IMF First Deputy Managing Director John Lipsky's Statement at the Conclusion of his Visit to Mali, November 8-10, 2006Press Release No. 06/250
November 10, 2006
Mr. John Lipsky, the First Deputy Managing Director of the International Monetary Fund (IMF), made the following statement today in Bamako at the conclusion of his visit to Mali:
"This is my first visit to Mali as First Deputy Managing Director of the IMF. I want to thank President Touré, whom I have had the privilege of meeting, and other Malian officials for their wonderful hospitality. I am also grateful for the opportunity to meet with Ministers and officials of the West African Economic and Monetary Union (WAEMU), Mauritania and Guinea. I came primarily to listen—to hear from policy makers and others in the sub-region about their priorities, and how they feel the IMF can help. I would like to express my sincere thanks to all my interlocutors, including those from civil society.
"I believe this is a moment of great opportunity for Africa, where many countries have taken advantage of solid global economic growth and of debt relief to successfully implement reforms. These reforms, in turn, are improving economic performance. The goal is to create a virtuous circle of reform and faster growth, paving the way for sustained poverty reduction.
"I have been given a broad exposure to Mali in just three days. I have visited cotton farmers in Fana and a rice irrigation project outside Timbuktu. I have spent time at a health clinic here in Bamako that has benefited from resources made available by HIPC debt relief. I have had the opportunity to learn of Mali's rich heritage, including by visiting the elders of the founding families of Bamako. I am deeply impressed by all that I have seen and heard—especially the determination of both Malians and their neighbors to achieve a better life in the years ahead.
"The visit provided an opportunity to discuss economic developments and challenges in Mali. I very much share President Touré's view that economic performance has broadly been good under Mali's economic program that is supported by the IMF's Poverty Reduction and Growth Facility. Despite adverse external shocks in 2005, the pace and momentum of economic activity have been maintained, owing to good cereal harvests in 2005 and 2006 as well as to higher gold export revenues. My discussions, including with Prime Minister Ousmane Issoufi Maïga, President of the National Assembly Ibrahim Boubacar Kéïta, and Minister of Economy and Finance Abou-Bakar Traoré, revealed a shared understanding of the policies needed to achieve sustained growth and poverty reduction, and to make progress toward meeting the Millennium Development Goals. Mali should strengthen its record of macroeconomic stability and fiscal sustainability, and above all accelerate the pace of structural reforms. Implementing key planned reforms is the important step it has to take next. Looking ahead, Mali's Poverty Reduction Strategy Paper for 2007-11 should provide a coherent growth strategy. The IMF stands ready to support these efforts.
"I also had very productive discussions with the Ministers and officials, civil society and the media from neighboring countries at the regional seminar on the scaling up of aid that we organized jointly with the Agence Française de Développement. With the expected doubling of aid to Africa by 2010, plans in the region to increase spending on infrastructure and social sectors are very welcome," Mr. Lipsky said.
The conference on scaling up of aid discussed macroeconomic challenges arising from scaling up aid. These include: (i) the strengthening of institutions and governance; (ii) the importance of increasing the supply response (in the form of improved productivity and higher employment) to aid flows; (iii) avoiding loss of competitiveness from exchange rate appreciation; (iv) coordinating fiscal and monetary policies (v) reducing aid volatility; (vi) identifying key issues and policies to absorb higher aid flows, and (vii) formulating an exit strategy and planning to depend less on aid over time. The focus of the seminar was on how recipients and their development partners can address these challenges.
Mr. Lipsky said, "WAEMU member states have experienced challenging environments in the last few years, both internally and externally. Many saw deteriorations in terms of trade, largely induced by commodity prices. Some countries experienced adverse agricultural shocks, while others suffered from socio-political problems. In my discussions, I noted that the key priority, which all ministers fully supported, is the continued implementation of sound macroeconomic and fiscal policies needed to make decisive inroads in the fight against poverty. The IMF stands ready to support the efforts of all countries in the region. I also found a broad consensus on the need to accelerate structural reforms that raise the productive capacity of the region's economies and promote economic diversification. Similarly, we agreed on the need for the development of sound institutions that provide an environment conducive to investment and private sector development. This would include improving governance at all levels."