Front Matter Page
© 2011 International Monetary Fund
February 2011
IMF Country Report No. 11/37
Mali: Fifth Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Extension of the Arrangement and Rephasing of Disbursement—Staff Report; Joint IDA/IMF Debt Sustainability Analysis; Informational Annex; Staff Statement; Statement by the Executive Director for Mali; and Press Release on the Executive Board Discussion
In the context of the fifth review under the three-year arrangement under the Extended Credit Facility and request for extension of the arrangement and rephasing of disbursement, the following documents have been released and are included in this package:
The staff report for the Fifth Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Extension of the Arrangement and Rephasing of Disbursement, prepared by a staff team of the IMF, following discussions that ended on November 10, 2010, with the officials of Mali on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on January 2, 2011. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.
Joint IDA/IMF Debt Sustainability Analysis
Informational Annex
A staff statement of January 20, 2001, updating information on recent developments.
A statement by the Executive Director for Mali.
A Press Release summarizing the views of the Executive Board as expressed during its January 26, 2001, discussion of the staff report that completed the request and/or review.
The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.
Copies of this report are available to the public from
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Front Matter Page
INTERNATIONAL MONETARY FUND
MALI
Fifth Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Extension of the Arrangement and Rephasing of Disbursement
Prepared by the African Department
(In consultation with other departments)
Approved by Roger Nord and Thomas Dorsey
January 3, 2011
Discussions. The discussions were held in Bamako during October 28–November 10, 2010. The staff team comprised Mr. Josz (head), Ms. Farahbaksh, and Messrs. Ghazanchyan, Blondy, Féler (resident representative) and Traore (local economist). The team met Prime Minister Modibo Sidibé, Minister of Finance and Economy Sanoussi Touré, Minister of Budget Lassine Bouaré, National Director of the Central Bank of West African States (BCEAO) Tatam Ly, other ministers and senior officials, the Vice-President of the National Assembly’s Finance Commission, trade union leaders, as well as representatives from the donor community, the private sector, and civil society.
ECF arrangement. The three-year arrangement under the Extended Credit Facility (ECF) was approved on May 28, 2008, in the amount equivalent to SDR 27.99 million (30 percent of quota). The fourth review was completed on July 16, 2010, along with the conclusion of the 2010 Article IV Consultation. The authorities are requesting the sixth disbursement under the arrangement (SDR 2 million), an extension of the arrangement from May 27, 2011 to December 31, 2011, and a rephasing of the last disbursement (SDR 2 million) into two equal tranches.
Staff views. The staff recommends completion of the review, extension of the arrangement, and rephasing of the last disbursement on the basis of the authorities’ achievements and policy intentions.
Contents
Executive Summary
I. Background
II. Recent Economic Developments and 2010 Program Implementation
III. Program Issues
The Medium-Term Macroeconomic Framework
Fiscal Policy and Reforms
Debt Sustainability
Other Structural Reforms
Relations with the Fund
Program Modalities and Risks
IV. Staff Appraisal
Appendix I. Letter of Intent
Attachment I. Memorandum of Economic and Financial Policies for 2010–11
Attachment II. Technical Memorandum of Understanding
Figure
1. Macroeconomic Developments, 2008–13
Text Tables
1. Key Economic Indicators, 2008–13
2. Central Government Consolidated Financial Operations, 2010–11
Tables
1. Selected Economic and Financial Indicators, 2008–13
2. National Accounts, 2008–13
3. Central Government Consolidated Financial Operations, 2008–13, in CFA billion
4. Central Government Consolidated Financial Operations, 2010, in CFA billion
5. Central Government Consolidated Financial Operations, 2008–13, in percent of GDP
6. Balance of Payments, 2008–13
7. Monetary Survey, 2008–13
8. Financial Soundness Indicators of the Banking Sector, 2002–10
9. Indicators of Capacity to Repay the Fund, 2008–14
10. Schedule of Disbursements under the ECF Arrangement, 2008–11
11. Millennium Development Goals, 1990–2008
ACRONYMS
ACCT |
Central Treasury Accounting Bureau |
ACI |
Property Transfer Agency |
AFRITAC |
West Africa Regional Technical Administration Center |
BCEAO |
Central Bank of West African States |
BHM |
Banque de l’Habitat du Mali (Housing Bank of Mali) |
CFAF |
CFA francs |
CMDT |
Compagnie Malienne pour le Développement des Textiles (Cotton Ginning Company of Mali) |
DGD |
Directorate General of Customs |
DGDP |
Directorate General of Public Debt |
DGI |
Directorate General of Taxation |
DME |
Medium-sized Business Directorate |
DNDC |
National Directorate of Property Titles |
DSA |
Debt Sustainability Analysis |
ECF |
Extended Credit Facility |
EITI |
Extractive Industry Transparency Initiative |
EPA |
Ex-Post Assessment |
FSAP |
Financial Sector Assessment Program |
G-PRSP |
Growth and Poverty Reduction Strategy Paper |
HIPC |
Highly Indebted Poor Countries |
MEFP |
Memorandum of Economic and financial policies |
MDGs |
Millennium Development Goals |
MDRI |
Multilateral Debt Relief Initiative |
OMH |
National Housing Authority |
PAGAM-GFP |
Programme d’action gouvernementale d’amélioration et de modernisation de la gestion des finances publiques (Government Action Program for Improving and Modernizing Public Finance) |
PC |
Performance criterion |
PEFA |
Public expenditure and financial accountability |
PFM |
Public Financial Management |
PGT |
General Payment Office |
PRSP |
Poverty Reduction Strategy Paper |
RGD |
Tax Collection Office |
SMEs |
Small and mediaum-sized enterprises |
SOTELMA |
Société de Télécommunications du Mali (Telephone Company of Mali) |
TFPs |
Technical and financial partners |
TMU |
Technical Memorandum of Understanding |
TOFE |
Central Government Consolidated Financial Operations Table |
VAT |
Value-added tax |
WAEMU |
West African Economic and Monetary Union |
Executive Summary
Program performance has been good. Macroeconomic outcomes have been favorable, helped by the able fiscal stewardship of the authorities. All end-June performance criteria and all but two end-June and end-September 2010 indicative targets were met. Three out of four structural benchmarks for the fifth review were observed, albeit with delay. Work is underway to meet the remaining benchmark. The end-year fiscal targets and structural benchmarks are within reach.
The authorities are requesting an extension of the ECF arrangement from May 27, 2011 to end-December 2011 (and a rephasing of the remaining disbursement in two equal tranches) to allow additional time for reaching new understandings on program design and policies. This would also enable the authorities to take full account of the findings of the ongoing Ex-Post Assessment (EPA) of the last seven years of Fund engagement in Mali, before deciding on the future nature of its engagement with the Fund.
The 2011 program aims to sustain economic growth, maintain low inflation, promote fiscal consolidation, and emphasize priority spending under Mali’s second Growth and Poverty Reduction Strategy (G-PRSP II) for 2007–11:
The draft 2011 budget introduced to Parliament is closely aligned with the program’s macroeconomic objectives and the G-PRSP II priorities.
The program’s spending envelope is slightly smaller than in the budget (by 0.5 percent of GDP), in anticipation of a supplementary budget that will identify resources to pay for underestimated VAT tax refunds in the draft budget, while keeping the deficit target unchanged.
The program will advance key reforms in tax policy, tax and customs administration, public financial management (PFM), financial sector development, and the cotton sector.
On the basis of the authorities’ achievements and policy intentions, the staff recommends completion of the review, extension of the ECF arrangement, and rephasing of the last disbursement.
Front Matter Page
INTERNATIONAL DEVELOPMENT ASSOCIATION
AND
INTERNATIONAL MONETARY FUND
MALI
Joint IDA/IMF Debt Sustainability Analysis Under the Debt Sustainability Framework for Low-Income Countries
Prepared by the staffs of the World Bank and the International Monetary Fund
Approved by Roger Nord and Thomas Dorsey and Jan Walliser and Carlos Braga (World Bank)
January 3, 2011
The updated DSA indicates that the risk of debt distress shifts from low to moderate because of increased vulnerabilities owing to higher volatility of gold exports than anticipated in the 2009 DSA. With the expected decline in gold exports in the medium term and the uncertain prospects for export diversification, Mali’s debt sustainability needs to remain under close scrutiny and to continue to be supported by prudent financial policies.
Front Matter Page
INTERNATIONAL MONETARY FUND
MALI
Fifth Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Extension of the Arrangement and Rephasing of Disbursement—Informational Annex
Prepared by the African Department
(In collaboration with other departments)
Approved by Roger Nord and Thomas Dorsey
January 3, 2011
Relations with the Fund. Describes financial and technical assistance from the Fund and provides information on the safeguards assessment and exchange rate system.
Joint Management Action Plan (JMAP). Describes the priorities and main activities of the World Bank Group and areas of cooperation with the IMF in their work with Malian authorities.
Statistical Issues. Assesses the quality of economic statistics. Data provision for surveillance purposes is adequate overall, but weaknesses in a broad range of economic statistics are hampering the analyses of economic developments.
Contents
Relations with the Fund
Relations with the World Bank Group
Statistical Issues
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January 20, 2011
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January 21, 2011
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Press Release No. 11/20
FOR IMMEDIATE RELEASE
January 26, 2011
International Monetary Fund
Washington, D.C. 20431 USA
Telephone 202-623-7100
Fax 202-623-6772