Foreign Direct Investment and Agricultural Total Factor Productivity in Mali: A Single-Country Time Series Analysis (1990–2018)

Purpose: This paper examines the impact of Foreign Direct Investment (FDI) and Agricultural Total Factor Productivity (AgTFP) in Mali from 1990 to 2018. Research Method: The analysis uses the Phillips-Perron and Augmented Dickey-Fuller unit root tests, the Johansen Cointegration test, and the Vector Autoregressive (VAR) model for stability and normality assessment. A Vector Error Correction Model (VECM) is further utilized to explore both short- and long-term relationships. Findings: The results indicate that FDI inflows contribute positively to agricultural development and poverty reduction in Mali. FDI, which accounted for 3.3% of GDP in 2021, plays a crucial role in improving agricultural productivity, enhancing infrastructure, and strengthening value chains. However, the adjustment rate coefficient suggests that Mali's agricultural sector operates below its potential, facing challenges such as inefficient resource allocation, inadequate technological adoption, suboptimal infrastructure, and policy deficiencies. Originality/Value: The study highlights the necessity for Mali to implement strategic policies aimed at enhancing agricultural productivity. Recommendations include increasing investment in agricultural research and development, facilitating farmer access to credit and resources, strengthening extension services, promoting innovation, and encouraging sustainable agricultural practices. By accelerating the transition toward an optimal equilibrium, Mali can boost agricultural productivity, improve food security, enhance rural livelihoods, and foster overall economic growth.