On July 7, 2017, the Executive Board of the International Monetary Fund (IMF) completed the Seventh Review of Mali’s performance under an economic program supported by an Extended Credit Facility (ECF) arrangement. [1] Completion of the review enables the disbursement of SDR 31.65 million (about US$43.96 million), bringing total disbursements under the arrangement to SDR 91.65 million (about US$ 127.29 million) or 49.1 percent of quota.
In addition, the Executive Board approved the authorities’ request for a one-year extension of the ECF arrangement to December 17, 2018 and an augmentation of access by SDR 88.6 million or 47.5 percent of quota. The additional financing and time will help strengthen the country’s efforts to implement the peace agreement, address related balance of payment needs and maintain program continuity. This will bring Mali’s total access under the current arrangement to SDR 186.6 million (about US$259.16 million) or 100 percent of quota.
The Executive Board approved the ECF arrangement for Mali on December 18, 2013 for the equivalent of SDR 30 million (about US$42.5 million at the time, see Press Release No. 13/524). [2]
Mali’s economy continues to grow at a robust pace, with a projected GDP growth of 5.3 percent for 2017 and 5.0 for 2018. Activity is being supported both by robust public capital spending and strong performance of agriculture. Inflation is projected to increase to 1.0 percent by end-December and is expected to remain contained at 1.4 percent in 2018. This favorable outlook is, however, subject to downside risks stemming mainly from Mali’s fragile security situation.
Following the Executive Board’s discussion, Mr. Tao Zhang, 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. Growth in 2016 remained robust, inflation was subdued, and the fiscal position was consistent with program objectives. The medium-term growth outlook remains positive, although fragile security conditions pose a downside risk. To support the authorities’ efforts, the IMF has approved an extension of the program period and augmentation of access under the arrangement.
“The Malian authorities have reaffirmed their commitment to the convergence of the fiscal deficit to the WAEMU norm of 3 percent of GDP by 2019. The 2017 budget reflects this objective while also providing for pressing spending needs. The 2018 budget will aim at maintaining expenditures in line with budgetary resources while protecting social spending and stimulating medium-term public investment. Fiscal consolidation will be anchored to improved resource mobilization, including boosting collection of indirect taxes and containing current spending while accommodating spending needs for security and decentralization.
“The authorities’ program includes steps to further strengthen tax administration, raise the efficiency of VAT collection, eliminate discretionary tax exemptions, and reform the system of incentives for tax inspectors. Further strengthening of public financial management is needed to support fiscal discipline. Strengthening the financial position of the state-owned electricity company would mitigate fiscal risks and free up resources for investment and priority spending.
“Keeping the reform momentum is important to improve the business climate and sustain robust, inclusive growth. To implement the 2015 Peace agreement, the authorities need to pursue fiscal decentralization. Adoption of the law prohibiting new discretionary exemptions, as well as implementing the law against unlawful enrichment will help consolidate recent progress in governance reforms.”
[1] The ECF is a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems.
[2] For more detail on the ECF arrangement for Mali and the country’s broader economic outlook, go to: www.imf.org/mali.
