Press Release: IMF Executive Board Completes Fifth Review Under ECF Arrangement for Mali and Approves US$3.12 Million Disbursement
January 26, 2011Press Release No. 11/20
January 26, 2011
The Executive Board of the International Monetary Fund (IMF) today completed the fifth review of Mali’s economic performance under a program supported by the Extended Credit Facility (ECF). The Board’s decision enables the immediate disbursement of an amount equivalent to SDR 2 million (about US$3.12 million), bringing total disbursements under the ECF for Mali to an amount equivalent to SDR 25.99 million (about US$40.52 million). The Executive Board also approved an extension of the arrangement from May 27, 2011 to December 31, 2011, and a rephasing of the last disbursement into two equal tranches.
The arrangement under the Extended Credit Facility (ECF) was approved on May 28, 2008, in the amount equivalent to SDR 27.99 million (See Press Release No. 08/126).
At the conclusion of the Executive Board's discussion on Mali, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, stated:
“Macroeconomic developments in Mali have been favorable, helped by the able fiscal stewardship of the authorities. Growth is expected to remain at 4.5 percent in 2010 and inflation is low. Performance under the ECF-supported program continues to be good, reflecting the authorities’ commitment to the program objectives. The 2011 economic outlook is positive, with a projected strengthening of economic activity. Continued prudent macroeconomic policies and a prompt implementation of structural reforms will be necessary to reduce vulnerabilities, diversify the economy, further raise economic growth, and reduce poverty.
“Fiscal policy continues to be cautious and more emphasis is given to directing adequate resources to social spending. The 2011 budget is well aligned with the authorities’ growth and poverty reduction strategy and their program’s macroeconomic objectives. However, the need for VAT credit refunds has been underestimated. Additional resources will be required to meet the deficit target and the authorities have committed to adopt a supplementary budget with measures to increase revenue or cut expenditure.
“While public financial management has been strengthened, further progress is needed. The authorities have committed to simplifying the tax code and modernizing tax and customs administration in order to increase domestic revenue mobilization and improve the business environment. The authorities also plan to reduce the excessive number of accounts held by the government entities in commercial banks, implement the directives of the West African Economic and Monetary Union to increase fiscal transparency, and strengthen oversight in order to improve revenue collection and budget execution.
“To reduce external vulnerabilities stemming from the exports’ concentration on gold, the authorities need to continue implementing a prudent debt management and step up efforts to diversify the economy. Ongoing efforts to privatize the cotton ginning company and develop the financial sector development will be particularly useful,” Mr. Shinohara said.