Abstract
Mali has made progress in reducing macroeconomic imbalances, improving the competitiveness of the economy, and alleviating economic distortions under the Poverty Reduction and Growth Facility (PRGF) Arrangement. Executive Directors commended this step, and stressed the need to maintain fiscal and monetary policies, and accelerate structural reforms. They noted that the Malian economy suffered from trade losses and difficulties in the cotton and electricity sectors, and urged to take necessary actions. They appreciated the authorities' commitment to the PRGF-supported program, and supported the request for waivers.
Information received from the Malian authorities indicates that Mali’s PRGF-supported program has remained on track through the first half of 2000. In the fiscal area, tax revenue through June was in line with the indicative target and government spending was tightly controlled; the wage bill was kept below the program ceiling. As a result, the basic overall fiscal surplus was higher than programmed and net credit to the government was well below the program benchmark (CFA franc 7.5 billion compared with CFA franc 21.7 billion).
Concerning the use of debt relief under the HIPC Initiative, the Malian authorities have indicated that the assistance under the original framework and the interim assistance under the enhanced framework will be fully allocated to help finance the additional spending under the education and health sector development programs (PRODEC and PRODESS, respectively). Total expenditure on health and education will be increased from 4.8 percent of GDP in 1999 to 5.3 percent in 2000 and 5.8 percent in 2001-02.
As regards the assistance under the enhanced framework, the authorities intend to develop the full details on its use within the framework of the preparation of their full PRSP. At present, they tentatively envisage the following breakdown of the use of those resources (in percent):
| Education | 30 |
| Health | 25 |
| Drinking water supply | 15 |
| Rural infrastructure | 10 |
| Employment programs | 5 |
| Other, including housing | 15 |
| Total | 100 |
| Education | 30 |
| Health | 25 |
| Drinking water supply | 15 |
| Rural infrastructure | 10 |
| Employment programs | 5 |
| Other, including housing | 15 |
| Total | 100 |
The draft 2001 government budget, which is currently being prepared for presentation to the National Assembly on October 2, 2000, does not include assistance under the enhanced HIPC Initiative. In the event the floating completion point under the enhanced framework is reached in 2001, a supplementary budget will be prepared, in consultation with the staffs of the Fund and the World Bank.