Mali: Third Review Under the Extended Credit Facility Arrangement, Request for Waiver of Performance Criteria, and Request for Modification of Performance Criteria—Informational Annex
Author:
International Monetary Fund. African Dept.
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Publication Date:
16 Jun 2015
eISBN:
9781513511801
Language:
English
Keywords:
ISCR; CR; administration reform; customs; expenditure side; WAEMU trade data; financial asset; compilation system; SDR equivalent; public finance; Balance of payments statistics; Debt relief
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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.

Relations with the Fund

(As of April 30, 2015)

Membership Status: Joined: September 27, 1963; Article VIII

General Resources Account:

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SDR Department:

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Outstanding Purchases and Loans:

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Latest Financial Arrangements:

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Formerly PRGF.

Projected Payments to Fund 2/

(SDR Million; based on existing use of resources and present holdings of SDRs):

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When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

Implementation of HIPC Initiative:

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Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Implementation of Multilateral Debt Relief Initiative (MDRI):

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The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end–2004 that remains outstanding at the time the member qualifies for such debt relief.

Implementation of Catastrophe Containment and Relief (CCR): Not Applicable As of February 4, 2015, the Post-Catastrophe Debt Relief Trust has been transformed to the Catastrophe Containment and Relief (CCR) Trust.

Decision point - point at which the IMF and the World Bank determine whether a country qualifies for assistance under the HIPC Initiative and decide on the amount of assistance to be committed.

Interim assistance - amount disbursed to a country during the period between decision and completion points, up to 20 percent annually and 60 percent in total of the assistance committed at the decision point (or 25 percent and 75 percent, respectively, in exceptional circumstances).

Completion point - point at which a country receives the remaining balance of its assistance committed at the decision point, together with an additional disbursement of interest income as defined in footnote 2 above. The timing of the completion point is linked to the implementation of pre-agreed key structural reforms (i.e., floating completion point).

Safeguards Assessments

The Central Bank of West African States (BCEAO) is the common central bank of the countries of the West African Economic and Monetary Union (WAEMU). The latest safeguards assessment of the BCEAO of December 13, 2013 found that the bank continued to have a strong control environment and has enhanced its governance framework, including the establishment of an audit committee to oversee the audit and financial reporting processes. The assessment also identified some limitations in the external audit process and recommended the selection of a second experienced audit firm to conduct joint audits to ensure the adequacy of this mechanism, the implementation of IFRS (now envisaged for end-2015) and the strengthening the audit committee oversight.

Exchange Rate Arrangements

Mali is a member of the West African Economic and Monetary Union (WAEMU).. The union’s common currency, the CFA franc, was pegged to the French franc at the rate of CFAF 50 = FF 1 from 1948 until early 1994. Effective January 12, 1994, the CFA franc was devalued, and the new parity set at CFAF 100 = FF 1. Effective January 1, 1999, the CFA franc was pegged to the Euro at a rate of CFAF 655.96 = EUR 1.

As of June 1, 1996, Mali and other members of WAEMU accepted the obligations of Article VIII, Sections 2, 3, and 4 of the Fund’s Articles of Agreement. Mali’s exchange system has no restrictions on making payments or transfers for current international transactions and the country does not engage in multiple currency practices.

Sharing a common trade policy with other members of WAEMU, Mali has shifted key trade policymaking to the sub-regional level. The common external tariff (CET) was adopted in January 2000. Mali complies with the union’s tariff rate structure and has effectively dismantled internal tariffs. Between 1997 and 2003, WAEMU tariff reform reduced the simple average custom duty from 22 percent to 15 percent; the maximum rate is currently 20 percent. Imports to Mali are not subject to quantitative restrictions.

Mali’s exports to the European Union generally enjoy non-reciprocal preferential treatment in the form of exemption from import duties under the Everything but Arms initiative. Malian goods enjoy nonreciprocal preferential access to the markets of developed countries other than the European Union under the Generalized System of Preferences. Mali is also eligible to benefit from the United States’ African Growth and Opportunity Act. Mali imposes no de jure restrictions on exports.

Article IV Consultations

Mali’s Article IV consultation cycle is governed by the provisions of the decision on consultation cycles, Decision No. 14747–(10/96) (9/28/2010), as amended. The Executive Board completed the last Article IV consultation (Country Report No. 13/44) on January 28, 2013.

Technical Assistance

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Resident Representative

Mr. Anton Op de Beke has been the Fund Resident Representative in Bamako since October 2012.

Joint Management Action Plan Implementation

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Statistical Issues

(As of April 30, 2015)

Data provision has some shortcomings, but is broadly adequate for surveillance. Mali has been participating in the General Data Dissemination System (GDDS) since September 2001 and has advanced the implementation of its short- and medium-term plans for improvement. The metadata has been posted on the Dissemination Standards Bulletin Board (DSBB), since June 2003.

Real sector

The economic accounts of Mali are prepared by the National Institute of Statistics (INSTAT), in accordance with the System of National Accounts 1968 (SNA68) and adapted to certain characteristics specific to Mali. They are compiled on an annual basis. There are, however, weaknesses in the accuracy, coverage, and timeliness of national accounts data. The main reason has been the inadequacy of source data, along with insufficient funding and technical staffing of the INSTAT. The work on implementing the System of National Accounts 1993 (1993 SNA) is ongoing, with the support of the West African Economic and Monetary Union (WAEMU) Commission and AFRITAC West. The new series will be released in late 2014.

In concert with the other WAEMU member countries, the INSTAT has been compiling and publishing a harmonized consumer price index (CPI) for Bamako on a monthly basis since early 1998. The harmonized CPI has been updated in 2010 with 2008 as the new reference year.

Government finance statistics

As part of the process of economic integration among the member countries of the WAEMU, the country has made significant progress in bringing its fiscal data in line with the common framework that has been developed with technical assistance from the Fund (the harmonized table of government financial operations - TOFE based on the Government Finance Statistics Manual 1986). However, further efforts are needed to improve the timeliness and coverage of the TOFE. Work is progressing with the assistance of STA, AFRITAC West and AFRISTAT to expand the coverage of the TOFE to public agencies and local governments, as well as to strengthen coverage of domestic financing items. Quarterly budget execution reports are posted on the Ministry of Finance website on a timely basis.

In July 2007, a GFS mission visited Bamako to advance further the implementation of the Government Finance Statistics Manual 2001 (GFSM2001), and subsequently a country page was introduced in the 2007 issue of GFS Yearbook. To date the authorities have supplied six years of annual GFS data and they are preparing to disseminate quarterly data to STA for publication in IFS. However the reporting has stopped in 2012. In April 2013, a GFS mission visited Bamako and discussed some issues related to the current TOFE, as well as the reporting of GFSM 2001. Hopefully, Mali will resume reporting GFS data for the GFS Yearbook 2013. In addition, the mission discussed the implementation of the new TOFE (Directive n°10/2009/CM/UEMOA on TOFE) based on the GFSM 2001.

Public debt statistics (domestic and Foreign) are prepared and monitored by the Public Debt General Directorate (PDGD). The PDGD uses CS-DRMS accounting software. Debt data and projections are of generally good quality, although there is scope for improving presentation as well as the coverage of debt relief (multilateral and bilateral). A Debt Management Performance Assessment (DeMPA) was finalized in late 2009, and the authorities are working to strengthen debt data in line with the DeMPA report’s recommendations.

Monetary data

Monetary and financial statistics:

Monetary and financial statistics, compiled and disseminated by the regional Central Bank of West African States (BCEAO), are broadly adequate and their institutional coverage is comprehensive. The dissemination of monthly monetary data from the BCEAO takes four to six weeks consistent with GDDS recommendations. Data are posted on the BCEAO website with a considerably longer lag. Accuracy is somewhat hampered by the use of 1990 sorting coefficients to estimate cross border amounts of banknotes among BCEAO countries, which in turn are used to estimate currency in circulation and to adjust the net foreign assets of each member country. Standardized Report Forms (in line with the Monetary and Financial Statistical Manual) are still not regularly used to report monetary data to the IMF.

Balance of payments

In December 1998, the responsibility for compiling and disseminating balance of payments statistics was formally assigned to the BCEAO by area-wide legislation adopted by the countries participating in the WAEMU. The BCEAO national agency finalizes the data toward mid-November of the following year, and publishes immediately thereafter in the form of a brochure, which however are not sufficiently robust.

In general, the external sector statistics in Mali exhibit serious deficiencies. Concepts and definitions used to compile the balance of payments statistics are in broad conformity with the guidelines presented in the fifth edition of the Balance of Payments Manual (BPM5). The adoption of BPM6 methodology is not required before 2013/2014, except for the recording of SDR allocations as debt liabilities. The Mali balance of payments metadata should also be updated.

The BCEAO set up a sub-regional unit responsible for reconciling intra-WAEMU trade data, which is responsible for harmonizing the bilateral statistics of member states to eliminate asymmetries before these data on internal transactions in the Union are consolidated to prepare the WAEMU regional balance of payments. The corrections made are retroactive to national data and help to improve them.

Balance of payments data remain weak in a number of key areas. Data on remittances, foreign direct investment and portfolio flows are similarly weak. Several large in-kind projects are not captured in the balance of payments data properly. However, project aid that used to be classified as current transfers are now classified in the capital account.

Data on international investment position is published in IFS and BOPSY up to 2007. A foreign private capital survey (FPC) from DFI called “PRC CPE” is underway as in all Franc Zone countries. However, foreign assets of the private non banking sector are not well covered in the financial accounts as the surveys of residents’ foreign assets remain very partial, and no use is made of an existing alternative source, e.g., BIS statistics.

The April-May 2003 multi sector statistics mission found that the balance of payments compilation system is generally sound and encouraged the authorities to integrate banking settlement sources and disseminate the balance of payments within the recommended timeliness, as set by the GDDS. The first of these recommendations remains pending. Annual statistics on balance of payments are reported to STA on a regular basis, but with some delay.

In May 2013, the BECAO published a new methodology guide for the elaboration of the balance of payments and the global external position for the WAEMU countries that is consistent with the sixth edition of the IMF BOP Manual. Mali BOP is currently presented according to the new guide.

Poverty statistics

The PRS Annual Update identifies a key set of poverty indicators for monitoring of the PRS implementation.

Mali: Common Indicators Required for Surveillance

(As of April 30, 2015)

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Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability position vis-à-vis nonresidents.

Note: Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

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Cover IMF Staff Country Reports
Mali: Third Review Under the Extended Credit Facility Arrangement, Request for Waiver of Performance Criteria, and Request for Modification of Performance Criteria
Author:
International Monetary Fund. African Dept.
Volume/Issue:
Volume 2015: Issue 151
Publisher:
International Monetary Fund
ISBN:
9781513511801
ISSN:
1934-7685
Pages:
85
DOI:
https://doi.org/10.5089/9781513511801.002