For more information, see Mali and the IMF
Bamako, November 23, 1998
Mr. Michel Camdessus
Dear Mr. Camdessus:
1. The Executive Board of the International Monetary Fund approved on August 6, 1998 the third annual arrangement for Mali under the Enhanced Structural Adjustment Facility (ESAF). This arrangement was in support of Mali's economic and financial adjustment program for 1998–99 (April–March). In accordance with this arrangement, the government of Mali undertook a midterm review of the program with a Fund mission. The review broadly covered the progress made in implementing the program during the first nine months of 1998, as well as the outlook and economic and financial measures to be implemented by end-1998 and in early 1999. The government of Mali remains determined to implement the policies and measures described in the policy framework paper for 1998–2001, as well as in the memorandum attached to this letter, which supplements the memorandum of May 20, 1998.
2. All the quantitative performance criteria and indicators for end-September 1998 have been met. However, delays have occurred in implementing structural reforms. In particular, the performance criteria for end-September 1998 regarding completion of a technical audit of the Compagnie Malienne pour le Développement des Textiles (CMDT) and the inclusion in the draft 1999 Budget Law of reforms of indirect taxation, with a single-rate value-added tax of 18 percent, were not met.
3. We reached understandings on the economic and financial measures to be implemented in order to ensure achievement of the economic objectives of the program for 1998–99. In particular, the technical audit of the CMDT and the submission to the National Assembly of a draft law on reforms of indirect taxation, with a VAT at a single rate of 18 percent, will be achieved before completion of the midterm review. Furthermore, the draft budget for 1999, submitted to the National Assembly, is in line with the program targets. Based on these indications, we request that the appropriate waivers be granted in the context of the completion of the midterm review.
Chevalier de l'Ordre National
Memorandum on Economic and Financial Policies for 1998–99
November 23, 1998
1. The economic and financial program for 1998–99 was prepared within the framework of the medium-term adjustment strategy described in the 1998–2001 policy framework paper (PFP), which takes into account the encouraging results of the preceding programs. This strategy aims at ensuring sustainable economic growth, achieving domestic and external financial viability over the medium term, and reducing poverty, through the implementation of rigorous fiscal and monetary policies, as well as the acceleration and deepening of structural reforms. The main macroeconomic objectives for 1998 and 1999 were to achieve an annual real GDP growth rate of 5 percent, so as to raise per capita income by about 2 percent per annum; to limit the average inflation rate to 2–3 percent per annum; and to reduce the external current account deficit (excluding official transfers) from 9.3 percent of GDP in 1997 to 8.6 percent in 1999. The program also aimed at raising the investment ratio from 23.3 percent of GDP in 1997 to 25.5 percent in 1999, which would call for an increase in the domestic savings ratio of about 2½ percentage points of GDP to attain 16.3 percent by 1999.
2. Economic and financial developments during the first nine months of the year were positive on the whole. Despite a decline in grain production as a result of unfavorable weather conditions, activity in the secondary and tertiary sectors was sustained. The 1997/98 seed cotton crop is estimated at 522,903 tons, a 15.7 percent increase over the previous crop year. Inflation, which had remained moderate in the first quarter of the year, rose in the following months owing to the rise in food prices resulting from the poor grain harvest. For this reason, the harmonized consumer price index for Bamako1 rose by 7.3 percent on a year-to-year basis from September 1997 to September 1998. In the external sector, the volumes of cotton and gold exports were sustained in 1998, while imports rose moderately and in line with the projections. The Asian crisis so far has not had a significant impact on the volume of Mali's exports. However, it has caused some delays in shipments of cotton fiber, and there has been a decline in export prices for the 1998/99 cotton crop, which has been partly offset by lower petroleum import prices. Disbursements of foreign budgetary assistance were below the amount programmed for the first three quarters of 1998, mainly because of administrative delays. This shortfall, combined with the impact of cotton fiber shipping delays and the nonrepatriation of gold export proceeds, led to a decline in the net foreign assets of the banking system.
3. As indicated in Table 1, the quantitative performance criteria for end-September 1998 were all met, in some cases by considerable margins. The quantitative indicators were also respected. Fiscal revenue exceeded the target and the government wage bill was kept below the program ceiling. Thus, the basic fiscal surplus (on a commitment basis, excluding grants and foreign-financed capital outlays) considerably exceeded its target. However, the implementation of structural reforms was mixed (Table 2). The submission of a restructuring plan for the Banque Internationale pour le Mali (BIM-SA) to the WAMU Banking Commission, a performance criterion for end-September, as well as the signing of a contract for the concession of the Hôtel de l'Amitié and the reimbursement by the Compagnie Malienne pour le Développement des Textiles (CMDT) of the sums borrowed from the Cotton Sector Stabilization Fund, benchmarks for end-November 1998, were observed. Regarding the structural performance criterion for end-September on the inclusion in the draft 1999 Budget Law of the reform of the system of direct and indirect taxation, a draft law on the reform of direct taxation was submitted to the National Assembly in September. However, the inclusion in the draft 1999 Budget Law of reforms of indirect taxation, with a single-rate value-added tax (VAT) of 18 percent, was not accomplished and is still under way. The structural performance criterion for end-September regarding the completion of the technical audit of the CMDT was also not met. Finally, the sale of the government's minority share holdings in four enterprises,2 a benchmark for end-October 1998, has been delayed.
4. Fiscal performance through end-September 1998 was better than foreseen. Total government revenue exceeded the target, while expenditures were kept within the program limits. Tax revenue, at CFAF 162 billion, exceeded the target by 8 percent, on account of the good performance of taxes on international trade, mainly reflecting the implementation of the drawback system applicable to petroleum imports, and the higher-than-foreseen receipts of income tax and VAT, in line with the sustained economic activity.
5. Government expenditure through end-September 1998 was broadly kept within the program limits. Current spending was less than projected by about CFAF 12 billion (10 percent), as a result of lower spending on goods and services and interest payments, as well as a slower rate of spending on the social safety net. The wage bill was also kept below the indicative ceiling because of the lower cost of promotions, the delay of recruitments into the civil service, and savings resulting from the audit of civil service and Central Payroll Office files. In July, the government granted a 5 percent general wage increase, as programmed. Despite the postponement of the elections for the 682 new communes until April 1999, most of the related expenditures have already been made. Capital spending was also less than projected due to a slower-than-anticipated execution of the foreign-financed investment program. As a result of these developments, the overall fiscal deficit (on a commitment basis and excluding grants) at end-September 1998 stood at CFAF 50.5 billion, well below the CFAF 94.8 billion programmed. In addition, verified domestic payments arrears were reduced by CFAF 8.3 billion—a little more than the target for end-September 1998—and no new payments arrears were incurred. Finally, the government's obligations as a result of court rulings rose sharply.
6. Significant reforms are in preparation for the fiscal area and, on the whole, are progressing on schedule. A tariff reform, pursuant to the introduction of a common external tariff (CET) by the member countries of the WAEMU, will be implemented in two stages by 2000. This reform involves merging the customs duty and the fiscal duty into a single customs duty, and reducing tariff protection through the introduction of four rates.3 The potential customs revenue loss is estimated at 0.2 percent of GDP in 1999 and about 0.9 percent of GDP in 2000. From January 1, 1999, Mali will also adopt a tariff classification that reflects the WAEMU proposals. On intracommunity trade, the tariff reduction for approved industrial products of origin will be raised to 80 percent of the rates applicable to third countries in 1999, and customs duties will be eliminated in 2000. Agricultural products and traditional handicrafts are already exempt from entry duties.
7. To modernize the tax system and to offset the revenue loss incurred through the introduction of the CET, the authorities are restructuring domestic taxes and are continuing to improve the customs and tax administrations. The proposed measures include: (i) a reform of direct taxation; (ii) the replacement of the two-rate VAT, the tax on the provision of services (TPS) and the contribution for the provision of services (CPS) on imports by a single-rate VAT of 18 percent; (iii) the strengthening of the monitoring of large taxpayers; and (iv) the reduction of exemptions. Regarding the reform of direct taxation, the draft law submitted to the National Assembly involves: (i) the elimination of the progressive surtax in the form of the general income tax (IGR) and the introduction of a single, proportional schedular tax on current income, including the tax on industrial and commercial profits (BIC); (ii) the application of a global tax for taxpayers whose annual turnover before tax does not exceed CFAF 30 million; and (iii) the introduction of a tax on wages and salaries (ITS) at progressive rates and withheld at the source. To strengthen the VAT administration, the turnover threshold for taxpayers monitored by the Large Enterprise Division (DGE) was lowered from CFAF 300 million to CFAF 200 million in June 1998. Taxpayer compliance has been enhanced by extending registration on the basis of a single fiscal number for each taxpayer, which allows for better crosschecks of tax files between the customs and tax administrations. However, there has been some delay in submitting the reforms of indirect taxation to the National Assembly, partly because of the technical and legal preparatory work required, and partly because of national consultations and the WAEMU's own discussion on the harmonization of indirect taxation and the coverage of the single-rate VAT, especially as regards agricultural inputs. In this connection, a Fund tax expert spent some time in Bamako in 1998.
8. With weaker-than-expected money demand during the first three quarters of 1998, broad money declined by 0.8 percent from end-1997. As a result of the good fiscal performance, net credit to the government rose by less than 1 percent of the beginning-of-period money stock, compared with a 4.3 percent increase foreseen in the program. At the same time, credit to the economy rose by 7.4 percent, compared with an anticipated increase of 13.2 percent. As a result, the net foreign assets of the banking system fell by 9.2 percent of the beginning-of-period money stock, and Mali's contribution to the BCEAO's foreign reserves account declined. In view of the pressures on the price level and the size of transfers abroad by banks in the WAEMU area, as well as in order to better be able to control bank liquidity, the BCEAO raised, as of August 16, 1998, the reserve ratio for Malian banks from 1.5 percent to 9 percent. On August 31, 1998, the BCEAO also raised its repurchase and discount rates by ¼ of 1 percentage point to 5.75 percent and 6.25 percent, respectively. Interest rates on the money market have also risen slightly since the beginning of the year, reaching 4.75 percent in mid-October 1998, although without affecting the banks' prime rate, which remains above 9 percent. The banks' lending rates, including for investment financing, range from 11 percent to 15 percent, which is high in real terms.4
9. The health of the Malian banking system has improved on the whole since 1994, and most banks showed a profit in 1997. However, the banks' situation remains fragile, and a number of banks have failed to comply with some of the WAMU Banking Commission's prudential ratios. Despite a reduction during the first half of the year, the amount of gross nonperforming loans remains significant, representing about 28 percent of the banks' portfolio of credit to the economy. Provisions cover almost 66 percent of this amount. The restructuring of BIM-SA based on the proposals submitted to the WAMU Banking Commission continues, but it will not be completed before the end of the year as scheduled. Similarly, the call for bids for the privatization of the Banque Malienne de Crédit et de Dépôts (BMCD), a structural benchmark for end-December 1998, is now planned for 1999.
10. Regarding the other structural reforms, a number of measures have been taken as planned, including the launching last June of a call for bids for the privatization of the Société Nationale des Tabacs et Allumettes du Mali (SONATAM) and the signing in June of the concession contract for the Hôtel de l'Amitié. The new charter of the Malian Chamber of Commerce and Industry has been put, in place and elections for the appointment of new adjudicators for the commercial courts took place on November 14, 1998. The government has started implementing the OHADA5 uniform act on collateral, thereby facilitating the enforcement of contractual obligations relating to guaranteed bank loans. However, the completion of the technical audit of the CMDT, a structural performance criterion for end-September 1998, was delayed because the preparatory work took longer than anticipated. The purpose of this audit is to thoroughly examine all aspects of the cotton sector and to identify the practical measures to be taken to bring about productivity gains and to raise the income levels of producers. This audit should also enable the government, in cooperation with the World Bank and the Fund, to define its position regarding increasing competition and participation of the private sector in this sector. Finally, the technical audit should serve as the basis for negotiating the new performance contract among the CMDT, the government, and the producers, which ought to have entered into force on October 1, 1998. As things stand, the government has already taken steps to ensure that this audit will be completed as soon as possible.
11. Based on the encouraging results obtained in the first three quarters of 1998, the government will continue to resolutely implement all the macroeconomic and structural measures needed to achieve the objectives of the program for 1998 and 1999. Following the decline in grain production, the growth of real GDP in 1998 is estimated at about 4.5 percent, as against the 5.4 percent rate foreseen under the program. Growth prospects remain favorable, particularly in agriculture owing to better rainfall, and the growth rate of real GDP could reach 5.5 percent in 1999, which is higher than the initial target. The rise in prices observed until August should be partially reversed, owing to an increase in supplies of foodstuffs beginning in September. The average inflation rate, as measured by the harmonized consumer price index for Bamako, should be kept at about 4 percent in 1998, before declining to about 2-3 percent in 1999. In the external sector, cotton export receipts are expected to increase as a result of the anticipated expansion in output and despite a slight decline in international prices, while gold exports are projected to increase more than anticipated. The growth of imports should remain moderate, while import prices for petroleum have declined. The external current account deficit (excluding official transfers) should therefore drop from 8.8 percent of GDP in 1998 (compared with a programmed 9.8 percent) to 8.5 percent in 1999. On the basis of existing commitments of external financial assistance and taking account of sizable transfers abroad in 1998, the overall balance of payments should register a deficit of CFAF 6.8 billion in 1998 and a surplus of CFAF 2.5 billion in 1999. The net foreign assets of the banking system are estimated to decline in 1998, but will increase by about CFAF 19 billion in 1999.
12. In the fiscal area, the government intends to consolidate the results obtained through September 1998, so as to bring the overall fiscal deficit (on a commitment basis and excluding grants) to 7.5 percent of GDP in 1998, in line with the program. The basic fiscal surplus is estimated at 1.3 percent of GDP. Although government revenue in the first three quarters was higher than forecast, the government is aware that it must not relax its revenue mobilization efforts. On this basis, the initial program objective of CFAF 245.1 billion in total government revenue for 1998 will be achieved.6 A continued tight policy stance will enable the government to keep total expenditure within the limit initially set for 1998. The wage bill will thus be lower than the programmed CFAF 60.3 billion. With the recruitment of 679 teachers and 250 health sector employees, the share of the social sectors in current expenditure should reach 33.9 percent, of which 23.9 percent for education and 10 percent for health, as initially envisaged. Expenditure on the social safety net will be fully executed. The 1998 tranche of the three-year public investment program for 1998–2000 should be executed as planned. Finally, the reduction of extrabudgetary arrears should continue, and no payments arrears will be accumulated.
13. The draft budget for 1999 calls for a reduction in the overall fiscal deficit (on a commitment basis and excluding grants) to 6.8 percent of GDP and a basic fiscal surplus of 1.6 percent of GDP. These objectives are in line with the initial projections, with the exception of the unanticipated expenses, equivalent to 0.4 percent of GDP, resulting from the postponement of elections for 682 new communes, the need for a transfer to these communes to cover their initial operating outlays, and the inclusion in the budget of a provision to discharge the obligations arising from court rulings.
14. Total revenue in 1999 is projected to be CFAF 277.7 billion, or 16.1 percent of GDP, while tax receipts will reach the equivalent of 14.4 percent of GDP. To achieve these objectives and offset the revenue losses resulting from the implementation of the first phase of the CET, the government is determined to implement the domestic tax reform as soon as possible. In particular, the government will submit, before the presentation of the documentation to the Executive Board of the Fund, a draft law to the National Assembly on replacing the two-rate VAT, the TPS, and the CPS on imports (excluding agricultural inputs) with a single-rate VAT at 18 percent, as well as on shortening the list of goods exempt from the VAT. In addition, the government will take measures to increase the efficiency of the customs and tax administrations, in line with the recommendations of the recent Fund technical assistance mission. At customs, the emphasis will be placed on establishing the new customs code; improving the procedures for handling goods in transit and in bonded warehouses; strengthening first-line inspections; eliminating any remaining exemptions not based on international agreements; and developing a valuation database. In the area of tax administration, the efforts currently under way to broaden the tax base will be stepped up through the generalization of the new fiscal registration system; the improvement of the processing of large taxpayer files by the DGE; the strengthening and computerization of the VAT administration; and the follow-up of delinquent taxpayers. In addition, consideration is being given to replacing the exemptions applicable to government contracts with a system of refunds of taxes paid on these purchases. To ensure the better implementation of all these reforms, the authorities have asked the Fund for another short-term technical assistance mission.
15. Total government expenditure and net lending in 1999 is set at CFAF 395.3 billion (equivalent to 22.9 percent of GDP), which is slightly higher than initially foreseen. The wage bill will be kept at CFAF 65.3 billion (3.8 percent of GDP), below the initial target. With the recruitment of 700 teachers and 200 health sector employees, the social sectors will continue to receive preferential treatment, and their share of current expenditure will reach 35.9 percent, of which 25.2 percent for education and 10.7 percent for health. The government is determined to limit spending on the communal elections to CFAF 3 billion and to strictly control the costs related to decentralization. The settlement of the government's obligations with respect to the extrabudgetary payments arrears will be completed in 1999. At the same time, the government's Legal Services Unit will be strengthened so as to reduce the impact on the budget of the enforcement of court rulings, and all of the government's legally mandated payments obligations will be included in the budget and paid as a current expenditure. An actuarial study of the Caisse de Retraite du Mali (CRM) will be conducted by June 1999, in order to identify measures to be taken to reduce its structural deficit. Finally, the government, in consultation with the World Bank, will adopt before end-1998 a three-year public investment program for 1999–2001, which will reflect the increase in the share of domestically financed expenditure and give priority to the agriculture and infrastructure sectors. The efforts to improve programming and monitoring of public investment will be stepped up.
16. The regional monetary policy conducted by the BCEAO will remain prudent and consistent, with the objective of maintaining a fixed exchange rate between the CFA franc and the French franc and, as of January 4, 1999, between the CFA franc and the euro, as well as of consolidating the Union's external position. Together with the other WAEMU member states, Mali will support the monetary authorities' efforts to improve the indirect monetary policy instruments, in particular the flexible interest rate policy, and to strengthen the functioning of the interbank and money markets. According to the new projections, broad money in Mali will increase by about 4.8 percent in 1998. Based on export receipts and disbursements of external assistance expected toward the end of the year, the decline in net foreign assets of the banking system would be limited to 1.5 percent of the end-1997 money stock. Net domestic assets of the banking system will increase by 5.7 percent of the end-1997 money stock, owing to the anticipated reduction in net credit to the government and an increase of about 5 percent in credit to the economy. In 1999, the rate of growth of broad money will be about 9 percent, in line with nominal GDP growth. Based on the fiscal consolidation efforts under way, the net position of the government vis-à-vis the banking system should improve further, leaving adequate room for expansion of credit to the economy of about 7 percent. Under these circumstances, Mali's contribution to the net foreign assets of the BCEAO is expected to increase in 1999.
17. The authorities are resolved to improve financial intermediation and the health of the banking system. To this end, they will prepare, by end-March 1999 and in consultation with the staffs of the IMF and World Bank, an action plan based on the recommendations of the Groupe de Réflexion sur le Secteur Financier, especially regarding the strengthening of the legislative and judicial framework, the reduction of the level of nonperforming loans, and the divestiture of the government's interests in the sector. The government will strongly support the implementation of a short-term program aimed at ensuring compliance with the prudential ratios set by the WAMU Banking Commission. The elimination of the authorization of the Minister of Justice for foreclosures on mortgages will be in effect by end-December 1998, and the government will ensure that the OHADA uniform act on collateral is strictly applied. The process of divesting the government's interests in the banking sector will be stepped up. The government is determined to complete the restructuring of BIM-SA by June 30, 1999, based on the audit conducted in July 1998. The call for bids for the opening of the capital of the BMCD will be launched no later than June 30, 1999. The WAEMU regional stock exchange, which began operations in Abidjan on September 16, should improve the efficiency of financial intermediation. Finally, the government will carefully monitor the development and solvency of microfinance institutions.
18. The structural reforms envisaged under the program will be continued. In the public enterprise sector, the privatization of SONATAM, and the sale of the government's minority interests in SOMACO-SA, MALITAS, SMPC, and SEMA-SA will be completed by June 1999. The plans to privatize Energie du Mali (EDM) and the Société des Télécommunications du Mali (SOTELMA) are being implemented, as per the agreements with the World Bank. The privatization law for EDM will be submitted to the National Assembly by end-December 1998, and the call for bids will be issued by end-June 1999. The law opening up the telecommunications sector will be submitted to the National Assembly in March 1999, and the call for bids for the privatization of SOTELMA will be launched in 2000, as initially planned. In cooperation with the government of Senegal, the government of Mali will intensify its efforts to start up before the end-1999 deadline the Société d'Exploitation du Trafic International (SETI), a majority privately owned company that will manage the Bamako-Dakar railway line. The National Privatization Commission will be effectively in place by end-December 1998. Following this, the government will prepare a final action plan for the public enterprise sector covering the period 1999–2001. Finally, the authorities will continue to update the economic and financial data on the 35 public enterprises currently remaining in the government's portfolio.
19. In the cotton sector, the government will complete the technical audit of the CMDT by end-December 1998, in accordance with the above-mentioned objectives. Pending the results of the audit, the current performance contract will be extended to ensure the smooth progression of the current crop year. In the meantime, the floor purchase price for seed cotton has been increased from CFAF 140 per kilogram to CFAF 145 per kilogram for the current crop year. Thus, the producer price, including the profit share, increases from CFAF 170 per kilogram to CFAF 185 per kilogram. Particular attention will continue to be paid to the management of the financial resources of the Cotton Sector Stabilization Fund.
20. To better develop the private sector and increase investment, the government is convinced of the critical importance of creating a legal and judicial system that is more reliable, impartial, and transparent, and of streamlining the regulatory framework. In this context, the government will endeavor to prepare an action plan based on the recommendations of the analysis of the procedures required of investors that was conducted by the World Bank's Foreign Investment Advisory Service, in order to identify the practical obstacles facing potential investors. Likewise, the government will identify and implement measures that will improve the business and investment climate.
21. The policy of prudent external debt management will be pursued, and the government will have recourse only to grants or concessional loans. To this end, the government will refrain from contracting or guaranteeing new external loans with a grant element of less than 35 percent, with the exception of nonconcessional loans within the ceiling set in Table 1, normal short-term, import-related credits, and loans relating to the rescheduling or refinancing of the external debt. In addition, all new loans contracted or guaranteed by the government will continue to be subject to the prior authorization of the Minister of Finance. The government will meet its public debt obligations at the set due dates and will accumulate no external or domestic payments arrears.
22. In the context of the Initiative for Heavily Indebted Poor Countries (HIPC Initiative), the achievement of the target of 200 percent for the ratio of the net present value (NPV) of the public external debt to exports of goods and nonfactor services, which was approved for Mali in September 1998 by the Executive Boards of the IMF and the World Bank, requires additional debt relief from bilateral creditors. The authorities have approached these creditors to secure the additional relief, which is estimated at US$6.4 million in NPV terms.
23. The authorities will continue to actively participate in all initiatives to promote regional integration, especially in the areas of the modernization of business law, the harmonization of the regional investment codes, the development of the regional financial market and the implementation of monetary policy through indirect policy instruments, the harmonization of external tariffs and indirect taxes, and the elimination of nontariff barriers to foreign trade.
24. In the area of economic and social statistics, the authorities have taken measures to improve the coverage and quality of the national accounts. They are also strengthening the monitoring of public investment and the compilation of balance of payments statistics, and ensuring the timely availability of monetary statistics. They will revitalize the role of the statistical coordination committee by taking legal steps against economic agents who do not provide the required information by the set deadlines. The government is also taking appropriate measures to deal with the Y2K problem.
25. The Malian government considers that the measures and reforms described in this memorandum, which supplements the memorandum of May 20, 1998, will make it possible to attain the program objectives for 1998–99. In particular, it will make sure to (i) complete the technical audit of the CMDT in accordance with the objectives by end-December 1998; and (ii) submit a draft law to the National Assembly on indirect taxation reform, including a single-rate VAT at 18 percent, before presentation of the documentation to the Executive Board of the Fund. In addition, a technical committee comprising representatives of the various ministries involved in the execution of the program will be established to ensure that all the envisaged reforms are successfully implemented. The government will take any additional measures necessary to achieve the program objectives. At the end of this third annual arrangement, the government of Mali would like to obtain a new ESAF from the IMF in continued support of the next phase of the reform efforts, which is aimed at consolidating the progress made and at strengthening the foundations for higher and sustainable economic growth, so as to significantly reduce unemployment and poverty.
1Mali has recently adopted a harmonized consumer price index, in line with the price indexes used by the other member countries of the West African Economic and Monetary Union (WAEMU).
2Société Malienne des Conserves, SA (SOMACO-SA); Mali-Tombouctou Air Service (MALITAS ); Société Malienne de Produits Chimiques (SMPC); and Société d'Equipement du Mali, SA (SEMA-SA).
3Except for the zero percent rate, these rates will be capped in 1999 at 5 percent, 10 percent, and 25 percent, and fixed in 2000 at 5 percent, 10 percent, and 20 percent, respectively, with, in addition, a statistical tax of 1 percent as of 2000.
4The new law on usury was adopted by the National Assembly in July 1998, setting the usury rate, as in the other WAEMU member countries, at 18 percent for banks and 27 percent for other financial institutions.
5Organization for the Harmonization of Business Law in Africa.
6This amount is equivalent to 15.3 percent of GDP. Taking account of the revenue of the communes of CFAF 6.8 billion, this ratio rises to 15.8 percent of GDP.