IMF Executive Board Concludes 2010 Article IV Consultation with Mali

Public Information Notice (PIN) No. 10/96
July 23, 2010

Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.

On July 16, 2010, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Mali.1


As a landlocked Sahelian country of 14 million people, Mali has struggled to overcome low social indicators and high poverty rates. Since the democratic transition of the early 1990s, it has posted steady economic growth of around 5 percent per year. Macroeconomic stability is reinforced through membership in the West African Economic and Monetary Union (WAEMU). However, Mali’s dependence on a few export commodities and its susceptibility to drought and other natural disasters has left it highly vulnerable to economic shocks.

Macroeconomic performance has been generally good during the past two years. Mali’s agriculture-based economy has weathered the global economic storm well. Its growth rates have been among the highest in the WAEMU region in the last 5 years, and real gross domestic product (GDP) grew by 4½ percent in 2009. Goods harvests, reflecting favorable weather and supportive policies, have positively affected growth. The drop in crude oil and food prices have contributed to a sharp reduction in inflation. Fiscal performance in 2009 was slightly better than expected, but the targeted reduction in pending bills and domestic arrears was not fully achieved until March 2010. The external accounts benefited from buoyant gold prices and the decline in oil and food prices, as well as the equivalent of 5½ percentage points of GDP in exceptional external resources (privatization receipts and the Special Drawing Rights (SDR) allocations).

A number of structural reforms were carried out in 2009. Telecom provider SOTELMA was successfully privatized; a tender was launched to sell state cotton ginner CMDT; and progress was made in restructuring the housing bank, BHM, prior to a planned 2012 privatization. The new multidonor public financial management (PFM) reform program, PAGAM II, will be launched shortly, but previously-identified PFM reforms have continued.

Mali’s 2009 debt sustainability analysis, carried out jointly with World Bank staff, assessed Mali’s risk of debt distress to be low. However, that analysis identified a number of risks, notably the risk from the uncertain prospects from the mining sector and the risk from the potential debt burden should Mali choose to borrow abroad on nonconcessional terms.

Executive Board Assessment

Directors commended the authorities for their strong economic performance, supported by sound macroeconomic management and favorable harvests and export prices. Directors noted that continued commitment to prudent macroeconomic policies and structural reform will be necessary to reduce vulnerabilities, diversify the economy, and reduce poverty.

Directors supported a limited fiscal stimulus in 2010, focusing on public investment and other priority spending. In this context, they emphasized that further improvement in transparency in budget planning and execution is crucial. Directors regretted the build-up of pending bills, and recommended further efforts to strengthen cash management and address the long-standing issue of VAT credit arrears. They also encouraged further progress in broadening the tax base and improving revenue administration. Given the uncertainties surrounding Mali’s export prospects, Directors called on the authorities to devote particular attention to strengthening debt management to avoid the risk of debt distress.

Directors concurred that the continued strong implementation of structural reforms remains important to strengthen the economy’s competitiveness and raise growth potential. They noted the recent good progress in this area, but encouraged further efforts to enhance the business climate, improve the provision of financial services, and boost private sector-led growth.

Directors welcomed the authorities’ efforts to incorporate the 2008 FSAP recommendations into their financial sector development plans. They also commended the authorities for taking steps to strengthen the AML-CFT regime. Directors encouraged the authorities to strengthen statistical capacity, particularly in the area of public finance and balance of payments statistics.

Mali: Selected Economic and Financial Indicators, 2008–12

    2008 2009   2010   2011 2012
    Est. Prog.
3rd Review
Est.   Prog.
3rd Review
  Proj. Proj.
    (Annual percentage change)

National income and prices


Real GDP

  4.9 4.3 4.5   4.8 5.1   5.3 5.8

GDP deflator

  8.8 4.3 3.6   2.6 3.6   3.0 2.4

Consumer price inflation (average)

  9.1 2.2 2.2   1.2 2.1   2.6 2.8

External sector (percent change)


Terms of trade (deterioration -)

  -1.9 27.2 23.7   -8.4 6.6   4.3 -1.7

Real effective exchange rate (depreciation -)

8.0 0.3    

Money and credit (contribution to broad money growth)

Credit to the government

  -3.2 -7.6 -13.9   5.3 10.4   5.0 2.1

Credit to the economy

  5.2 5.6 7.2   6.9 5.7   5.4 6.7

Broad money (M2)

  0.5 15.3 16.0   10.5 16.7   9.4 8.2
    (in percent of GDP, unless otherwise stated)

Investment and saving


Gross domestic investment

  20.7 18.4 18.2   19.7 20.0   21.0 21.5

Of which: government

  5.7 6.8 6.7   7.2 7.5   7.6 7.2

Gross national savings

  7.8 12.2 8.6   11.7 12.1   11.8 12.4

Of which: government

  1.8 1.2 0.8   0.5 1.5   1.5 1.6

Gross domestic savings

  6.2 10.7 7.0   9.9 10.3   12.1 13.1

Central government finance



  15.5 16.6 17.1   16.9 16.9   17.0 17.2


  3.4 4.9 4.1   3.8 3.9   3.8 3.8

Total expenditure and net lending

  21.2 24.7 24.1   24.6 25.5   24.8 24.6

Overall balance (payment order basis, excluding grants)

-5.6 -8.0 -6.9   -7.7 -8.5   -7.8 -7.3

Basic fiscal balance 1

  -1.0 -1.8 -1.4   -1.6 -2.4   -2.0 -1.5

Underlying basic fiscal balance 2

  -1.0 -1.4 -0.8   -1.1 -1.1   -1.0 -1.0

External sector


Current external balance, including official transfers

-12.9 -6.1 -9.6   -8.0 -7.9   -9.1 -9.1

Current external balance, excluding official transfers

-14.1 -8.2 -11.9   -10.2 -10.2   -11.2 -11.2

Exports of goods and services

  28.5 27.5 26.0   26.8 28.9   30.6 31.3

Imports of goods and services

  -43.1 -35.2 -37.2   -36.6 -38.5   -39.5 -39.7

Debt service to exports of goods and services

4.0 4.0 4.2   4.0 3.7   2.3 2.3

External debt (end of period)

  19.1 20.2 19.3   22.2 24.2   26.1 27.9

Memorandum items:


Nominal GDP (CFAF billions)

  3,913 4,248 4,232   4,564 4,609   5,005 5,414

Overall balance of payments (US$ millions)

-10.3 419.6 448.0   -90.9 -44.1   -41.0 -38.7

Money market interest rate in percent (end of period)

6.8 ... ...   ... ...   ... ...

Gross international reserves (US$ millions)


Central Bank of West African States (BCEAO)

10,721 ... 13,631   ... ...   ... ...

in percent of broad money

  55.0 ... 58.7   ... ...   ... ...

in months of imports

  6.1 ... 6.9   ... ...   ... ...

BCEAO Mali (imputed) 3

  1,033 1,637 1,602   1,575 1,389   1,343 1,287

in percent of broad money

  48.6 64.4 60.6   56.3 51.5   45.8 40.8

US$ exchange rate (end of period)

  481.5 464.5 449.3    

Source: Malian authorities and IMF staff estimates and projections.

1 Revenue (excluding grants) less total expenditure excluding foreign financed investment projects and HIPC Initiative spending.

2 Basic fiscal balance excluding spending financed by privatization revenue.

3 For 2009, reflects new SDR allocation and privatization receipts of SOTELMA.

1 Under Article IV of the IMF's Articles of Agreement, the IMF holds discussions with each member, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here:


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