Statement by the IMF Staff Representative

This paper evaluates Mali’s Fifth Review Under the Poverty Reduction and Growth Facility. The implementation of the program was satisfactory in the first nine months of 2002. All the quantitative performance criteria, benchmarks, and financial performance indicators were observed. The structural performance criteria and structural benchmarks for 2002 were met, except for one structural benchmark that was implemented late and an additional one that will be implemented in June 2003. The authorities intend to implement the ambitious medium-term economic framework and adjustment path underpinning the poverty reduction strategy adopted in May 2002.

Abstract

This paper evaluates Mali’s Fifth Review Under the Poverty Reduction and Growth Facility. The implementation of the program was satisfactory in the first nine months of 2002. All the quantitative performance criteria, benchmarks, and financial performance indicators were observed. The structural performance criteria and structural benchmarks for 2002 were met, except for one structural benchmark that was implemented late and an additional one that will be implemented in June 2003. The authorities intend to implement the ambitious medium-term economic framework and adjustment path underpinning the poverty reduction strategy adopted in May 2002.

February 28,2003

Since the issuance of the staff report for the fifth review under the PRGF arrangement, staff received the following information;

  • Cereal production is estimated at 2.3 million tons in 2002/03, down 11.4 percent from 2001/02. The cereal deficit is estimated at 0.4 million tons, and the government has started distributing food in some areas.

  • The overall fiscal deficit, on a commitment basis and excluding grants, is now estimated at 9.5 percent of GDP in 2002, instead of 9.9 percent indicated in the staff report. The revision mostly reflects higher government revenue.

  • The consumer price index declined by 1.9 percent in January 2003, bringing 12-month inflation down to 2.6 percent. The decline is mostly due to a fall in food prices.

  • The authorities announced that electricity tariffs would be cut by 10 percent, and discussions are underway on how the measure will be financed. Prices of telecommunications are also expected to be reduced.

  • The state monopsony CMDT agreed with trade unions on a severance package estimated at CFAF 8.5 billion for the 673 employees (about 25 percent of permanent employees) to be laid-off in March 2003. The budget for 2003 includes an allocation of CFAF 20 billon for severance packages to be granted in the context of the privatization program.

  • The government received only one low bid for the installation of a private ginning company in the OHVN/Kita area. Another investor withdrew from the bidding, concerned by the crisis in Côte d’Ivoire. The authorities are assessing the situation with World Bank staff.

  • The government accepted two technical bids for the privatization of the vegetable oil producing company Huicoma. Financial bids are expected in March 2003.

The new information does not change the thrust of the staff appraisal.

Mali: Fifth Review Under the Poverty Reduction and Growth Facility
Author: International Monetary Fund