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Managing depleting gold revenues in Mali: An assessment of policy options

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  • Traore, Fousseini
  • Zebaze, Calvin Djiofack

Abstract

This paper analyzes the impact of medium term policy options in the context of gold resources depletion in Mali. Using a recursive-dynamic computable general equilibrium (CGE) model calibrated to a 2006 Malian SAM, we assess the impact of two policy options in the context of gold resources depletion in Mali: the adoption of the permanent income hypothesis and a “borrow and invest” scenario consisting at boosting public investment by 5 percentage points of GDP. The depletion of gold resources in Mali would cause a substantial fall in GDP growth, and lead to unsustainable fiscal path if the government were to keep its current pattern of spending. Adopting either the “borrow and invest” fiscal approach or the permanent income hypothesis is likely to generate higher growth and a more sustainable fiscal framework compared to the status quo.

Suggested Citation

  • Traore, Fousseini & Zebaze, Calvin Djiofack, 2014. "Managing depleting gold revenues in Mali: An assessment of policy options," Conference papers 332467, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332467
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    References listed on IDEAS

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    1. Frederick van der Ploeg & Anthony J. Venables, 2011. "Harnessing Windfall Revenues: Optimal Policies for Resource‐Rich Developing Economies," Economic Journal, Royal Economic Society, vol. 121(551), pages 1-30, March.
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    3. Mr. Saji Thomas, 2010. "Mining Taxation: An Application to Mali," IMF Working Papers 2010/126, International Monetary Fund.
    4. Martin, Will & Mitra, Devashish, 2001. "Productivity Growth and Convergence in Agriculture versus Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 49(2), pages 403-422, January.
    5. Djiofack, Calvin Z. & Omgba, Luc Désiré, 2011. "Oil depletion and development in Cameroon: A critical appraisal of the permanent income hypothesis," Energy Policy, Elsevier, vol. 39(11), pages 7202-7216.
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