Abstract
The security and political crisis in Mali caused a sharp recession along with tax and external financing shortfalls. There has been a sharp expenditure cut and increased recourse to domestic financing, but the accumulation of arrears is prevalent. The first disbursement under the Rapid Credit Facility (RCF) of special drawing rights (SDR) 12 million in February has catalyzed about $508 million of budget support thus far. Resumption of donor support brightens the path to economic recovery, but there remain important financing gaps. Strengthening public financial management is essential for sustained macroeconomic and fiscal stability.
The information below has become available following the issuance of the staff report. It does not alter the thrust of the staff appraisal.
The Donor Conference for Development in Mali organized by the European Union and France was held in Brussels on May 15. It was attended by heads of states, 108 delegations representing 80 countries and 28 international organizations, including the Fund, which Deputy Managing Director Min Zhu represented,1 and the World Bank. Donors pledged over $4 billion—more than double the level expected—to finance the Plan for the Sustainable Recovery of Mali in 2013-14 that the Board discussed on April 29. Although the details of the many pledges still need to be worked out, donor funding will be more than sufficient to fill the financing gap of CFAF 30 billion ($60 million) in 2013 highlighted in the staff report (¶15). Staff is of the view that the program for 2013 remains valid, as donor financing is expected to come in gradually starting in the second half of 2013. However, the public expenditure for 2014 presented in the staff report will most likely have to be revised upwards when detailed information about donor financing will be available. This will be done on the occasion of the elaboration of the 2014 budget in September.
“Together for a New Mali”, Remarks by Mr. Min Zhu, Deputy Managing Director of the International Monetary Fund (IMF) at the Donor Conference for Development in Mali in Brussels on May 15, 2013 available at: http://www.imf.org/external/np/speeches/2013/051513b.htm.