A mission from the International Monetary Fund (IMF), led by Christian Josz, visited Bamako from March 6 to 19 for discussions in preparation of the first review of the government’s economic program supported under the IMF’s Extended Credit Facility (ECF) approved in December 2013.
The mission met with Oumar Tatam Ly, Prime Minister; Ms. Bouaré Fily Sissoko, Minister of Economy and Finance; Frankaly Keita, Minister of Energy and Water; Madani Touré, Deputy Minister for Budget; Malick Alhousseini, Deputy Minister for Decentralization; Moustapha Ben Barka, Deputy Minister for Investment Promotion and Private Initiative; Konzo Traoré, National Director, Central Bank of West African States (BCEAO); and representatives from the National Assembly, civil society, unions, the private sector, and Mali’s development partners.
At the conclusion of the mission, Mr. Josz issued the following statement:
“During 2013, Mali emerged from the political and security crisis of 2012. The manufacturing and service sectors rebounded by 6 and 9 percent, respectively, owing to an improvement in the security situation, the success of the presidential and legislative elections, and the resumption of donor support. However, the agricultural sector contracted by 7 percent because of unfavorable rainfall and a weaker harvest after the bumper crop in 2012. As a result, the mission estimates that real gross domestic product (GDP) grew by only 1.7 percent compared to the 5.1 percent anticipated six months ago. In 2014, assuming the next harvest turns out average, real GDP should grow by 6.5 percent. Average inflation in 2013 was slightly negative (-0.6 percent), but in 2014 the poor harvest may push it above 3 percent.
“Mali’s performance under the economic program supported by the IMF’s ECF is on track, with the exception of tax revenue, which, in 2013, was 5 percent lower than programmed. The tax revenue underperformance is explained in part by lower gold prices and weaknesses in tax administration. The mission notes that the revenue shortfall in 2013 was compensated by an under-execution of the budget. Thanks to this prudent policy the fiscal balance targets for 2013 were met. Public financial management reforms are on track. The mission welcomes the steps that the government has already taken to strengthen management at the tax administration and limit tax exemptions, with the objective of safeguarding its objective of raising tax revenue by 0.5 percent of GDP in 2014.
“The mission welcomes the Government’s intention to present to the National Assembly a corrective budget for 2014. This will replace the 2014 budget as the basis for the ECF program. It integrates additional external aid as well as several new spending items. The mission supports this budget, which targets a global deficit of 5 percent of GDP, financed largely with donor support, and for the rest in the regional financial market. The mission also welcomes the strengthening of structural reforms, notably those aimed at improving revenue collection.
“Discussions are well advanced and will continue in two weeks in Washington during the IMF-World Bank Spring Meetings. The aim is for the IMF Executive Board to discuss the review in June 2014.
“The mission would like to thank the authorities for the excellent organization, the provision of ample information, and the frank and fruitful discussions.”