The Executive Board of the International Monetary Fund (IMF) on May 23, 2018, completed the Eighth and Ninth Reviews of Mali’s performance under the program supported by an Extended Credit Facility (ECF) arrangement.
Completion of the reviews enables the disbursement of US$89.7 million or 34 percent of quota, bringing total disbursements under the current arrangement to US$ 219.7 million or 83 percent of quota.
- The economic recovery continued in 2017, with robust GDP growth, subdued inflation, and an improved fiscal position.
- The medium-term economic outlook remains positive, although fragile security conditions pose a downside risk.
- Keeping the momentum of structural reforms set in motion during the program will be critical to realize the positive outlook, improve the business climate and sustain robust, inclusive growth
The ECF arrangement for Mali was approved on December 18, 2013 for SDR 30 million (about US$46.2 million, or 16.1 percent of quota at the time.
Additional access of SDR 68 million (about US$96.4 million, or 36.4 percent of quota was approved on June 9, 2016. It was followed by an augmentation of SDR 88.6 million (about US$125.6 million), or 47.5 percent of Mali’s quota approved on July 7, 2017 along with a one-year extension of the program, bringing Mali’s access under the ECF arrangement to SDR 186. 6 million (about US$264.6 million) or 100 percent of quota.
Following the Executive Board’s discussion Mr. Furusawa, Deputy Managing Director and Acting Chair, made the following statement:
“Mali’s performance under the program supported by the IMF’s Extended Credit Facility Arrangement has been satisfactory. The economic recovery continued in 2017, with robust GDP growth, subdued inflation, and an improved fiscal position. The medium-term economic outlook remains positive, although fragile security conditions pose a downside risk.
“The Malian authorities have reaffirmed their commitment to reach the 2019 WAEMU convergence criteria. The 2018 budget aims at maintaining expenditures in line with budgetary resources while protecting social spending and stimulating medium-term public investment. Fiscal consolidation is underpinned by improved resource mobilization, including boosting collection of indirect taxes, and containing current spending while accommodating priority spending needs for security and decentralization.
“Improving revenue mobilization and strengthening the efficiency and quality of public spending is key to create fiscal space to finance investment in infrastructure, social, and human capital while maintaining sound public finances. The authorities’ program includes steps to strengthen tax administration, raise the efficiency of VAT collection, enforce taxpayer compliance, improve the effectiveness of mining sector taxation, and further streamline tax exemptions. Reinforcing public financial management and containing tax expenditures will also contribute to fiscal discipline. Strengthening the financial position of the state-owned electricity company would help mitigate fiscal risks and free up resources for investment and priority spending.
“Keeping the momentum of structural reforms set in motion during the program will be critical to realize the positive outlook, improve the business climate and sustain robust, inclusive growth. To advance the implementation of the 2015 Peace agreement, the authorities need to continue fiscal decentralization. Implementing the law against illicit enrichment, including through enforcement of the asset declarations by public officials, will help consolidate recent governance reforms.”
The Executive Board of the IMF also completed the 2018 Article IV Consultation with Mali.
Mali’s economic recovery continued in 2017 amid persistent security challenges. GDP growth remained robust, at an estimated 5.3 percent supported by good harvests and robust domestic demand. Inflation was subdued, remaining well below the regional ceiling. The 2017 fiscal outturn and the 2018 budget are in line with the program targets and the goal of converging to the WAEMU’s regional fiscal deficit norm of 3 percent of GDP by 2019. The macroeconomic outlook is, however, subject to downside risks stemming mainly from Mali’s fragile security situation.