IMF Staff Completes 2023 Article IV Mission to Mali

IMF News, March 24, 2023

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An International Monetary Fund (IMF) team, led by Ms. Wenjie Chen, conducted discussions virtually on the 2023 Article IV consultation with Mali from March 6 to March 17, 2023.
The mission held constructive discussions with a broad range of counterparts including the government and private sector to exchange views on economic prospects and risks, progress on reform, challenges, and policies.
End-of-Mission press releases convey preliminary findings after a visit; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

Mali has faced multiple shocks since 2020 including coups d’état, sanctions, and a cost-of-living crisis following the war in Ukraine.
Mali’s population is suffering from high incidence of food insecurity and the country faces acute domestic security challenges.
The lack of external budget support and tighter financial conditions are limiting Mali’s financing options amid continued spending pressures, especially security expenses and a high wage bill.

“The economy has proved relatively resilient, however, with economic growth above 3 percent in 2021 and at 3.7 percent in 2022.”
Real GDP growth is projected to rebound to over 5 percent in 2023 and 2024 thanks to strong agricultural and gold output.
The growth forecast is predicated on elections taking place in 2024, which is assumed to prompt a resumption of external budget support and spur foreign investments.

The near-term outlook is positive but subject to substantial downside risks.
Downside risks explicitly noted: a worsening security situation, potential election delays, volatile international commodity prices, tighter global financial conditions, and climate risks.
Mali’s fiscal and external buffers have fallen, leaving the country more vulnerable to a further deterioration in the financing environment.
Examples of tightening conditions: a tightening of the Central Bank of West African State’s (BCEAO) bank refinancing conditions and low subscription rates for Mali’s government regional debt issuances in late 2022 and the early months of 2023.

“The government’s fiscal deficit—at just under 5 percent of GDP in 2022—reflects a rapid increase in security spending, public wages, and the interest bill.”
Together, security spending, public wages, and the interest bill “consume close to 80 percent of fiscal revenues and risk crowding out growth-friendly spending including those on the social safety net and investment.”
Policy priority: reducing the fiscal deficit and converging towards the West African Economic and Monetary Union’s (WAEMU) 3-percent fiscal deficit ceiling to help ensure debt sustainability and ease debt financing.
Short-term revenue and expenditure measures recommended:
- Improve domestic revenue mobilization, including elimination of various tax exemptions and expansion of digital taxation.
- On expenditures, limit further increases in the public sector wage bill.
- Phase out untargeted subsidies and transfers while reprioritizing social transfers to target the most vulnerable households.
- Improve efficiency of public spending through stronger cash management and commitment controls.

To bolster medium-term growth prospects, strengthen governance and step up the fight against corruption.
Crucial measures include strengthening the mandates of anti-corruption investigations by judicial and prosecution bodies and improved transparency in public procurement and the mining industry.
Additional policy areas highlighted: policies to address climate change, and reforms to the education and health sectors such as creating opportunities for vocational training, improving women’s labor market participation and achieving greater gender equity.

At the end of the visit, Ms. Chen issued the statement quoted above summarizing findings and recommendations.
The mission met with the Minister of Finance Mr. Alousséni Sanou, the Acting Director of the BCEAO in Bamako Mr. Barema Bocoum, Directors and staff of the main ministries and government agencies, development partners, and the private sector.
“The mission thanks the authorities and other counterparts for their close collaboration and productive discussions.”

IMF Staff statement based on the 2023 Article IV consultation mission to Mali (March 6–March 17, 2023).