Mali: Requests for Disbursement Under the Rapid Credit Facility and for Rephasing of Access Under the Extended Credit Facility Arrangement—Debt Sustainability Analysis
Author:
International Monetary Fund. African Dept.
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Publication Date:
08 May 2020
eISBN:
9781513543079
Language:
English
Keywords:
ISCR; CR; financing; emergency financing request; financing needs; IMF lending tracker; financing gap; RCF disbursement; Stress testing; Credit; Debt service; West Africa; Global; burden indicator; dynamics equation; sustainability framework; creating flow; debt stock; Debt sustainability analysis; Public and publicly-guaranteed external debt
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Requests for Disbursement Under the Rapid Credit Facility and Rephasing of Access Under the Extended Credit Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Mali

Abstract

Requests for Disbursement Under the Rapid Credit Facility and Rephasing of Access Under the Extended Credit Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Mali

Mali Joint Bank-Fund Staff Debt Sustainability Analysis1

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Under the COVID-19 baseline, Mali’s risk of external and total public debt distress remains moderate – unchanged from the previous analysis (IMF Country Report/19/289). Overall public debt dynamics remain sustainable with some space to absorb shocks. A large share of fiscal and external financing needs is expected to be covered by concessional multilateral and bilateral creditor loans. All the projected external debt burden indicators remain below their thresholds under the baseline. However, applying judgment to take account of security challenges and sensitivity to small changes in financing terms, the ratio of external debt service to exports exceeds its threshold in the case of an extreme shock to exports under a customized scenario that incorporates 2 percentage points of GDP larger fiscal deficits.

Mali’s main challenge continues to be ensuring macroeconomic stability while protecting social and investment spending and providing for growing security spending and large development needs especially given additional vulnerabilities arising from the COVID-19 Pandemic. To maintain sustainable level of debt, it is essential that the authorities continue their efforts to mobilize domestic revenue and implement reforms. Debt management capacity should be strengthened while deepening structural reforms to diversify the exports base.

Figure 1.
Figure 1.

Mali: Indicators of Public and Publicly Guaranteed External Debt Under Alternative Scenarios, 2020–30

Citation: IMF Staff Country Reports 2020, 153; 10.5089/9781513543079.002.A002

Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio in or before 2030. The stress test with a one-off breach is also presented (if any), while the one-off breach is deemed away for mechanical signals. When a stress test with a one-off breach happens to be the most exterme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented.2/ The magnitude of shocks used for the commodity price shock stress test are based on the commodity prices outlook prepared by the IMF research department.
Figure 2.
Figure 2.

Mali: Indicators of Public Debt Under Alternative Scenarios, 2020–30

Citation: IMF Staff Country Reports 2020, 153; 10.5089/9781513543079.002.A002

Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio in or before 2030. The stress test with a one-off breach is also presented (if any), while the one-off breach is deemed away for mechanical signals. When a stress test with a one-off breach happens to be the most exterme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented.
Figure 3.
Figure 3.

Mali: Drivers of Debt Dynamics – Baseline Scenario

Citation: IMF Staff Country Reports 2020, 153; 10.5089/9781513543079.002.A002

1/ Difference between anticipated and actual contributions on debt ratios.2/ Distribution across LICs for which LIC DSAs were produced.3/ Given the relatively low private external debt for average low-income countries, a ppt change in PPG external debt should be largely explained by the drivers of the external debt dynamics equation.Sources: Country authorities and staff estimates and projections.
Figure 4.
Figure 4.

Mali: Indicators of Public and Publicly Guaranteed External Debt Under Customized Scenarios, 2020–30

Citation: IMF Staff Country Reports 2020, 153; 10.5089/9781513543079.002.A002

Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio in or before 2030. The stress test with a one-off breach is also presented (if any), while the one-off breach is deemed away for mechanical signals. When a stress test with a one-off breach happens to be the most exterme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented.2/ The magnitude of shocks used for the commodity price shock stress test are based on the commodity prices outlook prepared by the IMF research department.
Figure 5.
Figure 5.

Mali: Indicators of Public Debt Under Customized Scenarios, 2020–30

Citation: IMF Staff Country Reports 2020, 153; 10.5089/9781513543079.002.A002

Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio in or before 2030. The stress test with a one-off breach is also presented (if any), while the one-off breach is deemed away for mechanical signals. When a stress test with a one-off breach happens to be the most exterme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented.
Figure 6.
Figure 6.

Mali: Realism Tools

Citation: IMF Staff Country Reports 2020, 153; 10.5089/9781513543079.002.A002

Sources: Country authorities and staff estimates and projections.
Figure 7.
Figure 7.

Mali: Qualification of the Moderate Risk Category. 2019–29 1/

Citation: IMF Staff Country Reports 2020, 153; 10.5089/9781513543079.002.A002

Sources: Country authorities; and staff estimates and projections.1/ For the PV debt/GDP and PV debt/exports thresholds, x is 20 percent and y is 40 percent. For debt service/Exports and debt service/revenue thresholds, x is 12 percent and y is 35 percent.
Table 1.

Mali: External Debt Sustainability Framework, Baseline Scenario, 2017–40

(In percent of GDP, unless otherwise indicated)

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Sources: Country authorities; and staff estimates and projections. 1/ Includes both public and private sector external debt 2/ Derived as [r – g – p(1 + g)]/(1+g+p+gp) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and p = growth rate of GDP deflator in U.S. dollar terms. 3/ Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes 4/ Current-year interest payments divided by previous period debt stock. 5/ Defined as grants, concessional loans, and debt relief. 6/ Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt). 7/ Assumes that PV of private sector debt is equivalent to its face value. 8/ Historical averages are generally derived over the past 10 years, subject to data availability, whereas projections averages are over the first year of projection and the next 10 years
Table 2.

Mali: Public Sector Debt Sustainability Framework, Baseline Scenario, 2017–40

(In percent of GDP, unless otherwise indicated)

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Sources: Country authorities; and staff estimates and projections. 1/ Coverage of debt: The central government. Definition of external debt is Currency-based. 2/ The underlying FV of external debt-to-GDP ratio under the public DSA differs from the external DSA with the size of differences depending on exchange rates projections. 3/ Debt service is defined as the sum of interest and amortization of medium and long-term, and short-term debt. 4/ Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of the last period and other debt creating/reducing flows 5/ Defined as a primary deficit minus a change in the public debt-to-GDP ratio ((-): a primary surplus), which would stabilizes the debt ratio only in the year in question. 6/ Historical averages are generally derived over the past 10 years, subject to data availability, whereas projections averages are over the first year of projection and the next 10 years
Table 3.

Mali: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2020–30

(In percent)

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Sources: Country authorities; and staff estimates and projections.

A bold value indicates a breach of the threshold.

Variables include real GDP growth, GDP deflator (in U.S. dollar terms), non-interest current account in percent of GDP, and non-debt creating flows.

Includes official and private transfers and FDI.

Table 4.

Mali: Sensitivity Analysis for Key Indicators of Public Debt, 2020–30

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Sources: Country authorities; and staff estimates and projections.

A bold value indicates a breach of the benchmark.

Variables include real GDP growth, GDP deflator and primary deficit in percent of GDP.

Includes official and private transfers and FDI.

1

Public debt coverage remains the central government debt, which is unchanged from the previous DSA.

2

Mali’s composite indicator is 3.02 based on October 2019 WEO and the 2018 CPIA, confirming the medium debt carrying capacity from the previous DSA.

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Cover IMF Staff Country Reports
Mali: Requests for Disbursement Under the Rapid Credit Facility and Rephasing of Access Under the Extended Credit Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Mali
Author:
International Monetary Fund. African Dept.
Volume/Issue:
Volume 2020: Issue 153
Publisher:
International Monetary Fund
ISBN:
9781513543079
ISSN:
1934-7685
Pages:
44
DOI:
https://doi.org/10.5089/9781513543079.002
  • Figure 1.
    View in gallery
    Figure 1.

    Mali: Indicators of Public and Publicly Guaranteed External Debt Under Alternative Scenarios, 2020–30

  • Figure 2.
    View in gallery
    Figure 2.

    Mali: Indicators of Public Debt Under Alternative Scenarios, 2020–30

  • Figure 3.
    View in gallery
    Figure 3.

    Mali: Drivers of Debt Dynamics – Baseline Scenario

  • Figure 4.
    View in gallery
    Figure 4.

    Mali: Indicators of Public and Publicly Guaranteed External Debt Under Customized Scenarios, 2020–30

  • Figure 5.
    View in gallery
    Figure 5.

    Mali: Indicators of Public Debt Under Customized Scenarios, 2020–30

  • Figure 6.
    View in gallery
    Figure 6.

    Mali: Realism Tools

  • Figure 7.
    View in gallery
    Figure 7.

    Mali: Qualification of the Moderate Risk Category. 2019–29 1/

Figure 1.

Mali: Indicators of Public and Publicly Guaranteed External Debt Under Alternative Scenarios, 2020–30
Figure 2.

Mali: Indicators of Public Debt Under Alternative Scenarios, 2020–30
Figure 3.

Mali: Drivers of Debt Dynamics – Baseline Scenario
Figure 4.

Mali: Indicators of Public and Publicly Guaranteed External Debt Under Customized Scenarios, 2020–30
Figure 5.

Mali: Indicators of Public Debt Under Customized Scenarios, 2020–30
Figure 6.

Mali: Realism Tools
Figure 7.

Mali: Qualification of the Moderate Risk Category. 2019–29 1/