IMF approves 3year ECF arrangement for Mali, releases $27.4m

In its strategic plan for a strong and inclusive growth through job creation, economic diversification, and greater resiliency in Africa, the Executive Board of the International Monetary Fund (IMF) on Wednesday approved a new three-year arrangement under the IMF’s Extended Credit Facility (ECF) for Mali in the amount of SDR 139.95 million (about US$191.9 million).

Mr. Tao Zhang, Deputy Managing Director and Acting Chair, said that the Board also approved the release of the first disbursement under the arrangement of SDR 20 million (about US$27.4 million).

SEE Mali’s selected Economic and Financial Indicators for 016–23 IMF – MALI

Zhang, said that Mali has made significant progress under the previous Fund-supported program despite challenging conditions. “Looking ahead, while the economic outlook remains generally positive, it is subject to important downside risks related to possible challenges arising from the security situation, potential shocks to the terms of trade (the price of gold, cotton, and fuels), and adverse weather conditions”, he added.

In his word, “The authorities’ corrective measures taken in the first half of 2019 have significantly improved domestic revenue collection. Going forward, decisive efforts aimed at domestic resource mobilization through tax policy and revenue administration reforms will be key to meeting the ambitious, but realistic program targets. The fiscal framework of the program is robust and adequate mechanisms are in place to deal with any revenue shortfall.

“The authorities’ reform strategy for the state-owned electricity company (EDM-SA) is welcome in view of its strategic importance for the Malian economy.

Mr Tao Zhang, however, encouraged the Malian Government to seek participation from the commercial banks in the financial restructuring of the company.

“Going forward, it is essential to pursue greater spending efficiency, including through strengthened project selection and execution, as well as the rationalization of subsidies.

“The authorities’ efforts to increase financial inclusion and narrow the gender gap, including by direct measures to economically empower women are welcome. Steadfast perseverance in the government’s efforts to improve governance and fight corruption would also enhance the business climate.” He concluded.

Meanwhile, NEWSVERGE report that Mali is a fragile low-income country, struggling with insurgency, terrorism, and social tensions.

Implementation of the 2015 peace agreement remains challenging and the authorities have limited control over the North and Center regions. The country is subject to frequent terrorist attacks and increasing interethnic violence.

Mali’s human development indicators are among the lowest in the world and the security crisis has complicated the government’s ability to deliver basic social and poverty-reducing services.