A mission from the International Monetary Fund (IMF) led by Mr. Christian Josz visited Bamako from March 21 to April 1, 2011 to conduct the sixth review of the three-year arrangement under the Extended Credit Facility (ECF). The mission met with Sanoussi Touré, Minister of Economy and Finance; Lassine Bouaré, Minister of Budget; Oumar Ly, National Director, Central Bank of West African States; and representatives of the National Assembly, and of Mali’s technical and financial partners.
At the conclusion of the mission, Mr. Josz, IMF Mission Chief for Mali, issued the following statement:
“In 2010, the government of Mali successfully implemented its economic program under the three-year ECF arrangement. The economy grew by 5.8 percent as a result of a good crop year, which helped keep inflation at 1.4 percent on average over the year. The basic fiscal deficit, excluding grants and foreign finances spending, showed a moderate deficit (1.2 percent of gross domestic product—GDP). This result is a reflection of the sound performance of revenue, expenditure control, and delays in the execution of capital expenditures owing to due procurement process.
“Except in one instance, where results fell just short of the target, all the public finance targets at end-2010 were met. Three of the four structural benchmarks, aimed at improving public financial management and strengthening the banking system, have been implemented and the fourth benchmark will be implemented shortly. However, as underlined during the conference on Economic Challenges and Opportunities in Mali, much remains to be done to continue improving the business environment and public financial management in order to accelerate growth, create more jobs, and move faster towards the Millennium Development Goals.
“As 2011 gets underway, the Malian economy is having to deal with the combined effects of the crisis in Côte d’Ivoire, the events in Libya, and rising world oil and food prices. Despite these shocks, real GDP growth is expected to reach 5.3 percent, propelled by gold and agricultural production. However, mounting transport costs, as a result of the crisis in Côte d’Ivoire, could push inflation up to 4.5 percent. The overall balance of payments position, also impacted by the crisis, is expected to show a deficit on the order of CFAF 50 billion (1 percent of GDP).
“The impact on the public budget could be even more pronounced, if pump prices of petroleum products and electricity tariffs are not adjusted to take account of higher crude oil prices. The measures aimed at stemming the deterioration of the fiscal situation should be incorporated in a 2010 supplementary budget law. Discussions are underway on a draft supplementary budget law, and will continue at the time of the Spring Meetings of the World Bank and IMF in mid-April 2011 in Washington.
“With the expectation that the discussions will be finalized soon, the sixth review of the arrangement under the ECF could be taken up by the IMF Executive Board in June 2011.”