The Executive Board of the International Monetary Fund (IMF) today completed the second review of Mali’s economic performance under a program supported by the Extended Credit Facility (ECF)1. The Board’s decision allows the government to request a further disbursement amounting to SDR 2 million (about US$3.1 million), which would bring total disbursements to Mali to SDR 21.99 million (about US$34.1 million).
The Executive Board also approved the authorities’ request for a modification of performance criteria related to the domestic financing of the budget for end-December 2009.
The ECF arrangement with Mali was approved on May 28, 2008 (see Press Release No. 08/126) for an amount of SDR 27.99 million (about US$45.7 million).
At the conclusion of the Executive Board’s discussion on Mali’s ECF, Mr. Murilo Portugal, Deputy Managing Director and Acting Chair, stated:
“The global recession has had only a limited impact on Mali, and economic performance in 2009 has been good, with solid GDP growth and low inflation. Buoyant gold exports have led to a greater-than-projected improvement of the external current account deficit, and the balance of payments has also benefited from large privatization revenues and the SDR allocations. The 2009 program has remained on track. Nevertheless, Mali remains vulnerable to climatic and other external shocks.
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“The authorities remain committed to prudent economic policies. The draft 2010 budget provides an adequate foundation for continued progress. Maintaining sound macroeconomic policies and further strengthening the structural reform effort will buttress program objectives of economic growth close to 5 percent and a further decline of inflation. The structural reform program for 2010 will focus on public financial management and the banking sector.
“It will be important to ensure that the revenue from the privatization of the state telecom company SOTELMA, equivalent to 4 percent of GDP, be used for investments on nonrecurrent expenditures that promote poverty reduction and growth. In this regard, the authorities’ intention to keep the underlying fiscal deficit excluding privatization-financed spending to about 1 percent of GDP is welcome,” added Mr. Portugal.
The Extended Credit Facility (ECF) has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries by providing a higher level of access to financing, more concessional terms, enhanced flexibility in program design features, and more focused streamlined conditionality. Financing under the ECF currently carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years. The Fund reviews the level of interest rates for all concessional facilities every two years.