Press Release No. 11/339

Press Release No. 11/339
September 19, 2011

A mission from the International Monetary Fund (IMF) visited Bamako from September 5 to 16, 2011 to conduct discussions on the seventh review of the arrangement under the Extended Credit Facility (ECF), which will expire at end-2011, and on the preparation of a new three-year program eligible for IMF support. The team met with Mariam Kaïdama Cissé, Prime Minister; Lassine Bouaré, Minister of Economy and Finance; Sambou Wagué, Minister of Budget; Oumar Ly, National Director, Central Bank of West African States (BCEAO); and representatives from the National Assembly, civil society, unions, and the private sector.

Christian Josz, IMF Mission Chief for Mali, issued the following statement:

“The economic program of the government of Mali supported by the IMF remains on track and, as a result of the pursuit of prudent macroeconomic policies, prospects are good for reaching the program objectives by end-2011. Owing to satisfactory rainfall levels and strong international prices for gold and cotton, GDP growth is forecast at 5.4 percent and inflation should remain below 3 percent in 2011. The basic budget deficit (revenue and budget grants minus domestically financed expenditure)is expected to remain within program limits equivalent to 1.6 percent of GDP. The mission also noted progress in the implementation of structural reforms to improve budget and cash flow management and strengthen the banking system, and encouraged the authorities to continue on this path.

“Looking to the future, the authorities and the mission reached an agreement in principle on the main thrusts of a new three-year program for 2012-14. Based on the lessons learned from the implementation of previous programs supported by the IMF and the conclusions of the conference on "Mali: Challenges and Economic Opportunities" organized in Bamako on March 18-19, 2011,¹ the program for 2012-14 will aim to: continue the implementation of sustainable fiscal policies; create the fiscal space for infrastructure expenditure by mobilizing domestic resources and having limited recourse to nonconcessional borrowing to finance projects that offer a high return; consolidate progress in public financial management; and promote the development of the private sector by improving the business climate.

“Growth in 2012 is projected at 5.6 percent, while inflation should remain below 2.5 percent. The basic budget deficit is targeted at 0.7 percent of GDP, reflecting a 7.8 percent increase in health and education expenditure financed with domestic resources in support of poverty reduction, while the equivalent of 0.5 percent of GDP in capital expenditure should be financed with revenue from the privatization of the telecommunications company SOTELMA.

“The discussions will continue during the Annual Meetings of the IMF and the World Bank in Washington D.C. on a few aspects of the 2012 draft budget and some modalities of the reforms planned for the period 2012-14. The forthcoming completion of these discussions should allow the Executive Board of the IMF to consider in December 2011 the seventh review of Mali's performance under the current arrangement, along with the request for a new three-year arrangement under the ECF.

“The mission would like to thank the authorities for their warm welcome and close cooperation.”

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¹ Press Release No. 11/94: The Bamako Conference Calls for Stronger and Inclusive Growth in Mali in the Context of Strengthened Partnership.