MALI: Liberalisation Of Cotton Sector

Maliís cotton sector provides a livelihood for more than 3m Malians and accounts for about 15 percent of GDP. The reform of the cotton sector has long been on the government's policy agenda, owing partly to IMF and World Bank pressure, and partly to the Compagnie malienne pour le developpement des textiles' (CMDT) financial difficulties. The liberalisation of the sector has been gradual, however, indicating the government's reluctance to rush through changes.

The government's strategy is based on a study financed by the World Bank, which explored three options. The government has chosen the second option, under which the CMDT is to be split into three or four regional companies, each with exclusive rights to purchase cotton in its region, while also supplying producers with seeds, fertilisers, pesticides and technical support. The first option entailed the privatisation of the CMDT, which would have left the present structure of the parastatal unchanged. The third option proposed full liberalisation: the CMDT was to have been replaced by privately owned companies without exclusive rights to purchase cotton.

The government will encourage the participation of farmers' organisations in the new companies, and the change is due to take place in 2006. In the meantime, the CMDT will focus on its core activities, and sell ginning plants in the Kita area and its cottonseed oil division, Huilerie cotoniere du Mali. The reform of the cotton sector is politically sensitive, and the union representing the staff of the CMDT has already expressed concern over the government's plans.

Source: Agencies

February 04, 2004

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Added: February 4, 2004
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