Statement by an IMF Staff Mission to MaliPress Release No. 07/130
June 13, 2007
The following statement was released today in Bamako by Jean-Pierre Chauffour, the International Monetary Fund's (IMF) mission chief for Mali:
"An IMF mission visited Mali during May 30-June 13, 2007, for discussions on the sixth and final review under Mali's Poverty Reduction and Growth Facility (PRGF) arrangement (2004-07).1 The mission met with H.E. President Amadou Toumani Touré and Prime Minister Ousmane Issoufi Maiga and held discussions with the Minister of Economy and Finance, Abou-Bakar Traoré; the Minister of Mines, Energy and Water, Hamed Diane Séméga; the Minister of Land and Property, Soumaré Aminata Sidibé; and senior officials of the government of Mali and the Central Bank of West African States (BCEAO). The mission also met with representatives of the private sector, civil society, and Mali's development partners.
"The mission noted that the outlook for the Malian economy in 2007 remained broadly positive, thanks to high gold export revenues. After increasing by 5.3 percent in 2006, real GDP is projected to grow by about 5 percent in 2007. Inflation is expected to remain low at around 2 percent and Mali's external position should strengthen. These developments are the result of prudent fiscal policy, good agricultural production, and a favorable external environment as a result of continued strong global growth and a reduction in debt service under the Multilateral Debt Relief Initiative (MDRI).
"On the basis of preliminary data, the mission concluded that the main fiscal targets for end-March 2007 were all met. However, some important state-owned enterprises continued to generate a growing burden on the public finances and the private sector through the accumulation of deficits and payment delays. In particular, losses at the state-owned cotton Compagnie Malienne de Developpement des Textiles (CMDT) have eroded its net worth ahead of the privatization planned for 2008.
"The authorities' plan to complete implementation of the program of structural reforms by the end of the current PRGF program in October 2007, focusing on the priority areas identified at the onset of the program in 2004. In particular, the authorities indicated their intention to complete their plans to reform civil service pensions (CRM) and to strengthen the housing bank's (BHM) legal authority to recover its nonperforming loans.
"Looking forward, the authorities expressed their interest in having a new arrangement with the IMF in support of their second generation poverty reduction strategy (2007-11). The thrust of the anti-poverty strategy is to enhance Mali's productivity and competitiveness to achieve accelerated medium-term growth, reduce poverty and move closer to attainment of the other Millennium Development Goals. Sustaining robust growth would hinge on maintaining macroeconomic stability, making more effective use of public resources—while undertaking the necessary improvements in infrastructure—and improving the business environment for the development of the private sector. In particular, the authorities intend to update their financial sector development strategy in cooperation with the IMF and the World Bank.
"The mission thanks the authorities for their hospitality and the close collaboration in a spirit of cooperative 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.