## MALI — REQUEST FOR SECOND TRANCHE OF DEBT SERVICE RELIEF UNDER THE CATASTROPHE CONTAINMENT AND RELIEF TRUST (1mliea2021001) ## Source details **Canonical URL:** [MALI — REQUEST FOR SECOND TRANCHE OF DEBT SERVICE RELIEF UNDER THE CATASTROPHE CONTAINMENT AND RELIEF TRUST (1mliea2021001)](https://www.imf.org/-/media/files/publications/cr/2021/english/1mliea2021001.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2021/english/1mliea2021001.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2021/english/1mliea2021001.pdf.json) --- ### Executive action and purpose - On October 30, 2020, the IMF Executive Board approved a second six-month tranche of debt service relief for Mali under the Catastrophe Containment and Relief Trust (CCRT) without a meeting. - The disbursement covers eligible IMF debt service falling due from October 14, 2020 to April 13, 2021, estimated at SDR 7.50 million (about US$10.59 million). - The relief aims to free up scarce financial resources to strengthen medical care capacity and address social and economic fallout from the COVID-19 pandemic. - The approval for Mali followed an earlier six-month tranche (April 14 – October 13, 2020) and completes an earlier list of 28 low-income countries that benefited from the second six-month tranche (noting Mali’s approval was delayed due to the coup d’état on August 18, 2020 and time needed to form a transition government). ### Recent economic developments and outlook - Growth trend: - Prior multi-year average growth: 5 percent. - Growth projected to decline from 5 percent to -2 percent in 2020. - Drivers of the 2020 contraction: - COVID-19 impacts: slowdown in external demand, travel, and FDI; uncertainty and reduced mobility affecting domestic demand. - Post-coup disruptions: trade, transport, economic and financial flows affected by ECOWAS sanctions. - Inflation and external sector: - Inflation accelerated slightly recently but expected to remain below 2 percent. - Current account deficit projected to narrow due to higher gold prices (main export) and lower oil prices (main import). - Risks: - Exceptionally high due to political transition uncertainty, sanctions impact on trade and activity, and worsening security situation. - Weak social safety nets, high informality, food insecurity, and fragile healthcare system exacerbate challenges. - COVID-19 epidemiology: - Total confirmed cases standing at 3,296 as of October 12. ### Public health and fiscal response - COVID-related fiscal measures (FY 2020 projections, percent of GDP): - Overall package announced in April 2020: about 2.3 percent of GDP. - Tax relief measures in revised budget: 0.6 percent of GDP. - Package components: - Emergency health plan and purchase of medical supplies: 0.6 percent of GDP. - Support to vulnerable households: 1.2 percent of GDP. - Support to firms: 0.5 percent of GDP. - Expected increase in priority spending in 2020 once fully executed: 1½ percent of GDP. - External support and debt relief: - Grants and concessional loans from international partners: about 0.2 percent and 1.8 percent of GDP, respectively. - G20 Debt Service Suspension Initiative: around 0.2 percent of GDP agreed, but only 0.05 percent of GDP in debt service effectively suspended so far. - Execution status as of mid-September 2020: - Only a third of planned COVID-19-related spending implemented. - Reasons: post-coup sanctions cut access to the Treasury Single Account at BCEAO; no payments/expenditures could be made from those accounts. - Specific execution: - Support to electricity and water SOEs and food distribution: fully executed. - COVID prevention and medical support: 60 percent execution. - Execution of other COVID-related spending (including vulnerable households): not yet started. - Monetary/financial response: - BCEAO measures to ease financing and lending conditions were taken starting in March. ### Governance safeguards and transparency commitments - Under the IMF RCF, authorities committed to: - Publication of quarterly COVID-19 related expenditure reports. - Publication of documentation on large public procurement contracts, with ex-post validation of delivery and names of awarded companies and their beneficial owners. - Commissioning an independent third-party audit of this spending in about a year’s time. - Institutional arrangements: - A committee to monitor COVID-19 related expenses chaired by the Secretary General of the Ministry of Economy and Finance, including private sector and civil society representatives. - Resident PFM advisor assisting authorities to improve budget transparency and control. - Implementation challenges: - The August 2020 government fall, limited execution of the economic support package, and absence of a transition government for nearly two months delayed publication of agreed information on execution of COVID spending. - Recommendation: critical for the newly formed transition government to implement governance commitments in COVID fund spending. ### IMF support status and CCRT eligibility - IMF program status: - Three-year ECF arrangement approved in August 2019; first review completed in January 2020; on hold since March 2020 (initially at authorities’ request for pandemic response, subsequently due to the coup). - On April 30, 2020, IMF approved emergency support under the Rapid Credit Facility (RCF) of SDR 146.668 million (about US$200.4 million, 78.6 percent of quota, 1.2 percent of GDP). - Earlier CCRT relief during April–October 2020: about SDR 7.3 million (about US$10 million, 0.06 percent of GDP). - Upcoming CCRT eligible debt service: - Mali has debt service of SDR 7.5 million (US$10 million, about 0.06 percent of GDP) falling due during October 14, 2020 to April 13, 2021, the maximum period covered by the second tranche. ### Staff assessment and priorities - Staff view on fiscal response: - Planned fiscal policy response to COVID-19 appropriate, but fiscal outlook and implementation prospects highly uncertain because of coup fallout and political transition. - Use of resources: - Resources freed by the initial CCRT tranche, and donor support, have been used for health, social, and economic support to mitigate pandemic impact. - Implementation priority: - Delayed support to households should start as soon as feasible. ### Key statistics from Table 1 (selected indicators) - Real GDP (annual percent change): - 2017: 5.0 - 2018: 5.2 - 2019: 5.1 - 2020 (Proj., pre-COVID): -2.0 - 2021 (Proj., pre-COVID): 5.0 - 2022: 4.0 - 2023: 6.0 - 2024: 5.0 - 2025: 5.0 - Consumer price inflation (average): - 2017: 1.8 - 2018: 1.7 - 2019: -2.9 - 2020: 0.6 - 2021: 0.5 - 2022: 2.0 - 2023: 1.5 - 2024: 2.0 - 2025: 2.0 - Priority expenditures (percent of GDP): - Pre-Covid: 6.4 - Current: 7.9 - Change: 1.5 - Health: Pre-Covid 1.3, Current 1.5, Change 0.2 - Education: Pre-Covid 3.7, Current 3.5, Change -0.2 - Social: Pre-Covid 0.5, Current 2.0, Change 1.5 - Fiscal aggregates (percent of GDP): - Revenue: 2019: 18.4; 2020: 14.4; 2021: 19.5; 2022: 20.5; 2023: 17.9; 2024: 20.7; 2025: 20.0 - Total expenditure and net lending: 2019: 22.9; 2020: 20.4; 2021: 23.1; 2022: 26.4; 2023: 26.5; 2024: 25.9; 2025: 26.1 - Overall balance (accrual basis): 2019: -2.9; 2020: -4.8; 2021: -1.7; 2022: -3.5; 2023: -6.2; 2024: -3.3; 2025: -4.5 - Public debt (end of period): 2019: 36.0; 2020: 37.7; 2021: 40.5; 2022: 39.0; 2023: 44.8; 2024: 39.5; 2025: 46.2 - External sector: - Current account balance, including official transfers: 2019: -7.3; 2020: -4.9; 2021: -4.2; 2022: -4.4; 2023: -2.0; 2024: -4.6; 2025: -1.2 - Memorandum items: - Nominal GDP (CFAF billions): 2019: 8,922; 2020: 9,426; 2021: 10,150; 2022: 10,917; 2023: 10,148; 2024: 11,732; 2025: 10,722 - Nominal GDP (US$ billions): 2019: 16.1; 2020: 16.4; 2021: 17.2 *Prepared by the African Department; staff report completed October 16, 2020; press release PR 20/328 (October 30, 2020).* --- _Source: https://www.imf.org/-/media/files/publications/cr/2021/english/1mliea2021001.pdf_