Mali: Third Review Under the Extended Credit Facility Arrangement, Request for Waiver of Performance Criteria, and Request for Modification of Performance Criteria

In spite of the implementation of measures to strengthen public financial management during the last quarter of 2014, the performance criteria (PC) for end-2014 relating to gross tax revenue and bank and market financing of the government were not met owing to administrative weaknesses at the customs administration and a conflict with importers. However, following the increase in oil product taxation and steps to implement results-based management at the tax and customs administration, tax revenue was back on track at end-March 2015.

Abstract

In spite of the implementation of measures to strengthen public financial management during the last quarter of 2014, the performance criteria (PC) for end-2014 relating to gross tax revenue and bank and market financing of the government were not met owing to administrative weaknesses at the customs administration and a conflict with importers. However, following the increase in oil product taxation and steps to implement results-based management at the tax and customs administration, tax revenue was back on track at end-March 2015.

Background, Recent Developments, and Outlook

1. Mali’s security situation remains difficult. In January 2015, a new government was appointed with a mandate to restore peace and security in the country and implement sound public financial management. After eight months of discussions, mediated by the international community, the government and some rebel groups arrived at a tentative peace agreement that still needs to be signed. Notwithstanding this welcome development, the security situation in the North remains problematic and the capital Bamako was the target of a terrorist attack in March.

2. The economy rebounded in 2014, following anemic growth in 2012–13 (Figure 1, Text Table 1, Tables 2 and 7). Real GDP growth reached 7.2 percent in 2014, compared to 1.7 percent in 2013, when the harvest suffered from unfavorable weather conditions, and zero percent in the crisis year 2012. Activity in 2014 was driven by a return to more normal levels of cereal production and strong growth in the manufacturing sector. Annual inflation averaged 0.9 percent in 2014, with no discernible external or domestic cost pressures. The current account deficit (including grants) of the balance of payments widened sharply to an estimated 7.3 percent of GDP from 3.4 percent in 2013, as international gold prices declined and imports picked up in response to the economy’s revival. The higher current account deficit, together with a decline in FDI inflows and external loans to the public sector, and continued net foreign asset accumulation by Mali’s commercial banks’—mainly in the form of bonds and t-bills issued by other countries of the West African Economic and Monetary Union (WAEMU)—led to an increase in the overall balance of payments deficit to 3 percent of GDP. This deficit was financed by a drawdown of the regional central bank’s foreign exchange reserves (by $260million).

Figure 1.
Figure 1.

Mali: Macroeconomic Developments and Outlook, 2011–18

Citation: IMF Staff Country Reports 2015, 151; 10.5089/9781513511801.002.A001

Sources: Malian authorities and Fund staff estimates.
Table 1.

Mali: Selected Economic and Financial Indicators, 2013–18

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Sources: Ministry of Finance; and IMF staff estimates and projections.

IMF Country Report No. 14/337, Mali: First and Second Reviews Under the Extended Credit Facility Arrangement.

Total revenue, plus general budgetary grants, plus revenue from HIPC debt relief, minus total expenditure and net lending excluding foreign-financed capital sp

Includes BCEAO statutory advances, government bonds, treasury bills, and other debts.

Table 2.

Mali: National Accounts, 2013–18

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Sources: Malian authorities; and IMF staff estimates and projections.

Share of 2013 Real GDP.

IMF Country Report No. 14/337, Mali: First and Second Reviews Under the Extended Credit Facility Arrangement.

Table 3.

Mali: Central Government Consolidated Financial Operations, 2013–18

(CFAF Billions)

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Sources: Ministry of Finance; and IMF staff estimates and projections.

IMF Country Report No. 14/337, Mali: First and Second Reviews Under the Extended Credit Facility Arrangement.

Adjustment to account for the difference between the definitions of the government in the fiscal table and the monetary situation.

Total revenue, plus general budgetary grants, plus revenue from HIPC debt relief, minus total expenditure and net lending excluding externally financed capital spending.

Table 4.

Mali: Central Government Consolidated Financial Operations, 2015

(CFAF Billions)

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Sources: Ministry of Finance; and IMF staff projections.

IMF Country Report No. 14/337, Mali: First and Second Reviews Under the Extended Credit Facility Arrangement.

Adjustment to account for the difference between the definitions of the government in the fiscal table and the monetary situation.

Total revenue, plus general budgetary grants, plus revenue from HIPC debt relief, minus total expenditure and net lending, excluding externally financed capital spending.

Table 5.

Mali: Central Government Consolidated Financial Operations, 2013–18

(Percent of GDP)

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Sources: Ministry of Finance; and IMF staff estimates and projections.

IMF Country Report No. 14/337, Mali: First and Second Reviews Under the Extended Credit Facility Arrangement.

Adjustment to account for the difference between the definitions of the government in the fiscal table and the monetary situation.

Total revenue, plus general budgetary grants, plus revenue from HIPC debt relief, minus total expenditure and net lending excluding foreign-financed capital spending.

Table 6.

Mali: Central Government Operations, GFSM 2001 Classification,1 2013–18

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Sources: Ministry of Finance; and IMF staff estimates and projections.

Government Finance Statistics Manual (http://www.imf.org/external/pubs/ft/gfs/manual/).

IMF Country Report No. 14/337, Mali: First and Second Reviews Under the Extended Credit Facility Arrangement.