Statement by IMF Staff Mission to MaliPress Release No. 06/260
November 21, 2006
Mr. Jean-Pierre Chauffour, the International Monetary Fund's (IMF) mission chief for Mali, issued the following statement today in Washington, D.C.:
"An IMF mission visited Mali during November 1-15, 2006, for discussions on the fifth review under Mali's Poverty Reduction and Growth Facility (PRGF) arrangement.1 The mission held discussions with the Minister of Economy and Finance Abou-Bakar Traoré and other cabinet members, Central Bank of West African States (BCEAO) National Director Idrissa Traoré, other senior officials of the government of Mali, as well as representatives from the private sector, civil society, labor unions, and the donor community.
"The mission noted that the outlook for the Malian economy in 2006-07 remains positive, thanks to a good harvest, higher gold export revenues, and growing services. Furthermore, continued strong global growth together with terms of trade appreciation and a reduction in debt service under the Multilateral Debt Relief Initiative (MDRI) have created an especially favorable external environment for Mali.
"The authorities plan to take advantage of these encouraging economic developments at both the national and international levels to consolidate gains in macroeconomic stability and, by the end of the current PRGF program in June 2007, complete implementation of the program of structural reforms, particularly in the five priority areas identified at the onset of the program in 2004: pension fund, banking sector, cotton sector, public financial management, and privatization.
"The mission worked with the Malian authorities to assess performance under the PRGF program and, on the basis of preliminary data, concluded that the quantitative targets for end-September 2006 for domestic borrowing, non-accumulation of arrears, contracting of non-concessional debt, and the wage bill were met. However, shortfalls in tax receipts undermined attainment of the indicative targets for tax revenue and the overall basic fiscal balance at end-September 2006. To remedy the situation, the authorities have applied corrective measures for both revenue and expenditure since September.
"Regarding structural reforms, the mission noted that despite substantial progress in certain areas, there have been delays in other areas since the fourth review, particularly with respect to the pension fund reform, financial sector strengthening, and the privatization program.
"The authorities and the mission reached an agreement in principle in Paris on November 16, 2006 concerning the program targets, macroeconomic policies, and structural reforms to be implemented in the first half of 2007. The primary aim of these policies is to promote accelerated medium-term growth, especially through development of the private sector, based on external assistance and debt relief, to reduce poverty and move closer to attainment of the other Millennium Development Goals.
"The mission thanks the authorities for their hospitality and the close collaboration and constructive policy dialogue."
1 The PRGF is the IMF's concessional lending facility for low-income countries. PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a 5½-year grace period on principal payments.