IMF Executive Board Concludes Second and Third Review Under Extended Credit Facility Arrangement for Mali

  • The IMF Executive Board decision allows for an immediate disbursement of about US$57.6 million to Mali to help meet the country’s financing needs and support social spending and the post-pandemic recovery.
  • The ECF arrangement continues to support the government’s effort to mobilize revenues, improve management of public finances and strengthen governance.
  • A slower return to the regional deficit ceilings will support the economic recovery in the near term. Meanwhile, reforms will focus on addressing structural fiscal pressures to ensure a more sustainable, growth-friendly and pro-poor fiscal policy
  • Washington, DC: The Executive Board of the International Monetary Fund (IMF) today completed the second and the third reviews of Mali’s performance under the program supported by the Extended Credit Facility (ECF). The three-year ECF arrangement for Mali of SDR 139.95 million (about US$191.9 million, equivalent to 75 percent of Mali’s quota in the IMF) was approved by the IMF’s Board on August 28, 2019 (see Press Release No. 19/319), to support the authorities’ economic reform program.

    The IMF has adjusted the program to allow space for the economy to recover from the aftermath of the pandemic and for the government to see through the policy response to mitigate its effects. In completing the reviews, the IMF Executive Board approved the waivers of non-observance on performance criteria, the modification of targets going forward, and rephasing of structural conditionality. The completion of the combined reviews allows the authorities to draw the equivalent of SDR 40 million (about US$57.6 million), bringing total disbursements under the ECF arrangement to the equivalent of SDR 80 million (about US$115.3 million).

    Following the Executive Board discussion of Mali’s economic program, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, issued the following statement:

    “The confluence of health, economic, socio-political and security crises has posed policy challenges. The authorities rightly refocused policy priorities towards combating the health and economic crises, curbing non-priority spending, and temporarily accommodating higher fiscal deficits. The program has been recalibrated to ensure near-term macroeconomic stabilization and medium-term fiscal sustainability, while ensuring that policies remain growth-friendly and pro-poor.

    “Fiscal policy will support the near-term economic recovery through a more gradual return to the regional WAEMU deficit ceiling. Reforms are needed to increase tax revenues and address emerging structural fiscal pressures on the wage bill and subsidies to public enterprises, in order to safeguard developmental, social, and sustainability objectives. Ensuring that support to households reaches those in need in a timely way remains an important priority.

    “Structural reforms will support the fiscal effort. The authorities are committed to strengthening revenue mobilization through continued reforms in tax and customs administration. Digitalization will support better revenue administration and public financial management. Reforms to strengthen commitment controls and the treasury single account will help improve the efficiency of cash management.

    “The authorities are stepping up efforts to enhance governance, transparency, and the business environment. Priorities include reforms of the anticorruption and AML/CFT frameworks and the implementation of the mandatory asset declarations. The transparency commitments related to COVID-19 emergency spending are being implemented and will be deepened through improved reporting of beneficial ownership by companies awarded public contracts. The initiation by the authorities of a Governance Assessment bodes well with future reforms.

    “The authorities’ strong commitment to reforms and their steadfast implementation will be key to success, and may also help unlock additional donor support.”

    Table 1. Mali: Selected Economic and Financial Indicators, 2017-25

    2017

    2018

    2019

    2020

    2021

    2022

    2023

    2024

    2025

    1st Review1

    Est.

    1st Review1

    RCF2

    Est.

    1st Review1

    Proj.

    Projections

    National income and prices

    (Annual percentage change)

    Real GDP

    5.3

    4.7

    5.1

    4.8

    5.0

    0.9

    -2.0

    5.0

    4.0

    6.0

    5.0

    5.0

    5.0

    GDP deflator

    1.9

    1.5

    2.5

    2.1

    1.8

    1.8

    2.0

    2.3

    1.5

    2.0

    2.0

    2.0

    2.0

    Consumer price inflation (average)

    1.8

    1.7

    -0.4

    -2.9

    0.6

    0.6

    0.7

    2.0

    1.5

    2.0

    2.0

    2.0

    2.0

    Consumer price inflation (end of period)

    1.1

    1.0

    -0.8

    -3.3

    1.7

    1.5

    2.1

    2.3

    1.5

    2.0

    2.0

    2.0

    2.0

    Output gap

    2.3

    2.2

    3.0

    -1.4

    -1.1

    -0.1

    0.0

    0.0

    0.0

    Money and credit

    Credit to the government

    55.7

    64.1

    27.7

    -36.6

    20.2

    48.1

    142.3

    45.7

    15.9

    6.2

    1.5

    -1.2

    Credit to the economy

    5.4

    4.8

    6.1

    2.2

    6.0

    2.7

    3.7

    5.6

    8.1

    7.1

    7.1

    7.1

    Broad money (M2)

    4.3

    14.2

    10.0

    9.0

    11.2

    3.3

    15.0

    5.6

    8.1

    7.1

    7.1

    7.1

    Central government finance and public debt

    (Percent of GDP, unless otherwise indicated)

    Revenue

    18.4

    14.3

    19.5

    19.5

    20.5

    17.9

    18.6

    20.7

    19.7

    19.5

    19.7

    19.8

    19.9

    of which: Tax revenue

    15.2

    11.9

    14.6

    14.8

    15.5

    13.3

    14.1

    15.7

    14.6

    14.8

    15.0

    15.0

    15.1

    Grants

    1.6

    1.2

    2.4

    1.9

    2.5

    3.0

    1.4

    2.0

    1.9

    1.6

    1.8

    1.5

    1.4

    Total expenditure and net lending

    22.9

    20.3

    24.8

    23.1

    26.4

    27.1

    25.5

    25.9

    27.1

    25.7

    25.0

    24.3

    24.3

    Overall balance (accrual basis)

    -2.9

    -4.7

    -2.9

    -1.7

    -3.5

    -6.2

    -5.5

    -3.3

    -5.5

    -4.5

    -3.5

    -3.0

    -3.0

    Overall balance (cash basis)

    -2.6

    -3.9

    -3.6

    -2.6

    -3.6

    -6.1

    -5.1

    -3.2

    -5.3

    -4.4

    -3.4

    -2.9

    -2.9

    Public debt (end of period)

    35.5

    36.1

    38.3

    40.5

    39.0

    44.6

    44.1

    39.5

    46.2

    46.9

    47.0

    46.6

    46.1

    External public debt

    24.5

    23.4

    26.3

    26.4

    26.1

    30.1

    26.3

    25.7

    25.6

    25.6

    25.8

    26.0

    26.6

    Domestic public debt3

    11.0

    12.7

    12.0

    14.0

    12.9

    14.5

    17.8

    13.8

    20.6

    21.3

    21.3

    20.6

    19.5

    Debt service (percent of revenues)

    6.3

    5.1

    4.8

    5.1

    5.6

    7.2

    6.3

    5.9

    7.3

    10.5

    10.0

    10.3

    9.1

    External sector

    Current account balance, including official transfers

    -7.3

    -4.9

    -4.8

    -4.8

    -4.4

    -3.6

    -2.0

    -4.6

    -2.4

    -2.9

    -3.6

    -4.5

    -5.3

    Current account balance, excluding official transfers

    -12.1

    -9.3

    -9.4

    -9.7

    -8.5

    -7.1

    -4.3

    -8.5

    -5.8

    -6.8

    -7.4

    -7.9

    -8.5

    Exports of goods and services

    22.5

    24.5

    23.6

    24.9

    24.0

    24.4

    27.2

    23.0

    26.2

    25.0

    23.7

    22.6

    21.7

    Imports of goods and services

    36.2

    35.6

    34.6

    36.0

    34.0

    31.5

    32.2

    32.9

    33.1

    32.9

    32.4

    32.0

    31.7

    Overall balance of payments

    -0.5

    1.1

    -0.3

    3.0

    0.1

    -3.7

    1.6

    -0.2

    1.4

    1.7

    1.0

    0.2

    -0.2

    Terms of trade (deterioration -)

    -25.3

    -0.1

    2.2

    9.8

    4.8

    24.6

    31.8

    0.2

    3.9

    -4.8

    -2.4

    -2.3

    -1.7

    Real effective exchange rate (depreciation -)4

    0.5

    0.3

    -4.2

    -0.3

    Memorandum items:

    Nominal GDP (CFAF billions)

    8,922

    9,482

    10,214

    10,140

    10,917

    10,427

    10,138

    11,732

    10,704

    11,573

    12,394

    13,274

    14,217

    Nominal GDP (US$ billions)

    16.1

    16.5

    17.2

    Public debt (CFAF billions)

    3,165

    3,424

    4,106

    4,649

    4,476

    4,945

    5,429

    5,827

    6,186

    6,557

    Overall balance of payments (US$ millions)

    -71

    189

    451

    US$ exchange rate (end of period)4

    554

    576

    590

    554

    Gold Price (CFAF billion/ton)

    22.7

    22.0

    20.9

    23.6

    23.0

    23.0

    32.9

    23.2

    34.8

    35.4

    35.8

    36.2

    36.6

    Cotton price (CFAF/kg)

    1,017

    1,063

    956

    851

    868

    971

    916

    863

    861

    869

    Petroleum price (crude spot; US$/bbl)

    53

    68

    62

    61

    58

    36

    41

    55

    50

    49

    48

    48

    48

    Sources: Ministry of Economy and Finance; and IMF staff estimates and projections.

    1 IMF Country Report No. 20/8, Mali: First Review Under the Extended Credit Facility Arrangement. The review was completed on January 8, 2020.

    2 IMF Country Report No. 20/153, Mali: Requests for Disbursement Under the RCF and Rephasing of Access Under the ECF.

    3 Includes BCEAO statutory advances, government bonds, treasury bills, and other debts.

    4 For 2020, the latest available data is for November.

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