A mission from the International Monetary Fund (IMF), led by Christian Josz, held discussions with the Malian authorities in Washington D.C. during March 25-April 7 and on the sidelines of the IMF-World Bank Spring Meetings. Discussions were also held in Bamako in March and April 11, 23-24, in preparation of the third review of the government’s economic program supported under the IMF’s Extended Credit Facility (ECF) approved in December 2013.
“The mission met with Modibo Keita, Prime Minister; Issaka Sidibe, President of the National Assembly; Mamadou Igor Diarra, Minister of Economy and Finance; Abdine Koumare, President of the Finance Commission of the National Assembly; Konzo Traoré, National Director, Central Bank of West African States (BCEAO); representatives from the National Assembly, civil society, unions, the private sector, and Mali’s development partners.
At the conclusion of the discussions, Mr. Josz issued the following statement:
“In 2014 Mali’s economy returned to strong growth, with an increase in real gross domestic product (GDP) of 7.2 percent. This contrasted with 2012 when growth was zero due to the security crisis, and 2013 when a poor harvest reduced growth to 1.7 percent. Inflation remains low, at 0.9 percent after -0.6 percent in 2013. For 2015, real growth is projected to continue at 5.0 percent and inflation is expected to remain well below the region’s 3 percent target.
“The last quarter of 2014 was marked by important efforts to strengthen public financial management, including strict adherence to budget and procurement rules. However, the objectives for end-2014 relating to tax revenue, the basic fiscal balance and bank and market financing were not met. Tax revenue was lower than programmed (by 0.7 percent of GDP) in 2014 due to weaknesses in customs administration, and combined with higher spending and a delay in budget support, led to a wider basic fiscal deficit (by 0.6 percentage points of GDP) and higher bank and market financing (by 1.6 percent of GDP) than programmed. Since the beginning of 2015, the government has implemented measures to put in place results-based management in the tax and customs directorates, which have already succeeded to put the tax revenue back on track at the end of the first quarter.
“We reached an agreement with the authorities that will permit proposing the conclusion of the third review of the ECF arrangement to the IMF Board. We welcome the government’s commitment to submit a new supplementary budget to the National Assembly. This supplementary budget will be the basis for the ECF program in 2015. It targets an increase of tax revenue by 1.8 percent of GDP and an overall fiscal deficit (cash basis) of 5.0 percent of GDP, half of which will be financed by donor support and the balance in the regional financial market. This supplementary budget makes room for additional spending to implement the multi-year military programming law elaborated with the assistance of the European Training Mission of the Malian army (EUTM), the Algiers Peace Agreement, a long delayed agreement with the trade unions to raise wages in the civil service, and the payment of arrears owed to government suppliers.
“The mission also welcomes the steps that the government is taking to implement results-based management in the tax and customs administrations, to strictly adhere to budget and procurement rules, to tighten cash management, to strengthen debt management, and to consolidate financial sector stability.
“The IMF Executive Board is tentatively scheduled to discuss the review in June 2015.
“The mission thanks the authorities for the provision of ample information and the frank and fruitful exchanges.”
Source: International Monetary Fund (IMF)