policy development and public services; • Promoting inclusive business arrangements between small producers and the processing industry through up-scaling contract farming arrangements and impact investments; and 50 • Facilitating knowledge development of the sesame supply chain in Tanzania, fair trade certification, and developed the “Good Farming Practices for Sunflower and Sesame” handbook in collaboration with IFAD (Schulz and Mbuvi 2010). 17. The Agribusiness Innovation Center is a World Bank and International Finance Corporation initiative is pursuing upgrading and scaling innovation in agriculture. The program is a public private partnership and has a strategy to develop oilseed processing in Tanzania (Box A4.3). Box A4.3. Agribusiness innovation center enhancing capacity in oilseeds processing A four-year, graduated support model for oilseed processors with an initial processing capability of at least600 liters per day. These will be supported in Year 1 to increase their outputs to 1,000liters per day. In Year 2, processors would expand output to 1,500 liters per day, in Year 3 to 2,500 liters per day and then to 4,000 liters per day in Year 4. Processors would graduate once they reach this production level, which is a suitable base from which to leapfrog to the intended 8,000 to 20,000 liter-per-day level. Source: InfoDev 2012. 18. The establishment of the Tanzania Trade Development Authority (TanTrade) in 2009 and the Tanzania Mercantile Exchange are Tanzania’s game changers to increasing trade and upgrading. Sesame seeds oil extraction exceeded 500,000 tons in 2014 compared to less than 100, 000 tons in 2012 (Schulz and Mbuvi 2010). TanTrade advises the Government on matters relating to the formulation, development, supervision and implementation of trade policies and strategies. The organization is also collaborating with private sector actors to improve trade, collect data, address bottlenecks and direct investments towards value addition (TanTrade 2017). Trading in sesame seeds exports increased from USD 70 million in 2010 to USD 165 million in 2015 and sesame seeds oil export from 11 million US dollars in 2010 to more than 200 million US dollars in 2015 (Figures A4.5 and A4.6). Tanzania is also in the process of establishing the Tanzania Mercantile Exchange (TME). The exchange will be trading in coffee, sesame seeds, cashews, rice, sunflower and maize. TME will be using floor and electronic based training and is planning to be a regional trading hub for commodities. The government expects that the exchange will help farmers obtain better prices in international markets and increases commodity trading. Figure A4.5. Tanzania’s sesame oil production Tanzania's Sesame Seeds Oil Production 2004-2014 600000 500000 400000 300000 200000 100000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sesame oil in tons Source: FAO 2017. 51 Figure A4.6. Tanzania's sesame seeds and oil exports value Tanzania's Sesame Seeds and Oil Export Value 2007-2015 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sesame seeds value in (000) Sesame seeds oil value in (000) Source: ITC 2017. 19. The presence of lead firms in Tanzania is a game changer to upgrading into processing and improving standards. Olam is the global leader in sesame and edible nuts and works with farmers in Africa to improve production and processing. Olam established its operations in Tanzania in 1994. The company has 122 permanent staff and over 2,000 seasonal employees spread across 15 out of the 22 regions. The Singaporean multinational trading house and processor manages an integrated supply chain for 4 key products, cotton, sesame, cocoa, and green coffee in Tanzania. In 2011, Olam Tanzania established its subsidiary AVIV Tanzania to grow world class Arabica coffee by implementing environmental and social standards. Olam has sesame primary processing facilities to clean, sort and grade sesame at the farm gate (Olam 2017). Tata Africa Holdings (Tanzania) Ltd is sourcing from Tanzania to export to countries including India, China, Myanmar and certain European countries. The company is setting up cleaning and processing units in Tanzania. Tata is planning to work with farmers directly instead of crop aggregators (Business Line 2015). Export Trading Co. Ltd. (ETG) is also a lead player in African sesame processing and is based in Tanzania. The company has processing facilities in several countries including Mozambique and Malawi. ETG operates in commercial farming, procurement, trading, and processing of cereals, pulses, and oilseeds primarily in Europe, the Americas, and Asia. The company is active in agro-commodities in grains; oilseeds, such as soybeans and sesame; edible nuts and spices, including cashew nuts and groundnuts; sugar; coffee and tea; fertilizers; and rice. ETG exports hulled and edible grade sesame to Japan, China, the Middle East and Turkey. The organization has a traceability system that tracks seeds from farm production to consumption. ETG supplies oil crushers, tahini and halawa (halva) producers, sweet manufacturers, bread factories and other bakery industries (ETG 2017). Mozambique 20. Mozambique is the largest raw cashew producer in Eastern and Southern Africa after Tanzania. More than 40% of Mozambican farmers - over one million households - grow and sell cashew. The processing sector provides formal employment to more than 8,000 individuals (MozaCajú 2017). Mozambique has about 20 processing plants, which are mostly in the northern provinces of Nampula and Cabo Delgado. The plants are employing around 11,000 workers and have a processing capacity of about 45,000 tons. These plants are operating at around 44 percent of their capacity, which is less than a third of the country’s production. Cashew processors are targeting a 66% increase (ITC 2015). 21. Policy failures and instability reduced cashew production and halted processing. Mozambique became a major cashew nut producer in the 1960s. By the 1970s, cashew nut production started increasing from large farms owned by Portuguese investors. However, policy failures reduced the competiveness of 52 cashew nuts and declined production. Just after independence, Mozambique’s government nationalized all cashew plantations and factories, taking away ownership rights from Portuguese nationals in the sector. Soon, all Portuguese owners and managers abandoned the sector. Social and political Instability including the Mozambique’s civil war reduced the country’s raw cashew production from 156,000 tons in 1964 to 33,423 tons in 1995 (The African Centre for Biodiversity 2015)(Figure A4.7). Figure A4.7. Mozambique’s cashew production Mozambique's Raw Cashew Nuts Production (tons) 200000 150000 100000 50000 0 1961 1962 1963 1964 1981 1995 1996 1997 Source: FAO 2017. 22. The government attempted to revive the sector by banning raw cashew nut exports, encouraging farmers to increase production and boost domestic processing. The policy enabled the revival of the sector and Mozambique became the first African country to process cashews on a large scale. By 1995, the country had 14 processing factories (McMillan, Dani Rodrik et al. 2002). However, the structural adjustment program replaced the export ban with a quota system and export taxes that were eliminated later. Mozambique’s cashew sector could not compete under these policies and all processing centers and factories closed their doors, resulting in a loss of 10,000 jobs (Correia 2015, The Business Year 2016). The government of Mozambique adopted a new policy that called for the participation of all stakeholders, including private sector, communities and NGOs. 23. The government’s Institute for the Promotion of Cashew (INCAJU) works on reviving Mozambique’s legacy in cashew production and processing. INCAJU developed an integrated plan, with a goal to stimulate activities in three interlinked areas: production, processing and commercialization: • For production: providing subsidies to farmers, implementation and coordination of chemical treatment of trees against powdery mildew disease; new plantations; nurseries for new and improved varieties; extension work including cultivation techniques, pruning and research; • For processing: stimulating new small-scale factories by providing guarantees for loans to the private sector, since they produce better quality output; • For commercialization: setting the export tax of raw cashew between 18-22% and creating a system to grade the quality of nuts (Correia 2015, The African Centre for Biodiversity 2015). 24. International development assistance programs are improving the quality and production in the last few years. TechnoServe, USDA, Swiss State Secretariat for Economic Affairs (SECO), and other actors are creating a different business and quality model for cashew production and processing (Correia 2015, The African Centre for Biodiversity 2015). These organizations focus on the capacity building of small processor, the benchmarking Mozambique’s cashews and the adoption of standards. 53 Figure A4.8. Cashew production in Mozambique Mozambique's Prouduction of Raw and Processed Cashew Nuts (tons) 140000 3500 120000 3000 100000 2500 80000 2000 60000 1500 40000 1000 20000 500 0 0 2001 2002 2003 2004 2005 2006 2007 2009 2011 2012 2013 2014 Cashew production RCN exported Processed Cashew Source: FAO 2017. 25. Investment by lead firms and the United States Department of Agriculture (USDA) are game changers in upgrading processing and improving standards. Olam established its operations in Mozambique in 1999, handling cashew procurement in the country’s Northern province of Nampula. Olam has 850 permanent staff, and over 3,500 seasonal workers located on 23 sites. In Nampula alone, the company has 4,000 employees in cashew process operations with 90% women (Olam 2017). In 2011, an American investor in Mozambique’s cashews established the Sunshine Nut Company. The Sunshine’s is a social enterprise that works with smallholder farmers in Mozambique to transform their cashews into premium products. The company offers farmers fair prices, gives about 30 percent of its profits to social causes, 30 percent for agricultural development and another 30 percent for processing. Sunshine offers its cashews at about eighty retailers in the United States including Whole Foods (The Sunshine Nut Company 2017). MozaCajú is the USDA-funded initiative that is improving cashew production and processing. The three-year project provides technical assistance to farmers and factories to meet international standards. MozaCaju provides agricultural extension, nursery development, and demonstration plots and ensures the inclusion of female farmers. The project is working with processing facilities to improve their business plans, implement effective traceability systems, and meet the standards of international buyers. MozaCajú is using mobile technology to provide single origin traceability and works with processors on HACCP, BRC Food Safety and organic certifications (MozaCajú 2017). 26. Developing the capacity of small-scale processors and entrepreneurs is Mozambique’s game changer. The cashew sector started showing signs of recovery by implementing a strategy that focus on entrepreneurs and production and processing standards (Figure A4.8). The strategy concentrated on developing small scale, semi mechanized processing centers, building their management, quality and processing skills and implementing traceability and certifications. By 2008, nine new processing plants generated an operating profit of USD 1.3 million from processed cashew exports valued at USD 15,171,176 (Correia 2015, The African Centre for Biodiversity 2015, The Business Year 2016). More than 5,000 new jobs are created with about one million households in cashew production and processing are increasing their incomes (Correia 2015, Mishara and Martin 2016, MozaCajú 2017). By 2015, processed cashew exports had reached USD 23.6 million in value, with the US as the fastest growing destination market. The improvement of the cashew sector in Mozambique is the result of the involvement of all stakeholders under the leadership of the private sector as implementer. 54 Côte d'Ivoire 27. Republic of Côte d'Ivoire is one of the largest raw cashew nuts producers in the world with more than 723 million US dollars exported in 2015. The raw cashew nuts sector became the third largest commodity export in Côte d'Ivoire after cocoa beans and refined petroleum (Figure A4.9) (UN Comtrade 2017). The FAO estimates that Côte d'Ivoire production reached close to half million tons in 2014 and will continue to grow the next decade (Figure A4.10). Value chain drivers that are increasing production include: growth in international demand, the geographic position of the country, the importance of cashews in poverty reduction in the northern parts of Cote d’Ivoire and the government’s reforms. Figure A4.9. Côte d'Ivoire’s raw cashew nuts and processed cashews Côte d'Ivoire's Raw Cashew Nuts Production and Exports and Shelled Cashews' Exports (tons) Raw Cashew Production and Exports Shelled Cashews' Exports 600,000.00 7000 500,000.00 6000 5000 400,000.00 4000 300,000.00 3000 200,000.00 2000 100,000.00 1000 - 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Production Raw nuts exported Shelled dried nuts Source: ITC 2017, FAO 2017. Figure A4.10. Côte d'Ivoire’s raw cashew nuts production, area harvested. and yield Côte d'Ivoire's Raw Cashew Nuts Production, Area Harvested and Yield 2004-2014 1600000 0.41 Production and area harvested 1400000 0.4 1200000 0.39 0.38 Yield 1000000 0.37 800000 0.36 600000 0.35 400000 0.34 200000 0.33 0 0.32 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Production in tons Area harvested in ha Yeild ton/ha Source: FAO 2017. 28. According to the Ministry of Agriculture, “the turnover of all of the cashew sector has increased from 200 billion CFA francs in 2013 t0 337,000,000,000 CFA francs in 2015 (514 million euros), an increase of 68.5%” (Mieu 2016). India is the primary export destination for Ivorian raw cashew nuts, followed by Vietnam and Brazil. More than 1.5 million persons, mostly small-scale farmers in the north, rely heavily on 55 the sector for employment and livelihood. Côte d'Ivoire entered the value chain in the early 2000s by increasing production and exports. The country is now upgrading into the processing segment by leveraging its experience in agro commodities such as cocoa and the growing presence of global lead firms in the country (see Box A4.4). Cote d’Ivoire’s success in the cashew nut sector is due to developing strategic policies that target upgrading in agriculture and attracting investments by Singaporean firms in agriculture. Box A4.4. Startups in Côte d'Ivoire The number of business startups and private investments continued to increase. As of June 2014, a total of 3,085 businesses had been created, up 161 percent over 2013. After the African Development Bank (AfDB) returned its headquarters to Abidjan in 2014, major businesses became more interested in establishing regional offices in Abidjan. Examples of this include France’s Cemoi chocolate plant, German’s second largest bank, Commerzbank, and the French retail chain Carrefour. Additionally, e-commerce is now beginning. In 2015, Côte d’Ivoire re -launched its International Agriculture and Livestock Exhibition to promote sustainable agriculture and attract foreign investors in this important sector. Source: US Dept. of State 2015. 29. Creating the Cotton and Cashew Council (CCA) to develop the cotton and cashew sectors is a game changer in Côte d'Ivoire. From 1999–2008, the government developed several private and public institutions with producer, industry, and government representation to better control and regulate the cocoa, coffee, cotton, and cashew sectors. However, the groups were not efficient, not transparent and mismanaged. In November 2011, the government approved a cocoa reform plan with a new regulatory and legal framework and a new marketing mechanism. The government established the Cocoa and Coffee Council as a single regulatory and stabilization institution to manage the industry. Similarly, in 2013, the government created a Cotton and Cashew Council as a single regulatory board to better develop these two commodities and to provide increased revenues for the farmers (U.S. Department of State 2015). The council is responsible for improving the production and quality of the cashew nut, developing minimum market/producers prices, improving the transparency and reliability of the marketing system by licensing operators, traders and other stakeholders, increasing value addition by processing and improving the living conditions of the producers. The council is now implementing a new transaction tracking system that requires storage and allotment receipts and is collaborating with the private sector to increase processing (see Box A4.5) (African Cashew Alliance 2014). Box A4.5. CCA Industrializing the cashew nut sector To achieve a transformation rate of 35% in 2016, the government launched three major projects, all driven by the CCA. The first is the creation of an experimental unit processing 5000 t in Yamoussoukro, in partnership with the Vietnamese company Viet Mold Machine. The Institute National Polytechnique Felix Houphouet-Boigny (INPHB) in Yamoussoukro and the University of Ho Chi Minh City should provide assistance. The second project involves the creation of a bioplastics plant (made from cashew apple juice), whose production could reach 420 000 t per year. Feasibility studies are expected to start next year. On this project, the CCA can rely on the expertise of its partners, always INPHB but also the National Institute of Scientific Research of Canada. The latest initiative, conducted with the Israelis the agro-industrial group Mitrelli, includes the construction of twelve processing plants with a capacity of between 5000 and 15 000 tons per year. Source: Mieu 2016. 30. Olam, the global leader in edible nuts is Côte d'Ivoire’s game changer in cashew processing. Olam is the first leading multinational to start processing cashews in Ivory Coast. In the central city of Bouake, Olam’s plant employs more than 2,000 people with another 1,000 working at a second facility. The processing of the nuts is labor intensive creating more jobs as the country expands domestic cashew processing. The multinational expects other global firms to follow its footsteps, which will create more jobs in Cote d’Ivoire (Fick 2015). 56 31. The National Development Plan targets industrial upgrading and positions the country as an emerging economy. The National Development Plan is a USD 20 billion infrastructure development strategy with a goal to improve the power sector and add 150 megawatts to the grid every year until 2020. The government plans to increase the share of the industrial sector in the economy from 25 percent today to 40 percent by 2020 by attracting investments in five key sectors. These are: agribusiness, which includes palm oil, cashews, cotton, cocoa, rubber, fruits and vegetables; non-agricultural resources, which includes mining, oil and gas; the structured industries including metallurgy and steel, cement, chemicals; consumer products, such as textiles, packaging, drugs; and light industry, consisting of assembling and light equipment (U.S. Department of State 2015). C. Detailed Policy Recommendations 32. Pursuing agricultural diversification strategy requires developing structured approaches to growing new crop systems. Foregoing opportunities in new crops often leads to very costly economic, environmental, social and political outcomes. Perceptions of high-risk associated with new crops and or competing agricultural agendas are often a barrier to devoting a concerted effort to facilitate the development of new agricultural and food systems. Our value chain analysis of both the global and Malian sesame seeds and cashew nuts’ value chains revealed a number of structural challenges in Mali that go beyond these two crops and are relevant to the developing a medium-term approach that addresses new crops and their competitive positioning. To address these challenges, we propose an approach that focus on the institutional development that facilitates growth in value chains. Our recommendations focus developing and improving the intuitional environment, capacity development and enhancing trade transparency on five priority areas: (1) Making new crops a national priority (2) Developing a cooperative education system (3) Investing in agricultural research and international cooperation (4) Creating an agricultural regional innovation and production hub (5) Implementing agricultural trade tracking system 33. Establish a rural research, economic development and sustainability council (RESC). The council will be responsible for the following: • Develop the New and Alternative Crop Initiative to collect data, identify and prioritize new crops. The program will distinguish between three types of crops: existing crops for new markets; new crops for existing markets; and new crops for new markets with an emphasis on niche markets. New crops assessment will include: o Benefits of past/new crops developments o Costs and lost opportunities from new crops to meet farmers’ needs o Evidence of sufficiency or lack of materials, technologies, expertise, and financial resources to develop profitable new crops o Progress on new crop development in other countries o Economic, environmental, social and political impacts of the new crop development • Develop an agreed list of national priorities for globally competitive and sustainable new crops. 57 • Establish a performance, measurement and transparent reporting framework against a list of the national priorities and key performance indicators. To establish credibility in the measurement, a third party auditing group will do the reporting. • Provide advice on enhancing cross–sectoral, cross–disciplinary, cross–jurisdictional and international cooperation and collaboration • Provide advice on improving communication and implementation of new knowledge and technology across all rural industries • Foster innovation as integral to the culture of rural communities • Foster the building of capacity of the rural R&D to ensure that Mali is prepared for challenges to global competitiveness, productivity, adaptability and sustainable development into the future, including the challenges associated with climate change • Foster the building of capacity of the rural farm management, production and marketing to ensure that Mali is prepared for challenges to global competitiveness, productivity, adaptability and sustainable development into the future, including the challenges associated with climate change • Advise on any matters relating to rural R&D and new crop production 34. The advancement of agricultural cooperatives taskforce. The taskforce will work within the framework of RESC. The taskforce will be responsible for cooperative education to build the capacity of existing and new agricultural cooperatives in Mali. The taskforce will collaborate with international organization to provide training modules on the organizational development and structure of cooperatives, current situation in the sector, economic environment analysis and state regulation regimes along with other relevant topics. Organizational training will include professional structures and policies regarding board composition and member incentives, proportional voting rights, professional management, supervision by outsiders, and selection of directors based on expertise or product representation and not regional origin or political influence. 35. Develop a Center for Agricultural and Development Cooperation (CADC). The center will be jumpstarted with the financial and technical support of multilateral and bilateral international organizations, and leading organizations in agricultural innovation. The center will focus on a range of activities including food and farming research, production and food processing technologies, food marketing and food safety and sustainability. The center will start with a five-year new crop joint project to further develop high potential crops in Mali. The center will collaborate with private sector organizations and producers. 36. Develop a Regional Food Producer’s Innovation and Productivity Program (R-FIPP). A 5-year program to boost the productivity and competitiveness of regional crops through innovation, technology and entrepreneurship. This program will garner private sector support of regional and multinational companies that will participate on a matched-funding grants basis. The project will undertake: • Innovation redesign of existing production and processing to adapt them to conditions to Africa to improve efficiencies and productivity • Design and implement new technologies, production and processing techniques • The adoption of overseas technologies 58 • Design an innovation funding program that offers financial literacy to entrepreneurs, grant training and connect social impact funders with innovators 37. Develop a national agricultural trading accountability system. This system will include the development of a warehousing and storage system, which will be linked to the trading system using mobile technology. The goal of the trading system is to collect data on agricultural goods’ exports. All exports will have documentation that verifies crop type, quantity, seller and intermediate and final destination. Documentation stamps will be based on a coding system that will be changed annually to prevent duplication. This will be the first step to help show Mali’s role in these growing commodities. Upgrading Mali’s Sesame Value Chain 38. To address the challenges we discussed above we propose a process upgrading strategy in the short to medium term and product upgrading by developing the processing sector in the medium to long term. In the short term, the industry needs to build the value chain by developing the institutions and organizations that facilitate growth and upgrading. In the short to medium term, the industry needs to achieve consistent and larger production of required qualities to meet global demand. In the medium to long term, the industry needs to develop a resilient and a diverse processing sector within a more integrated and competitive value chain. Institutional Development – Short Term • Develop the oilseed sector strategy that takes into consideration the developments in global, regional and domestic food and feed sector. Developing an overall oilseed plan with sesame seed production as one of the priority subsectors is important to capitalize on current achievements in sesame while also building a general approach that addresses potential opportunities in other oilseeds. The oilseed sector is critical to reducing imports on edible oils, diversifying oilseed exports and capitalizing on growing domestic, regional and global demand. The priority of the oilseed strategy will be to identify ways that sesame seeds can grow and contribute to the oilseed sector in Mali. The sesame seed has potential to overcome some of the shortfalls that the country is facing in cottonseed and other oils, if production volumes are achieved. • Define Mali’s Sesame seed sector priorities and organizations. Mali is currently competing with large and emerging regional players in sesame seed markets. The country will need to increase its production and quality while also improving its processing. The goal of the plan is to improve the image, availability and position of Mali’s sesame seeds regionally and globally. The sesame seeds’ plan will need to include: o Specific sesame production volume and quality targets and yield improvements to be achieved in the next three years and in the next 5 years. o Specific quality requirements based on global buyers crop specifications. o Establish sesame seed quality certification schemes in collaboration with international organizations and a local institution. o Create a set of incentives and credit schemes that target improving grower capacity, innovation in processing, market and product development. These incentives and schemes will be delivered through organizations that will be created to represent the value chain participants and liaise between them and government organizations. o Create two organizations that represent the sector: 59 ▪ Sesame Seeds Council: Create the National Council for Sesame Seeds in Mali (NCSS). This will serve as public private partnership/ quasi-governmental body that is in charge of developing the sector, policy formulation, trade promotion, private sector development and resolving the industry’s bottlenecks. ▪ The Malian Sesame Seeds Federation: an organization that represents growers, processors and other value chain actors. The federation will be the industry body for the Malian sesame seeds’ value chain in domestic and global arenas. The federation will embrace the development of the sesame seed production and processing and will provide a cohesive vision to the currently fragmented industry. The federation will have the following goals: provide a stronger and recognized voice; improve grower capacity and quality; market and product development; and innovation. • Professionalization of the sesame seeds organizations and stakeholders. The Malian Sesame Seeds Federation will be in charge of development the technical and management capacity of the value chain. The federation will assist in the formation of cooperatives and producer organizations. Building the capacity of the federation and cooperative using international development assistance will be critical to their success. The capacity development of these organizations will need to be conducted in collaboration with area vocational centers and educational institutions to develop specific curricula including: o Development of sesame seeds production, harvesting, packaging, storage and processing skills. o Farm management. o Trade and market development. o Traceability and quality requirements. Create Platforms for Growth – Short to Medium Term 39. The sesame seed value chain must grow in value (quality, certifications and processing) and volume (higher production and yields). A consistent supply of sesame seeds is critical to attracting investors such as Olam and building a long-term stable industry. The industry has to make gains in productivity and yields to be regionally and internationally competitive. Key platforms that need to be in place /or enhanced to achieve competitive growth are: grower’s capacity, market development and infrastructure. Growers’ Capacity • Improve farmers’ value added by improving yield using better seeds, enhancing agricultural techniques and controlling plant disease. Building the capacity of growers by communicating research and development crop priorities; ensuring their access to better crop and farm management tools and systems; improving access to market information; and developing their crop knowledge, sustainability, and other techniques. Key areas for investment include: o Research and development (R&D) by developing improved and better varieties for draught, heat, pests, higher yields, consistent crop quality and consistent production. o Better and accessible extension services to achieve higher quality, yields, stable/increased production and wider industry knowledge base for smallholders involved in smaller cash crops. 60 o Training on sesame varieties, planting window, agronomy, water, price interactions, storage and packaging. o Best practice guides and crop management packages with crop check systems and systems to benchmark top growers. o Continued and enhanced crop protection. o Coordination with the National Council for Sesame Seeds and the Sesame Seed Federation to develop communication tools such as SMS messages, audio and video tools and information sheets on sesame production and market information such as cropping systems, prices and approved traders. Use these tools to raise awareness among producers on illicit trading and opportunity costs for selling at lower prices. Market Development – Quality Sesame Products and Sesame Processing • Ensure that Mali’s sesame sector produces traceable, certifiable quality sesame. There is a need to improve the image of Malian sesame seeds in export markets. This will involve investment in developing standards and market. The industry needs to build its understanding of markets and be proactive in communicating information to stakeholders. This is an important task for the National Council for Sesame Seeds and the Sesame Seed Federation to undertake. Some of the key investments in this area include: o Educate value chain actors on quality and health certifications and traceability. o Develop standards and protocols for production and trading in sesame seeds. o Develop, maintain and review quality and certification schemes to ensure alignment with regional and international markets and consistency with demand markets. o Develop and implement a payment for quality systems. Develop a database that contains information on sesame seeds varieties, quality, certifications and prices to develop a payment and warehouse receipt system. o Identify potential to target specific quality opportunities such as organic sesame. o Develop a public private partnership to collaborate with international organizations such as USDA to develop a quality certification and traceability systems. o Develop technical fact sheets for sesame seeds for the different markets’ segments (meal – poultry, pigs, dairy, etc; oil – shallow frying, roasting; salad dressing; garnish, snacks, etc.). o Develop a proposal for a commodity support program, which incorporates regionally based sesame seeds industry specialists from Ethiopia, Burkina Faso, Nigeria, etc. Identify funding options for this proposal and seek funding for implementation. o Promote the sustainable production practices among stakeholders. • Increase local processing power and consumption of sesame seeds in Mali. Improved production at farm level will drive increased investment in processing, export activities, and enhance the industry’s value and contribution to Mali’s prosperity. The National Council for Sesame Seeds and the Sesame Seed Federation will work on building a resilient and competitive sector within a more integrated and competitive value chain. Key investment in this area include: 61 o Design a policy to support the sector using different incentives and target local processing using tax incentives. Consider implementing a gradual tax on unprocessed sesame and regional exports once the industry reaches scale in Mali. o Develop production volumes and quality to reach economies of scale for primary and secondary processing. o Encourage primary processing, set primary processing targets, educate processors on sorting, cleaning, grading, packaging and labelling and facilitate access to equipment. o Develop local consumption of sesame oil, sesame products, local brands and feed products. o Build the capacity of the small women entrepreneurs that are currently in secondary processing to improve their products and develop a brand strategy. Broker partnership with a global player to improve their skills and market their products in internationally. o Identify key opportunities for innovation and leverage local incubators. o Work with international organizations to leverage social and impact investment funds to support the development of processors. o Work with international organizations and regional leaders such as Morocco to develop an agribusiness and food technology curricula and exchange programs. o Develop partnership with lead firms can disrupt the sector and develop sesame processing. • To improve farmers’ value added by increasing demand for Mali’s sesame seeds through adequate market assessment, strategy design and implementation targeting new and existing market. Improved production and quality at the production and processing level will increase export opportunities. Achieving certification and standards will help improve and build Mali’s image in intentional markets. This will involve investment in market promotion for sesame seeds from Mali. o Conduct research to inform marketing strategies and identify opportunities for product development in regional and international markets o Implement market specific support programs that includes information on import markets standards and requirements. o Utilize information on quality of Malian sesame seeds to promote exports. o Identify trading bottlenecks from exporters and importers’ points of view and resolve them. o Develop a market information system to inform value chain actors and use information to work with banks to develop industry value to facilitate credit instruments. o Conduct systematic market analysis to understand the regional developments in sesame seeds and Mali’s competitive position. o Implement packaging and labelling that identifies the Malian sesame from others. o Create a committee within the Sesame Federation to develop niche markets such organic sesame. 62 Infrastructure Development – Short to Medium Term / Medium to Long Term 40. There is a range of infrastructure/capability factors that will need to be addressed as the industry progresses upgrades. The infrastructure development goals include foster access of value chain actors and systems to facilitate upgrading and improve competitiveness. Improve infrastructure and services o Develop a value chain infrastructure strategy in coordination with the industry stakeholders to promote investments. o Develop testing and certifications labs and smallholder access to these facilities. o Develop logistic to improve access to markets and export ports. o Develop value chain infrastructure: registered premises for food products, storage, quality/traceability systems, drying and handling facilities, soft handling and post-harvest, and export processing facilities. o Collaborate with private sector to establish primary and secondary processing facilities. o Evaluate current oil processing capacity to identify opportunities such underutilized capacity in cottonseed oil processing facilities that can be redirected to sesame seed processing. Upgrading Mali’s Cashew Value Chain 41. To address the challenges we discussed above we propose a process upgrading strategy in the short to medium term and product upgrading by developing the processing sector in the medium to long term. In the short term, the industry needs to build the value chain by developing the institutions and organizations that facilitate growth and upgrading. In the short to medium term, the industry needs to achieve consistent and larger production of required qualities to meet global demand. In the medium to long term, the industry needs to develop a resilient and a diverse processing sector within a more integrated and competitive value chain. Institutional Development – Short Term • Develop the edible nuts’ sector strategy that takes into consideration the developments in global, regional and domestic food and feed sector. The country will need to develop an overall edible nuts plan with cashew nut production as one of the priority subsectors. The cashew sector is in its infancy but has considerable potential to supply regional and global markets that are currently undergoing supply shortages and willing to pay premium prices. The priority of the strategy will be to identify ways that the cashew value chain can sustainably develop and capture market share in raw and processed cashew markets. • Define Mali’s cashew nuts’ sector priorities and organizations. Mali is currently competing with large and emerging regional players in the lucrative cashew markets. The country will need to increase its production and quality while also developing its processing. The goal of the plan is to improve the image, availability and position of Mali’s cashew nuts’ regionally and globally. The cashew nuts’ plan will need to include: o Specific cashew production volume and quality targets and yield improvements to be achieved in the next three years and in the next 5 years. o Specific quality requirements based on global buyers crop specifications. 63 o Establish cashew nuts’ quality certification schemes in collaboration with international organizations and a local institution. o Create a set of incentives and credit schemes that target improving grower capacity, innovation in processing, market and product development. These incentives and schemes will be delivered through organizations that will be created to represent the value chain participants and liaise between them and government organizations. These organization will coordinate activities with the African Cashew Alliance to develop Mali’s cashew sector. o Create two organizations that represent the sector: ▪ Cashew Nuts Council: Create the National Council for Cashews in Mali (NCC). This will serve as public private partnership/ quasi-governmental body that is in charge of developing the sector, policy formulation, trade promotion, private sector development and resolving the industry’s bottlenecks. ▪ The Malian Cashew Nuts Federation: an organization that represents growers and other value chain actors. The federation will be the industry body for the Malian cashew nuts’ value chain in domestic and global arenas. The federation will embrace the development of the cashew nuts production and processing and will provide a cohesive vision to the currently fragmented industry. The federation will have the following goals: provide a stronger and recognized voice; improve grower capacity and quality; orchard sustainability; market and product development; and innovation. • Professionalization of the cashew nuts’ organizations and stakeholders. The Malian Cashew Nuts Federation will be in charge of development the technical and management capacity of the value chain. The federation will assist in the formation of cooperatives and producer organizations. Building the capacity of the federation and cooperative using international development assistance will be critical to their success. The capacity development of these organizations will need to be conducted in collaboration with area vocational centers and educational institutions to develop specific curricula including: o Development of cashew nuts’ production, harvesting, packaging, storage and processing skills. o Farm management. o Trade and market development. o Traceability and quality requirements. Create Platforms for Growth – Short to Medium Term 42. The cashew nut value chain must grow in value (quality, certifications and processing) and volume (higher production and yields). A consistent supply of cashews is critical to attracting investors such as Olam and building a long-term stable industry. The industry has to make gains in productivity and yields to be regionally and internationally competitive. Key platforms that need to be in place /or enhanced to achieve competitive growth are: grower’s capacity, market development and infrastructure. Growers’ Capacity • Improve farmers’ value added by improving yield using better seeds, enhancing agricultural techniques and controlling plant disease. Building the capacity of growers by communicating 64 research and development crop priorities; ensuring their access to better crop and farm management tools and systems; improving access to market information; and developing their crop knowledge, sustainability, and other techniques. Key areas for investment include: o Research and development (R&D) by developing improved and better varieties for draught, heat, pests, higher yields, consistent crop quality and consistent production. o Better and accessible extension services to achieve higher quality, yields, stable/increased production and wider industry knowledge base for smallholders involved in smaller cash crops. o Training on cashew varieties, planting window, agronomy, water, price interactions, storage and packaging. o Best practice guides and crop management packages with crop check systems and systems to benchmark top growers. o Continued and enhanced crop protection. o Coordination with the Cashew Nut Council and the Cashew Nut Federation to develop communication tools such as SMS messages, audio and video tools and information sheets on cashew production and market information such as cropping systems, prices and approved traders. Use these tools to raise awareness among producers on illicit trading and opportunity costs for selling at lower prices. Market Development – Quality Cashew Nuts (Raw and Processed) • Ensure that Mali’s cashew sector produces traceable, certifiable quality cashew nuts. There is a need to improve the image of Malian cashew nuts in export markets. This will involve investments to develop standards and markets. The industry needs to build its understanding of markets and be proactive in communicating information to stakeholders. This is an important task for the Cashew Council and the Cashew Nut Federation to undertake. Some of the key investments in this area include: o Educate value chain actors on quality and health certifications and traceability. o Develop standards and protocols for production and trading in cashew nuts. o Develop, maintain and review quality and certification schemes to ensure alignment with regional and international markets and consistency with demand markets. o Develop and implement a payment for quality systems. Develop a database that contains information on cashew varieties, quality, certifications and prices to develop a payment and warehouse receipt system. o Identify potential to target specific quality opportunities such as organic cashews. o Develop a public private partnership to collaborate with international organizations such as USDA to develop a quality certification and traceability systems. o Develop technical fact sheets for cashew nuts’ different market segments (meal – poultry, dairy, etc; garnish, snacks, etc.; cashew nut beverages, butter; cashew apple: sauces, jams, etc.). 65 o Develop a proposal for a commodity support program, which incorporates regionally based cashew nuts industry specialists from Burkina Faso, Cote d’Ivoire, etc. Identify funding options for this proposal and seek funding for implementation. o Promote sustainable production practices among stakeholders. • Increase local processing power and consumption of cashews in Mali. Improved production at the farm level will drive increased investment in processing, export activities, and enhance the industry’s value and contribution to Mali’s prosperity. The Cashew Nut Council and the Cashew Nut Federation will work on building a resilient and competitive sector within a more integrated and competitive value chain. Key investment in this area include: o Design a policy to support the sector using different incentives and target local processing using tax incentives. Consider implementing a gradual tax on unprocessed cashews and regional exports once the industry reaches scale in Mali. o Develop production volumes and quality to reach economies of scale for primary and secondary processing. o Encourage primary processing, set primary processing targets, educate processors on shelling, sorting, cleaning, grading, packaging and labelling and facilitate access to equipment. o Develop local consumption of cashew apple products, cashew nuts, local brands and feed products. o Build the capacity of the small women entrepreneurs that are currently in secondary processing to improve their products and develop a brand strategy. Broker partnership with a global player to improve their skills and market their products in internationally. o Identify key opportunities for innovation and leverage local incubators. o Work with international organizations to leverage social and impact investment funds to support the development of processors. o Work with international organizations and regional leaders such as Morocco to develop an agribusiness and food technology curricula and exchange programs. o Develop partnership with lead firms can disrupt the sector and develop cashew production, processing and marketing. • To improve farmers’ value added by increasing demand for Malian cashew nuts through adequate market assessment, strategy design and implementation targeting new and existing market. Improved production and quality at the production and processing level will increase export opportunities. Achieving certification and standards will help improve and build Mali’s image in intentional markets. This will involve investment in market promotion of Malian cashew nuts. o Coordinate with the African Cashew Alliance to conduct research to inform marketing strategies and identify opportunities for product development in regional and international markets. o Implement market specific support programs that includes information on import markets standards and requirements. 66 o Identify trading bottlenecks from exporters and importers’ points of view and resolve them. o Develop a market information system to inform value chain actors and use information to work with banks to develop industry value to facilitate credit instruments. o Conduct systematic market analysis to understand the regional developments in cashews and Mali’s competitive position. o Implement packaging and labelling that identifies the Malian cashews from others. o Create a committee within the Cashew Federation to identify and develop niche markets such organic nuts. Infrastructure Development – Short to Medium Term / Medium to Long Term 43. There is a range of infrastructure/capability factors that will need to be addressed as the industry progresses upgrades. The infrastructure development goals include foster access of value chain actors and systems to facilitate upgrading and improve competitiveness. Improve infrastructure and services • Develop a value chain infrastructure strategy in coordination with the industry stakeholders to promote investments. • Develop testing and certifications labs and smallholder access to these facilities. • Develop logistic to improve access to markets and export ports. • Develop value chain infrastructure: registered premises for food products, storage, quality/traceability systems, drying and handling facilities, soft handling and post-harvest, and export processing facilities. • Collaborate with private sector to establish primary and secondary processing facilities. 67