Mali’s minister for private investment, SMEs and national entrepreneurship, Safia Boly, talks about government efforts to give start-ups an alternative source of finance.
Q: What is the government doing to foster entrepreneurship in Mali?
A: We have an entire ecosystem to build. For the past couple of decades, we spent our energy on trying to bring in FDI and we have succeeded when it comes to mining. Today, we have 14 active mines that produce 60 tonnes of gold every year.
We have also brought in enough technology and support for the cotton industry, although we still talk of cotton in terms of agriculture, not necessarily industry. We produce close to 800,000 tonnes of cotton every year, but we only transform about 1% to 2% of that. There is still huge potential for industry there. We made efforts in that direction until we had difficulties in terms of security and social unrest. That made it harder to bring in FDI. And this is where our SMEs [were given the opportunity to] shine because it gave us a chance to put more efforts into them.
Q: In a way you are switching FDI [to target] SMEs. Do you have specific targets in mind?
A: We want to create and foster 4000 SMEs during the mandate of president Ibrahim Boubacar Keïta, which will end in 2023. As this process unfolds, we are not only going to map existing ideas and SMEs, we’re also benchmarking them to provide them with the criteria they need to follow in order to upgrade.
We’re also creating a similar mechanism for start-up incubators. We are about to introduce legislation that defines the role of the incubator and the criteria to become an incubator. The end of the ecosystem is really the financing aspect of it. That’s what turns an idea, a project, into a concrete enterprise.
Our ministry is in charge of promoting microfinancing in Mali. It is very difficult for SMEs to meet the requirements of a commercial bank, so microfinance institutions were considered as an alternative means of financing. However, more and more we see that interest rates are very high. That still constitutes a risk for a small start-up. So, through other means, such as angel investing, we’re looking for alternative ways to lower the cost for SMEs and still allow this population of talented youth to be financed.
Q: What is your selling point when it comes to luring angel investors into Mali?
A: It is a very strong public-private partnership. From the public side, you have a government that has established a law to protect investors and allow them if they wish to repatriate 100% of the benefits that they’ve made. It has also strengthened our justice system to make sure that they feel comfortable where they go. On the private side of things, we have a pool of young, talented entrepreneurs, and our economy is still growing at 5% every year, in spite of its challenges. It is still considered a land of opportunity in many aspects as we only have an industrialisation or transformation rate of 2% of our yearly agriculture production, and there is room for so much more.
Q: Do you believe that moving forward this shift from FDI to capital will continue?
A: It needs time to prove itself. We’ll see how it progresses, and we’ll see which one between SMEs and FDI we should support more for the improvement of the national ecosystem.
This article first appeared in the April-June edition of fDi Magazine. The full digital version of the magazine is available here.