Mali and the IMF

Country's Policy Intentions Documents

See also:
Poverty Reduction Strategy Papers (PRSPs)

Enhanced Structural Adjustment Facility
Medium-Term Policy Framework Paper, 1999-20021

Prepared by the Government of Mali in Collaboration
with the International Monetary Fund and World Bank Staffs
July 12, 1999


  1. Introduction

  2. Results Obtained Under the Previous ESAF Program and Recent Economic Developments

  3. Strategy and Objectives for 1999-2002

  4. Macroeconomic Policies
    1. Fiscal Policy
    2. Monetary Policy

  5. Structural Policies
    1. Private Sector Development
    2. Legal and Judicial Environment
    3. Public Enterprise Reform
    4. Sectoral Policies
    5. Improvement of Statistical Data
    6. Technical Assistance

  6. Administrative Decentralization and Institutional Reforms

  7. Regional Integration

  8. Social Issues and Human Resources Development
    1. Education
    2. Health and Population
    3. Promotion of Women
    4. Employment and the Civil Service

  9. External Sector and Financing Requirements

  10. External Debt Management


  1. Mali: Summary and Timetable of Macroeconomic and Structural
    Adjustment Policies, 1999-2002
  2. Mali: Selected Economic and Financial Indicators, 1996-2002
  3. Mali: External Financing Requirements and Resources, 1996-2002
  4. Mali: Selected Social and Demographic Indicators
  5. Mali: List of Selected Acronyms



I.  Introduction

1.  Since mid-1992, the Malian authorities have implemented an ambitious adjustment program aimed at achieving sound and sustainable economic growth, poverty reduction, and financial viability in the medium term. The medium-term adjustment strategy was strengthened in early 1994 by the devaluation of the CFA franc in coordination with Mali's partners in the West African Economic and Monetary Union (WAEMU). The measures accompanying the devaluation emphasized (i) strict demand management to preserve the competitiveness gains obtained, control inflationary pressures, and reduce the budget deficit; and (ii) deepening of structural reforms to liberalize the economy, reduce the size of the public sector, promote the private sector, and develop human resources. This economic and financial program, which was supported by the IMF, the World Bank, and other multilateral and bilateral donors and lenders, was implemented in a context marked by the transition to democracy, continued regional integration, and the beginning of administrative decentralization.

2.  Despite the encouraging results obtained in terms of macroeconomic stabilization, improved competitiveness and positive economic growth, the financial and economic situation remains fragile, and important structural measures remain to be completed, including the public enterprise reform program. The prospects for stronger growth are hampered by bottlenecks related to, in particular, weaknesses in the legal and regulatory framework, the still cumbersome administrative procedures, a fragile and undiversified financial system, deficiencies in public services, especially in the electricity, telecommunications, and transport sectors, and an inadequate infrastructure. In addition, the social indicators remain weak, poverty is widespread, and the Malian economy, which is largely agricultural and not very diversified, remains vulnerable to adverse weather conditions and external shocks, particularly in the terms of trade.

3.  The Malian authorities are convinced of the need to consolidate the progress made in recent years by broadening the range of macroeconomic policies, as well as to speed up and intensify the structural reform effort, in order to achieve economic growth that is strong enough to significantly reduce poverty, create jobs, and achieve financial viability in the medium term. To this end, they have decided to implement the next phase of the economic reform strategy, which focuses on policy actions in areas where progress so far has been limited.

4.  This policy framework paper, which is intended for wide distribution, summarizes the progress made during the previous program supported by a three-year arrangement under the Enhanced Structural Adjustment Facility (ESAF) and gives a detailed description of the measures and reforms envisaged in Mali's economic development strategy for 1999-2002. It has been prepared in collaboration with the staffs of the IMF and the World Bank, and takes into account the determination of the government to implement all the measures necessary to enable Mali to benefit from external debt relief under the Initiative for Heavily Indebted Poor Countries (HIPC). In support of these reforms, which will be implemented in a context of increased regional integration, decentralization, and strengthening of democracy, the government of Mali is seeking the support of the IMF in the form of a new three-year arrangement under the ESAF, as well as the financial assistance of the World Bank and other multilateral and bilateral donors and lenders. A summary of the main measures envisaged for the period 1999-2002, together with the timetable for their implementation, and a summary table on external financing requirements are attached.


II.  Results Obtained under the Previous ESAF Program
and Recent Economic Developments

5.  The reform strategy since 1994 had emphasized preserving the competitiveness gains of the Malian economy derived from the change in parity of the CFA franc, pursuing fiscal consolidation, and implementing structural reforms needed to make the economy more flexible, diversify the productive base and exports, and develop human resources.

6.  Implementation of the economic program supported by the second three-year arrangement under the ESAF, covering the period 1996-98, resulted in making significant progress in reducing macroeconomic imbalances and liberalizing the economy, and restored positive economic growth. The economy grew at an average real rate of almost 5 percent during 1996-98, implying an annual increase in real per capita GDP of approximately 2 percent; the average annual inflation rate was brought down from 12½ percent in 1995 to 4 percent in 1998; and the central government budget deficit (on a commitment basis and excluding grants) was reduced over the same period from 10½ percent of GDP to 7½ percent, while the external current account deficit (excluding official transfers) declined from 14 percent of GDP to 9½ percent. In the social area, the gross primary school enrollment rate increased to 50 percent in 1998, compared with an average of 35 percent during the 1990-95 period. The share of the population having access to primary health care increased from 20 percent in 1995 to 40 percent in 1998.

7.  All key sectors of the economy contributed to the positive rate of economic growth. In the agricultural sector, cotton production, which benefited from the restored competitiveness, favorable international prices, and relatively good rainfall, almost doubled from 293,000 tons in the 1994/95 crop year to 523,000 tons in 1997/98. The production of cereals also recorded a satisfactory overall increase. The performance of the secondary and tertiary sectors was remarkable, owing especially to increased activities in the mining, construction and public works, transportation, and trade sectors. In particular, there were new investments in the gold-mining sector, with the opening of the SADIOLA mine in 1997. Gold production and exports increased from 6.2 tons in 1995 to close to 23 tons in 1998.

8.  In the public finance area, the efforts made to increase revenues and control expenditure made it possible to reduce the overall fiscal deficit (on a commitment basis and excluding grants) by more than 3 percentage points of GDP during 1995-98. Significant measures implemented to expand the tax base, strengthen the tax and customs administrations, reduce exemptions, and combat tax evasion led to an increase in total government revenue from less than 13 percent of GDP in 1995 to about 16 percent in 1998. Among these measures are the creation of the Large Enterprise Division; the introduction and extension of the single taxpayer identification system, which has allowed for better control of tax assessments and collections; the implementation of the drawback system applicable to petroleum imports; and the improvement in customs clearance procedures with the implementation of the import verification program. Major tax reforms were introduced, including, in particular, the implementation of the initial phase of the WAEMU common external tariff (CET) and preparations for an in-depth reform of direct and indirect taxation, involving the replacement of the two-rate value-added tax (VAT) by a single-rate VAT at 18 percent.

9.  Total government expenditure and net lending was kept under control and maintained at about 23¼ percent of GDP throughout the period. The wage bill was held at a level equivalent to 3¾ percent of GDP, and its share in tax revenue was reduced from 36½ percent in 1995 to 26½ percent in 1998. This was achieved through the government's moderate wage policy and the hiring freeze of civil servants, with the exception of partial replacements for retirees and new recruitments in the education and health sectors. Moreover, the weeding of the civil service payroll brought some additional savings. The increase in other current expenditure, excluding the election costs, was also moderate, and the shift of public spending toward the social and priority sectors was continued. The fiscal consolidation resulted in higher public savings, which, in turn, led to an increase in domestically financed public investment from 1½ percent of GDP in 1995 to 2¾ percent in 1998. Furthermore, the government reduced domestic payments arrears by CFAF 35 billion during the three-year period, and no new payments arrears were accumulated.

10.  A prudent monetary and credit policy was conducted by the regional monetary authorities. The money supply grew moderately, at an average growth rate of 8¼ percent during 1996-98, slightly below nominal GDP growth. At the same time, the net foreign assets position of the banking system remained positive, and Mali maintained its contribution to the common pool of foreign reserves at a substantial level. In conjunction with the improvement in government finances, the government maintained a net credit position vis-à-vis the banking system and did not have recourse to advances from the central bank (BCEAO). Credit to the economy increased on average by more than 20 percent per year during 1996-98, thus supporting the development of private sector activities.

11.  The consolidation of monetary policy reforms and the strengthening of prudential regulations and banking supervision were continued. The use of indirect monetary policy instruments and flexible, market-determined interest rates was stepped up, and the central bank initiated its open market policy in 1996. To promote regional economic integration, the BCEAO established a privately managed regional stock exchange in cooperation with the other WAEMU institutions. The overall soundness of the banking system has improved since 1995, and most banks in Mali showed a profit in 1997 and 1998. However, their position remains fragile, and a number of the prudential ratios set by the WAMU Banking Commission are not respected by some banks. Gross nonperforming loans remained high at end-1998, representing approximately 26 percent of the banks' portfolio of credit to the economy; provisions totaled 64 percent of this amount. Finally, contacts were initiated by the authorities with a view to obtaining new shareholders for the Banque Internationale pour le Mali (BIM-SA) and the Banque Malienne de Crédit et de Dépôts (BMCD).

12.  In the area of private sector promotion, the government maintained the existing system of mostly liberalized prices and marketing channels. The reform of the government agencies responsible for monitoring this area was put in place with the replacement of the former National Directorate of Economic Affairs (DNAE) with the National Directorate of Commerce and Competition (DNCC), whose primary task is to strengthen the rules of competition. The improvement of the legal and regulatory framework, which began in 1992 with the abolition of certain monopolies and the adoption of a more flexible labor code, was continued. The commercial code was revised, and commercial courts and administrative tribunals were created and they began to operate in 1995. Moreover, all uniform acts of the Organization for the Harmonization of Business Law in Africa (OHADA) became effective in January 1998. The new law governing the Chamber of Commerce and Industry of Mali was adopted, and elections for the appointment of new adjudicators to the commercial courts were held in 1998. The government established an inspection agency for the judiciary and a unit to review and monitor business law, and organized a national forum on justice administration. To facilitate the establishment of new enterprises, it improved the operations of the one-stop investment window by introducing the ex post declaration for most enterprises, with the exception of polluting industries and manufacturers of hazardous products.

13.  Efforts to restructure/privatize public enterprises were continued. The number of nonbank public enterprises was reduced from about 85 in the late 1980s to 40 at end-1995, and to 33 at end-1998, and their weight in nominal GDP dropped from 12 percent in 1987 to 7½ percent in 1998. The printing company (EDIM-SA), the insurance company (CNAR) and the maintenance company (EMAMA) were privatized in 1998, and the Hôtel de l'Amitié was placed under a management contract. However, the calls for bids for minority holdings in four small enterprises (SEMA-SA, MALITAS, SMPC and SOMACO-SA) were unsuccessful, and the privatization of the tobacco company (SONATAM) has not yet been concluded. In order to better organize future restructuring/privatization operations, an interministerial privatization commission was created in 1998. The investment bank assigned with the task of privatizing the electricity and water company (EDM) began its work in February 1999, and the law authorizing this company's privatization was promulgated in March 1999. The government adopted a sectoral policy statement for the telecommunications sector in July 1998 and promulgated the law authorizing the opening of the capital of the national telecommunications company (SOTELMA) in March 1999.

14.  In the agricultural sector, the government completed a technical audit of the cotton subsector and prepared an action plan aimed at improving the subsector's competitiveness and increasing private sector participation. In 1998, the producer price for seed cotton was increased from CFAF 170 per kilogram to CFAF 185 per kilogram, and the resources of the Cotton Sector Stabilization Fund were fully reconstituted. In the context of the restructuring of the Ministry of Rural Development and Water, the inventory of human and physical resources has been completed.

15.  In the education sector, the annual recruitment policy was pursued, and 1,875 new teachers and 3,959 contractuals were recruited between 1996 and 1998, especially in basic education. The reallocation of government spending toward the education sector was stepped up, with a view to promoting primary education, spending on educational materials, and maintenance. The share of the education sector in current government expenditure increased from 21¼ percent in 1995 to 24 percent in 1998. At the same time, allocations for scholarships increased from CFAF 3.9 billion in 1995 to CFAF 6.2 billion during the 1998/99 school year, representing 14¾ percent and 16¾ percent of government current spending on education, respectively. A ten-year education development program (PRODEC) was adopted, and a vocational training and apprenticeship support fund set up to strengthen vocational training. In the health sector, 592 social/health workers were recruited in 1996-98, and the sector's share in current government expenditure totaled 10 percent in 1998, compared with 8 percent in 1995. The government adopted a ten-year health and social development plan (PDDSS) covering the period 1998-2007, and a health and social development program (PRODESS) for 1998-2002.

16.  Mali has pursued an active policy in support of regional economic integration. In particular, it has agreed with the other members of the WAEMU on the application of a CET to become effective as of January 1, 2000. The National Economic Policy Committee (CNPE), established in July 1996, has continued to produce various publications in the context of Union-wide multilateral surveillance.


III.  Strategy and Objectives for 1999-2002

17.  The development strategy for the period 1999-2002 is aimed at consolidating the macroeconomic stabilization achieved since 1994 and, especially, at strengthening and deepening the structural and sectoral reforms. The main objectives of the government are to achieve sustainable economic growth, with a view to combating poverty and unemployment, and to ensure financial viability in the medium term. In this regard, the government adopted a national strategy to fight poverty, that defines the framework for all sectoral and multisectoral programs. The development strategy will be implemented in a political context of further democratization, including, in particular, the implementation of the decentralization policy through the creation of local governments. In addition, this strategy is embedded in a context of further regional integration, especially within the WAEMU and the Economic Community of West African States (ECOWAS). The government's efforts will continue to focus on establishing durable budgetary equilibrium, along with the accelerated divestiture of public interests in productive and commercial activities, with a view to emphasizing the traditional roles of the state. Government intervention will be focused mainly on the introduction of a reliable and transparent judicial and regulatory environment that favors national and foreign private investment, as well as investment in public infrastructure and human resources development. This reorientation will be accompanied by financial policies aimed at strengthening macroeconomic stability, thereby building the confidence that enables the private sector to be more dynamic.

18.  Pursuing the improvement of the public finance situation remains a key aspect of the government's strategy, in order to make Mali less dependent on increasingly uncertain and lower external assistance. This requires enhanced mobilization of budgetary revenue to finance priority programs. The government is aware of the challenge represented by the need to increase tax revenues while preserving the competitiveness of the economy in the context of the implementation of the CET within the WAEMU. Spending will have to be managed well to allow adequate budgetary appropriations for social spending, including in rural areas, public investment, and maintenance outlays. The government will therefore endeavor to manage its resources with greater discipline, so as to achieve the public savings essential to finance the investment needed to create an environment conducive to private sector development.

19.  To reduce the obstacles faced by private investors, improve the efficiency of the economy, and increase economic growth, the authorities are resolved to deepen and accelerate structural reforms. In addition to the measures envisaged to strengthen the legal and institutional framework and to implement a final privatization program, the government's efforts will focus on (i) strengthening financial intermediation; (ii) implementing wide-ranging reforms in the electricity, telecommunications, mining, and cotton sectors; (iii) modernizing and overhauling the civil service to increase its efficiency; and (iv) executing an ambitious program in the health and education sectors. In cooperation with other member states, the government will do what is necessary to anchor and strengthen the process of integration within the WAEMU, so as to open a larger market to economic agents in Mali. It will take measures that will enable Mali to benefit from the comparative advantages of its economy and make the infrastructure investments necessary to support rapid economic growth.

20.  The implementation of this strategy should enable Mali to (i) achieve a real GDP growth rate averaging at least 5 percent per annum during 1999-2002; (ii) limit inflation, as measured by the harmonized consumer price index (CPI) for Bamako, to 2½ percent beginning in 1999; and (iii) reduce the external current account deficit (excluding official transfers) to 7 percent of GDP by 2002. The anticipated economic growth will be supported by increased activity in the key sectors of the economy (cotton, mining, and industry). The growth rate could reach 6-7 percent if the structural reforms described below are implemented efficiently and rapidly. The program calls for the investment rate, expressed as a percentage of GDP, to remain steady at about 21½ percent, and for an increase in private investment and the efficiency of public investment. At the same time, the domestic savings rate should increase from around 10¼ percent of GDP in 1998 to 14 percent in 2002.

21.  To fully implement all the envisaged reforms, the government will strengthen the technical committee that includes representatives from the various ministries involved in the implementation of the program. It will take any additional measures necessary to achieve the program's objectives.


IV.  Macroeconomic Policies

A.  Fiscal Policy

22.  A lasting improvement in the government's financial position will be crucial to Mali's adjustment strategy. This will involve ensuring the viability of the government's financial operations to reduce Mali's dependence on external budgetary assistance, while significantly reducing taxation of imports and ensuring that pressing needs in the priority sectors are addressed. The objective is to reduce the overall fiscal deficit (on a commitment basis and excluding grants) from a revised level of 8 percent of GDP in 1998 to 5¼ percent in 2002, a level that could be financed without budgetary assistance.2 This requires rapidly raising domestic revenues to cover the revenue losses expected from the implementation of the CET. The success of this effort will also require broadening the tax base and controlling government expenditure.

23.  The tax reforms initiated in 1998 will be supplemented with additional measures to increase tax revenue from 14 percent of GDP in 1998 to at least 15½ percent by 2002. With regard to domestic taxation, the reforms consist essentially in standardizing the VAT at a single rate of 18 percent, applicable as of April 1, 1999. Likewise, the law establishing a simplified system of direct taxation was applied in June 1999. Its provisions include (i) elimination of the progressive surtax in the form of the general income tax (IGR) and the introduction of revamped schedular taxes, including the tax on industrial and commercial profits (BIC); (ii) extension of the global tax (impôt synthétique) to all taxpayers with a turnover of less than CFAF 30 million annually, while making those exceeding this threshold subject to the filing obligations for the BIC and the VAT on an actual profits basis (régime réel); and (iii) introduction of a tax on wages and salaries (ITS) at progressive rates, withheld at the source. In addition, the taxpayer identification system will be improved through the mandatory use of the taxpayer identification number by all departments concerned and the continued registration of all taxpayers. Finally, the efficiency of the Large Enterprise Division will be enhanced as its computerization is completed, and the administration of the VAT will be improved and computerized.

24.  Regarding taxes on international trade, the government will, with its WAEMU partners, introduce a tariff reform that will reduce the number of rates applicable to non-WAEMU trade to four (0, 5, 10, and 20 percent), with a statistical tax of 1 percent, effective as of January 2000. At the same time, the reform calls for a full tariff dismantling on intra-WAEMU trade in approved industrial products of origin and agricultural goods. The authorities will endeavor, in the context of the WAEMU, to limit the application of the degressive protection tax (TDP) and the variable tax on imports (TCI). The revenue losses resulting from the application of the CET are estimated to be equivalent to about 1 percent of GDP in 1999/2000. To offset these losses, it will be necessary to reform domestic indirect taxation, expand the tax base to the mining and informal sectors, and continue to reduce exemptions by eliminating those not based on international treaties. At customs, the drawback system applicable to petroleum imports will be maintained. To simplify procedures and combat smuggling, the government will adopt the new customs code by September 1999.

25.  The growth of public spending will be controlled and its composition rationalized, in order to direct more resources toward priority sectors. It is expected that total expenditure and net lending will be reduced from 24 percent of GDP in 1998 to 22 percent in 2002, in line with the expectation that external project assistance will remain virtually stable. To keep the government wage bill within reasonable limits and maintain the competitiveness of the Malian economy, the government has decided to (i) continue to apply a strict public wage policy; (ii) limit net recruitment in the civil service, outside the priority sectors, to 200 agents per year so as to replace staff with better-qualified and more competent people; and (iii) complete the merging of the payroll and personnel registers into a single register of government workers by end-September 1999. This will allow to control the wage bill, while taking account of the incentives needed to increase the efficiency of the public administration. Expenditure on the education and health sectors will be increased, in accordance with the objectives set jointly with the World Bank. To ease the burden on the most disadvantaged, the government will continue to provide annual social safety net appropriations of about CFAF 10 billion during 1999-2002. The remaining domestic payments arrears will be eliminated in 1999, and the government will not accumulate any new arrears. At the same time, the government's Legal Services Unit will be reinforced in order to reduce the impact on the budget of the enforcement of court rulings. The total stock of the domestic public debt is expected to be reduced from a level equivalent to some 4 percent of GDP at end-1998 to 2¾ percent at end-1999, and to remain at about this level throughout the program period. Finally, the authorities will undertake annual public expenditure reviews in consultation with the World Bank.

26.  The authorities will continue to improve public investment programming and monitoring, in consultation with the World Bank. They will step up the monitoring of the physical and financial execution of the investment program by training project managers. A semiannual report on the execution of the special investment budget (BSI) will henceforth be submitted to the government, which will take appropriate corrective measures. The rolling three-year public investment program will be adopted by December 31 of each year, in parallel with the government budget. This program will give priority to the agriculture and infrastructure sectors and the development of human resources. The government's counterpart financing obligations will also be subject to regular monitoring. It is expected that the share of domestically financed capital spending will increase from 23 percent in 1998 to 32 percent in 2002.

27.  The government has established an organizing committee for the Cup of African Nations (CAN), which will take place in 2002. The government will adopt the financing plan for CAN 2002 by end-August 1999. Preliminary assessments are being based on the assumption that about 75 percent of the required investments will be financed entirely by the private sector and external partners, and that most of the remaining amount, which will be the responsibility of the government, can be financed under the public investment program. The balance could be financed by exceptional revenues, such as proceeds from the sale of government shares in some public enterprises, without jeopardizing the attainment of the objectives of the economic program.

B.  Monetary Policy

28.  The monetary authorities will continue to apply at the regional level a prudent monetary policy that is compatible with the exchange rate peg of the CFA franc with the Euro, and the consolidation of the external position of the Union. For Mali, broad money is projected to grow by approximately 8 percent annually during 1999-2002, in line with the rate of growth of nominal GDP. Mali's contribution to the net foreign assets position of the BCEAO should increase during this period. The monetary authorities will continue their efforts to strengthen the role of market forces in determining interest rates, especially through the diversification of the financial instruments available to the central bank; the strengthening of the regional financial market; and the increased use of open market policies.

29.  The authorities are determined to improve financial intermediation and the health of the banking system. To this end, they will prepare, by end-September 1999 and in consultation with the staffs of the World Bank and the IMF, an action plan with a timetable of implementation for the reform of the financial sector, based on the recommendations of the working group on the financial sector (Groupe de Réflexion sur le Secteur Financier). This action plan calls for reforms in the banking, insurance, and social security sectors. In the banking sector, the key measures involve strengthening the legislative and judicial framework, reducing nonperforming loans, and divesting the government's interests in the sector. The government will ensure the strict application of the OHADA uniform act on collateral. The authorities will continue to support the efforts of the WAMU Banking Commission to ensure that the prudential regulations are respected and to strengthen the financial structure of credit institutions. The government will complete the restructuring of BIM-SA in August 1999, and will issue a call for bids to open up the capital of the BMCD by September 1999 at the latest. The government's participation in the capital of the other banks will be limited to a maximum of 20 percent by end-March 2002. In the insurance sector, a study aimed at promoting the domiciliation of major risks in Mali will be conducted. Along the same lines, the Caisse de dépôt et de consignation will be restructured. On the social security front, the Caisse de retraite du Mali (CRM) and the Institut national de prévoyance sociale (INPS) will be subject to a detailed audit by March 2000. In accordance with the recommendation of the action plan on microfinance, an advisory group has been set up, and the government will closely monitor the development and solvency of the institutions concerned. The authorities will play an active role within the WAEMU to promote intra-WAEMU financial instruments and the development of the regional financial market, especially the stock exchange, which will provide economic agents with a better environment to finance investments, while offering savers the possibility of diversifying their assets.


V.  Structural Policies

A.  Private Sector Development

30.  With a view to fostering and accelerating sustainable economic growth, the government will step up its efforts to expand the role of the private sector in the economy, particularly by implementing a program to strengthen the private sector that is focused on increasing the level and efficiency of private investment. In this context, the government will (i) maintain the current system of liberalized prices and marketing channels; and (ii) improve the institutional framework by adapting the investment code and the commercial code to the precepts of WAEMU and OHADA. Further progress will be made in implementing the trade liberalization policy and simplifying administrative procedures. The rules on competition will be reviewed in the context of OHADA, and a National Council on Competition will be established to ensure compliance.

31.  The dialogue between the government and the private sector will gain new impetus through the appointment of a moderator by end-July 1999 and the organization of meetings on fundamental issues for private sector development. A work program for the moderator will be prepared by end-September 1999. The authorities are aware of the need to reduce transaction costs and the practical obstacles confronting potential investors. The legislative and regulatory system will be improved on the basis of the study conducted by the World Bank's Foreign Investment Advisory Service (FIAS). Of particular concern is ensuring the correct application of legal and regulatory procedures. The formalities that potential investors must contend with will be pared down by greatly simplifying administrative procedures and reducing the time it takes to obtain the approvals needed to establish new enterprises. To that end, a steering committee with private sector participation will be created by end-July 1999. Steps will be taken to facilitate the access of entrepreneurs to commercial, economic, and technological information. Moreover, the government will (i) strengthen and expand the operations of the one-stop investment window to other sectors; (ii) simplify the procedures for obtaining operating licenses; and (iii) reduce the fees for registering companies. All existing activities related to the promotion of investment will be concentrated in a single center. A real estate agency with private sector participation will be established by end-1999 for the development and management of industrial parks. Finally, the government intends to make industrial sites available to potential investors by using available structures and resources to rehabilitate and expand the SOTUBA industrial park.

B.  Legal and Judicial Environment

32.  The government will pursue its policy of rehabilitating the judicial system to enable it to successfully play its role in regulating social relations, promoting economic development, and guaranteeing the security of investments. To that end, the government will finalize and implement the development program for the judicial system (PRODEJ) by preparing (i) a policy on general judicial reform; (ii) a ten-year judicial system development program; (iii) an action plan; and (iv) an investment plan, following a roundtable to be organized by end-December 1999 to mobilize resources. The government will prepare a professional code of ethics for judges and will enhance the supervision of legal and judicial services, with a view to improving the justice administration by enforcing penalties against those convicted of questionable practices. It will step up inspections of judicial services and the activities of the unit to review and monitor business law. The government will also complete the reform of the code of civil, commercial, and social procedures, in order to facilitate the execution of loan guarantees. Steps will be taken to ensure that commercial court adjudicators are representative of all economic sectors, including banking and insurance. The authorities will provide the clerk's offices of commercial courts with computer resources and improve the judicial environment, specifically by (i) training judges and clerks in reforms of OHADA and the Code of the Interafrican Conference on Insurance Markets (CIMA); (ii) developing and implementing a law awareness and publicity plan; and (iii) establishing arbitration centers in labor and commercial courts.

C.  Public Enterprise Reform

33.  The government is committed to completing the reform of the public enterprise sector by end-March 2002. To that end, it has adopted in June 1999 an action plan for the period 1999-2002 aimed at reducing the number of nonbank public enterprises in the government's portfolio from 33 at end-1998 to 18 by end-March 2002.3 At the same time, the number of public enterprises with state-majority shareholdings will be reduced from 20 to 10. Among the 11 enterprises to be privatized or liquidated in 1999, an agreement in principle has been signed for the privatization of SONATAM, and the divestiture of the government's minority shareholdings in SOMACO-SA, MALITAS, SMPC, and SEMA-SA has been accomplished in June 1999. In addition, by end-1999, the calls for bids for the privatization of UMPP, Opérations Puits, and AFB will be issued, SONAREM will be restructured or liquidated, while SLMTP and ORT will be liquidated. The privatization timetable for 2000-01 will be set forth in the context of action plan.4 To ensure the success of the planned reforms, the government will adopt the draft laws on the basic principles of privatization by September 1999. To increase the efficiency of the privatization operations, the government will take the necessary steps to operationalize the interministerial privatization commission, which will be assisted by a technical assistance committee to execute the action plan. The supplemental proceeds from the privatization of public enterprises will be used, in consultation with Fund staff, to reduce the domestic public debt or to finance public investments. A supplementary budget will have to be prepared for this purpose.

34.  Of the public enterprises remaining under government control, five are scheduled for partial privatization. The authorities will ensure that the calls for bids for EDM (November 1999), the privatization of the management of Aéroports du Mali (ADM, December 1999), and SOTELMA (September 2000) are issued in keeping with the envisaged timetable. The government's minority shareholdings in ITEMA and SUKALA will be reduced to a maximum of 20 percent by end-2001. The government, in cooperation with the government of Senegal, will also redouble its efforts to start up by end-1999 the Société d'Exploitation du Trafic International (SETI), a majority privately owned company that will manage the passengers and freight traffic on the Bamako-Dakar railway line. Finally, the government will publish certified economic and financial statistics for the enterprises in its portfolio no later than September of each year.

D.  Sectoral Policies

Agricultural policy

35.  The government will complete the reorganization of the Ministry of Rural Development and Water by (i) transferring certain activities to the private sector before the end of the program period; (ii) preparing the organizational framework for the decentralization and reduction of staff by end-December 1999; (iii) implementing the organizational framework by end-June 2000; and (iv) completing the public expenditure review of the rural development sector by September 1999.

36.  The government is aware of the crucial importance of the cotton subsector and intends to implement the relevant measures identified in the technical audit of the subsector, which was completed at end-1998. In June 1999, it has adopted, in consultation with the staffs of the World Bank and the IMF, a detailed action plan for the implementation of measures aimed at (i) realizing substantial savings in the area of procurement policy and procedures, and the management of the Malian cotton company (CMDT), particularly with regard to contracting procedures, stock management, and overhead costs; (ii) improving CMDT's financial management and information systems, especially its accounting and management control systems; (iii) improving ginning operations and maintenance policy of CMDT's factories so as to increase capacity utilization; (iv) establishing a marketing department within the CMDT and revising its fiber-marketing policy; (v) undertaking annual financial and management audits of the CMDT and of the Cotton Sector Stabilization Fund through an external auditing firm; (vi) strengthening farmers' organizations and defining the modalities for producers' participation in the capital of the CMDT, with a clearly defined exit strategy; (vii) improving sales pricing of cottonseed and derived products on the basis of an in-depth study of the cottonseed market; and (viii) increasing private sector participation in transport (particularly of seed cotton) and road maintenance activities. The authorities' ultimate objective in implementing this action plan is to increase producer incomes, enhance the competitiveness of the cotton subsector, and prepare it for open competition. A new performance contract between the government, the CMDT and the producers, covering the period 1999-2002 and including the elements of the action plan, will be signed by end-September 1999. The implementation of the performance contract will be supervised by an independent monitoring committee, including representatives of the government, the CMDT, and the producers. Negotiations to raise the producer price of seed cotton will take place in the context of the performance contract. Finally, the authorities will ensure that the amounts borrowed from the Cotton Sector Stabilization Fund by the CMDT will be fully repaid before new loans are granted.

37.  To increase food security, the government will continue to implement the performance contract with OPAM. The government will also step up its efforts to promote agricultural diversification with greater private sector involvement. In particular, it will strengthen the incentive and regulatory framework, as well as the conditions for producer and exporter organizations, and it will facilitate access to information on potential export markets. Finally, the authorities will promote the development of irrigated agriculture by reducing investment, operating, and maintenance costs through increased producer participation in the financing of the sector.

Mining and energy

38.  In the mining sector, the government will finalize and adopt a new mining code by end-July 1999. The purpose of this code is to encourage mining development and operations, including small ventures, while taking account of their environmental impact and the sector's competitiveness. The government will complete the institutional reform of the mining sector in December 1999, including the restructuring of SONAREM.

39.  The government will continue its efforts to ensure the financial equilibrium of EDM and to undertake and complete its privatization. To that end, water and electricity rates were raised by 10 percent and 9.8 percent, respectively, effective April 1, 1999. Decisions on key options of the privatization, that is, the distribution of capital among shareholders, the opening of the sector to competition, and the regulatory system, will be taken by end-July 1999. Decisions will also be made concerning the (i) ownership of assets and the water/electricity mix by July 1999; (ii) adoption of the law on electricity in September 1999; (iii) selection of prequalified groups in October 1999; and (iv) issue of call for bids by November 1999.

Transport and communications

40.  In conformity with its general policy declaration on the transport sector, the government is committed to continue making significant efforts to rehabilitate and build the transportation infrastructures needed for Mali's development, as well as to establish adequate mechanisms to ensure better maintenance, especially of the road network. In view of the shortcomings in the existing budgetary operations, the government is resolved to create the necessary conditions for efficient road maintenance. To this end, it will implement a road maintenance policy aimed at ensuring the timely availability of sufficient resources and a transparent and efficient management. In this regard, the government envisages different options, including (i) streamlining the existing budgetary procedures in order to ensure the availability of budgetary resources in the course of the year for meeting the specific road maintenance needs; or (ii) establishing a body together with mechanisms to define and allocate budgetary resources as a proxy for user fees, as well as procedures to ensure the transparent and efficient management of these resources, and with the users participating in the decision-making process, management and control. Furthermore, to encourage private enterprise development, the government has decided to create an executing agency for road maintenance whose contracting and payments procedures will allow the existing administrative unit to be replaced. The final modalities will be worked out in concert with all the sector partners, the World Bank, and the IMF by end-September 1999, to be implemented under the budget law for 2000. With a view to implementing and deepening its sectoral transport policy, the government will adopt policies and strategies to expand transportation in rural areas and develop backcountry roads, as well as air and river transport.

41.  The government has adopted and will implement a sectoral policy statement on telecommunications calling for greater private sector participation, with the following key objectives (i) to expand the supply of telephone services and make telecommunications services available to a larger number of users, particularly in rural areas; and (ii) to offer diversified and high-quality services at competitive prices that are more representative of actual costs. The authorities will take the necessary measures to improve the performance of the telecommunications sector. As part of this effort, they will adopt a draft law on the telecommunications sector in July 1999, opening up the sector to competition. A regulatory framework for the sector will be adopted in September 1999 and it will be liberalized with the granting of cellular telephony licenses to the private sector in November 1999. The opening up of the capital of SOTELMA will be achieved in two stages (i) the issue of the call for bids for strategic participation in September 2000; and (ii) the public offering specifically targeting national investors within an appropriate timeframe.

Urban planning and housing

42.  The accumulated deficits in housing, basic infrastructure, and utilities are exacerbating the deterioration of living conditions. To remedy this situation, the government will continue to implement the urban development and decentralization project, with a view to contributing effectively to (i) the development of management capacities at the community level; (ii) the expansion of urban services, particularly in the poorest areas; and (iii) the improvement of the real estate market. The government will organize a roundtable on housing in 1999; adopt a revised real estate and property code, and an urban planning code in December 1999; and, during 1999-2002, set up a cadastre for the city of Bamako, as well as an addressing system for the secondary cities. Furthermore, the government will encourage urban communes to create and collect an urban fee starting in 2000. Finally, the authorities will take the necessary measures to ensure the effective sharing of the global tax (impôt synthétique) with the communes as of end-July 1999.


43.  To address the degradation of environmental resources, the government has adopted a National Environmental Action Plan (PNAE) in September 1998. The objective of the PNAE is to improve the management of natural resources and ensure sustainable use by fostering accountability of local governments and other users. The roundtable held in May 1999 examined four priority programs in the areas of (i) natural resources management; (ii) water resources management; (iii) improvement of living conditions; and (iv) management of environmental information.

E.  Improvement of Statistical Data

44.  To improve the quality of available information on economic activity, a special effort will be made to enable the National Directorate of Statistics and Data Processing (DNSI) to complete its revision of the national accounts in line with the United Nations System of National Accounts 1993 (SNA93) guidelines by end-2000. This effort will include training staff, and providing data processing systems and adequate financial resources. To enable the government to better target its antipoverty programs, efforts to collect and analyze social indicators will be stepped up within the framework of the sustainable human resources development observatory. The government will examine and make use of data from the third General Population and Housing Survey, the provisional results of which were published in June 1998. The final results of the population survey will be available by December 2000. The methodology of calculating the industrial production index will be improved by December 31, 1999, particularly by changing the base year and using a larger sample. During 1999-2000, the government will prepare a budget consumption survey and will take the necessary steps to improve the agricultural outlook survey and conduct a general agricultural census.

F.  Technical Assistance

45.  To support implementation of the above-described structural policies and develop available human resources, the government of Mali will continue to need technical assistance from its development partners, primarily in the area of public finance, emphasizing in particular tax assessment and collection. The government will benefit from IMF technical assistance in the implementation of recent reforms of direct and indirect taxation, as well as in the development of measures to improve tax and customs revenue in conjunction with the entry into force of the WAEMU common external tariff.

46.  The World Bank will provide technical assistance for the implementation of sectoral policies, essentially targeting such areas as infrastructure, agricultural services, the financial sector, the social sectors, mining (mining code), and the privatization of SOTELMA and EDM.


VI.  Administrative Decentralization and Institutional Reforms

47.  The administrative decentralization organizes the sharing of responsibility between the central government and the communes in such areas as health and basic education, rural water supply, urban planning, and the environment. This reform aims to improve the mobilization and management of public resources by moving some decision making on resource allocation closer to the grassroots level and directly linking specific investments to the mobilization of local resources. Nineteen urban communes were created in 1998, and new rural communes will be established in 1999 and provided with the appropriate management and supervisory agencies after the communal elections in May and June 1999. The government will ensure that the communes have the needed equipment, as well as the human and training resources to become fully operational. The government will also prepare a table of consolidated financial operations of the communes, based on financial statements to be prepared by each commune beginning in December 1999. In the area of institutional reforms, an administrative decentralization framework will be prepared by the government as part of the national decentralization program. Adoption of this framework will allow for a better match between the territorial distribution of public services provided by the government and its budgetary resources.


VII.  Regional Integration

48.  The authorities will continue to work within the WAEMU toward the implementation of the CET on January 1, 2000, as well as the removal of the tariff barriers applicable to products from within the Union. The government will also participate in a number of ongoing initiatives concerning the harmonization of domestic indirect taxation, the adoption of a Common Investment Code, application of the OHADA uniform acts, and the coordination and convergence of macroeconomic and sectoral policies. In addition, the government will continue its integration efforts in the context of ECOWAS, as well as other subregional organizations, such as the Permanent Inter-State Committee for Drought Control in the Sahelian Zone (ICDS) and the Organization for the Development of the Senegal River (OMVS). In this context, the government intends, in cooperation with its OMVS partners and donors and lenders, to make a success of the Manantali Energy Project and initiate its navigation segment.


VIII.  Social Issues and Human Resources Development

A.  Education

49.  The government will continue to implement the ten-year development program for education (PRODEC) that was adopted in 1998, and will mobilize the needed resources to accelerate the development of basic education, notably for girls, and to improve the overall quality of the education system. The objective is to raise the rate of enrollment in primary education from 50 percent in 1998 to at least 61 percent in 2002.

50.  The government intends to reduce unit costs for education, as well as inefficiencies in the system. The ongoing public expenditure review of the sector, carried out in cooperation with the World Bank, will allow the identification of such inefficiencies and to propose corrective measures that would be the subject of broad-based discussions. To facilitate implementation of PRODEC, the government, in cooperation with its development partners, will update the following by end-September 1999: (i) the ten-year program document; (ii) the financing plan of the program; and (iii) the strategy and timetable for implementation of PRODEC. The financing plan will determine the modalities of (i) hiring and training the required number of teachers and student teachers; and (ii) building classrooms, in order to achieve the enrollment target.

51.  In the secondary and higher education sectors, the government has proposed several actions to improve quality and performance. The elements of this policy will be subject to open discussions with teachers' unions and students to ensure its durability, and to create a stable environment around the reform. Issues to be discussed in this context will include scholarships, teaching hours, the status of some curricula, and cost sharing. The total amount of scholarships for 1999 will be maintained at CFAF 6.2 billion, pending agreement with the World Bank on the steps to be taken to implement PRODEC. Moreover, the government will hold a census of students receiving scholarships and will put in place a computerized monitoring system for scholarships by end-September 1999. Finally, it will propose measures to reduce the level of scholarships, starting in 1999/2000, and to use the savings to improve the quality of higher education.

52.  Along with the other major actions to be taken in conjunction with PRODEC, the government plans to take the following measures by end-December 1999, after discussions with its technical and financial partners: (i) adopt an education framework law; (ii) implement a new institutional plan; (iii) initiate the operations of the PRODEC steering committee; and (iv) put in place an effective information system and a communications program.

B.  Health and Population

53.  The government intends to continue its efforts to improve the quality of health services, expand the coverage of health care, and promote reproductive health. To that end, it will implement the 1998-2002 health and social development program (PRODESS), which is the first segment of the ten-year health and social development plan (1998-2007). The main objectives of PRODESS are to raise the infant immunization rate from 45 percent in 1998 to 76 percent in 2002 and to increase the share of the population receiving primary health care from 40 percent in 1998 to 60 percent in 2002. To this end, 300 health centers will be built in 1999-2002. Staff reinforcement will continue, based on the requirements of PRODESS. A minimum of 200 agents will be hired annually, with assignments to outlying units receiving first priority. Steps will be taken to increase the share of health care in current government expenditure from 10¼ percent in 1998 to 11¾ percent in 2002, in line with PRODESS financing requirements. The institutional reforms of the pharmaceutical sector called for in the PRODESS will be carried out, with a view to ensuring the availability of and quality control over generic medicines.

54.  The annual growth rate of the population, estimated at 3 percent, is still high. The government will focus on the expansion of reproductive health services, including family planning. Information and communications campaigns targeting youth and women will be stepped up, with the participation of all concerned.

C.  Promotion of Women

55.  The government will continue to implement the action plan for 1996-2000, which aims, inter alia, at (i) promoting the education of girls and literacy among women; (ii) fostering the improvement of women's health; and (iii) increasing the participation of women in economic development and, particularly, environmental protection. The government will take the necessary steps to ensure better incorporation of the gender dimension in development programs and will continue its efforts to inform and raise awareness about women's rights, especially with regard to their access to land and credit. The government will finalize and implement a policy supportive of the family and protective of children. Steps will be taken to strengthen coordination capacities in order to develop a policy for promoting the status of women.

D.  Employment and the Civil Service

56.  At the conclusion of the national forum for the formulation of an active employment policy in Mali, organized by the government in November 1998 in Bamako, a comprehensive employment policy was developed. It will be adopted and implemented by the government as part of the action programs designed, inter alia, to improve the labor supply through appropriate training.

57.  The hiring freeze in the civil service has greatly affected its functioning. In 1998, 50 percent of staff were over 45 years of age, while only 2 percent were between the ages of 20 and 30 years. The government has decided to launch a program to inject new blood into the civil service by hiring a small number of individuals each year for sectors other than the social sectors, based on identified needs and the availability of resources. Moreover, to increase professionalism in the civil service, the government will continue applying the merit-based promotion system and implement a training program for government workers. Finally, the government will develop, as part of its decentralization efforts, a civil service reform strategy by December 1999 to improve productivity and ensure the quality of the services it provides to the public. An action plan for the implementation of this strategy will be finalized in June 2000.


IX.  External Sector and Financing Requirements

58.  Mali's adjustment strategy is expected to strengthen economic growth and improve its external position in the coming years. Further investments in the cotton and gold sectors are expected to sustain the growth of exports of these sectors. Nontraditional exports, such as fruits, vegetables, and textiles, are also expected to increase. Import growth will likely remain moderate, as local industries become more competitive and substitutes for some imports become available. However, imports of capital goods are expected to remain important, and imports of construction materials will expand considerably in preparation for the CAN 2002. The result of these developments would be a reduction in the external current account deficit (excluding official transfers) from 9½ percent of GDP in 1998 to 7 percent in 2002.

59.  The external financing needs for the 1999-2002 period are estimated at CFAF 846 billion, including CFAF 225 billion in 1999 and CFAF 213 billion in 2000. According to the projections, the financing of these requirements would include a large component of grants and concessional loans, intended primarily for investment and structural reform programs. IMF loans available under the ESAF arrangement during 1999-2000 amount to CFAF 29½ billion. The World Bank is expected to make available to Mali resources totaling CFAF 96 billion during the period 1999-2000. The government also seeks external assistance from its multilateral and bilateral donors and creditors in the form of debt relief under the HIPC Initiative, starting from the completion point envisaged at end-1999. The government will not sign any new agreements with non-Paris Club creditors, which are inconsistent with the prospective Paris Club agreement expected in the context of the HIPC Initiative. The amount of assistance committed under the current HIPC Initiative is estimated at US$ 128 million in net present value terms; assistance for the period 2000-02 is estimated at approximately CFAF 21 billion. Mali also seeks to qualify for additional assistance under the enhanced HIPC Initiative, once that is agreed upon. With continued prudent macroeconomic policies, the total stock of external public debt is expected to decline from 115 percent of GDP at end-1998 to 96 percent at end-2002. At the same time, the external debt service payments are expected to increase from 7½ percent of exports of goods and non-factor services in 1998 to 13-1/3 percent in 2002.


X.  External Debt Management

60.  In order to place its development strategy on a sound financial basis, Mali will seek to obtain grants and highly concessional loans, and will continue to manage its external debt prudently. Apart from certain specific cases, that are monitored under ceilings agreed upon with the IMF, the government will neither contract nor guarantee any new nonconcessional external loans (with a grant element of less than 35 percent) or having maturities of less than one year, with the exception of short-term credit currently granted for imports and debt-rescheduling or -refinancing operations. All loans contracted or guaranteed by the government will remain subject to the prior approval of the Minister of Finance, who shall ensure that all debt-service payments continue to be made on a timely basis. The government intends to maintain an exchange system that is free of restrictions on payments and transfers for current international transactions.

61.  Debt management is handled by the Directorate-General of Public Debt (DGDP), a central government unit created in 1993. To enable the DGDP to improve debt management and sustain the expected effects of the HIPC Initiative, the government intends to step up the training activities initiated in 1998. A national workshop aimed at capacity building in the areas of debt-data recording and debt-strategy formulation was held in early 1999. The government has also begun to equip the DGDP with advanced technology for public debt management, for which most professional staff of the unit have already been trained.

1The period covered is April 1, 1999 to March 31, 2002.
2The authorities have overhauled the government flow of funds table (TOFE) to comply with the harmonized TOFE project within WAEMU and to enhance transparency. They have also improved the monitoring of externally financed public investment, which resulted in a rise in the recorded level of this investment and that of the overall budget deficit (on a commitment basis and excluding grants) in 1998 by one-half percentage point of GDP.
3By end-March 2002, then, the units remaining from the government's portfolio at end-1998, with state-majority shareholdings, will be: CMDT, ON, RCFM, OPAM, ONP, PPM, PMU-Mali, ADM, COMANAV, and CESPA; and with state-minority shareholdings: EDM, SOTELMA, COMATEX-SA, ITEMA, SOMISY-SA, SEMOS-SA, ACI-SA, and SUKALA.
4Involving the following four enterprises: HUICOMA, Hôtel de l'Amitié, Air Mali, and SONAM.



Table 1. Mali: Summary and Timetable of Macroeconomic and Structural
Adjustment Policies, 1999-2002

  Objectives and Policies Strategies and Measures Implementation Period Technical Assistance

1. Management of
public resources
A. Revenue Enhance the efficiency of tax revenue agencies and revenue collection procedures. Improve the tax identification number (TIN) system by introducing the following measures:
- compulsory use of the TIN by all government agencies; and
- further efforts to re-register all taxpayers.
    Strengthen the efficiency of the large taxpayer unit (DGE) by completing its computerization. September 1999  
    Implement the single-rate value-added tax (VAT) at 18 percent. June 1999 IMF
    Implement the simplified direct taxation system. June 1999 World Bank/ Canadian International Development Agency (CIDA)/IMF
    Strengthen customs administration by further reorganizing customs offices and providing them with appropriate resources. 1999-2002 France/European Development Fund (EDF)/European Union (EU)
    Implement the common external tariff and accompanying measures. January 2000  
    Update and adapt the customs code to simplify procedures and strengthen efforts to combat fraud. September 1999  
B. Expenditure        
Improve the structure of current expenditure. Limit the wage bill to CFAF 68.1 billion in 1999 and limit any increase during 2000-02. 1999-2002  
    Merge the payroll register with the civil service register. September 1999  
    Continue restructuring current expenditure to increase the share of the social sectors. 1999-2002  
    Limit social safety net appropriations to CFAF10 billion per year. 2000-02  
Development expenditure Improve the programming and monitoring of government investment. Improve project identification and evaluation capacity by designing and implementing a training program for staff of the Ministry of Economy and technical departments on project identification and evaluation. 1999-2002 Gesellschaft fur Technische Zusammenarbeit (GTZ)
    Strengthen the monitoring of the financial execution of the investment program by preparing a semiannual report on execution of the investment budget (BSI). 1999-2002  
2. Monetary and
credit policy
Increase the efficiency of the banking system and improve financial intermediation. Pursue a prudent money and credit policy; enforce prudential ratios. 1999-2002  
  Pursue implementation of the reforms of monetary policy instruments adopted by the BCEAO. 1999-2002  
    Pursue an active interest rate policy and ensure that interest rates reflect market conditions. 1999-2002  
    Develop regional financial market instruments and improve the performance of the interbank market. 1999-2002  
    Prepare an action plan with timetable for financial sector reform. September 1999 World Bank
    Restructure BIM-SA. August 1999  
    Launch call for bids for the privatization of BMCD. September 1999  
    Limit government participation in the capital of banks to a maximum of 20 percent. March 2002  
    Prepare an audit of CRM and INPS. March 2000  
    Implement the action plan on micro finance. 1999-2002  
3. Private sector promotion policy Pricing policy. Maintain current system of liberalized prices and marketing channels. 1999-2002  
  Strengthen legal framework. Launch the agency in charge of monitoring judiciary activities. September 1999  
    Finalize PRODEJ and prepare an investment plan. December 1999  
    Continue harmonizing business law with the regional OHADA framework. 1999-2002  
    Computerize commercial court clerks' offices. 1999-2002  
    Ensure that adjudicators of commercial courts represent all sectors of the economy, including banking and insurances. December 1999  
  Strengthen regulatory framework. Appoint a moderator for government-private sector dialogue. June 1999  
    Create a steering committee to formulate specific measures to streamline administrative procedures and minimize steps investors must take. July 1999  
    Strengthen and expand one-stop investment window activities and create a private sector center. 1999-2002  
    Lower registering fees for companies. December 1999  
    With private sector, create real estate agency for industrial park. development and management. December 1999  
    Renovate and expand SOTUBA industrial park. 1999-2000  
4. Public enterprises Improve the efficiency and reduce the size of the public enterprise sector. Finalize the sale of the government's minority holdings in MALITAS, SEMA-SA, SMPC and SOMACO-SA. June 1999  
Privatize SONATAM. June 1999
Adopt a final action plan for the public enterprise sector with a view to reducing substantially the number of public enterprises under government control. June 1999
    Implement the action plan. 1999-2002  
    Adopt legislation relating to the fundamental principles of privatization. September 1999  
    Issue call for bids for the privatization of the management of Aéroports du Mali (ADM). December 1999  
    Liquidate SLMTP and ORT. December 1999  
    Restructure or liquidate SONAREM. December 1999  
    Implement the approved action plan to establish the Société d'exploitation du trafic international (SETI). December 1999  
    Publish economic and financial statistics on enterprises in the government portfolio by end-September of each year. 1999-2002  
5. Agricultural policy Promote and diversify production; enhance food security. Agree with the World Bank and the IMF on an action plan for the cotton sector, including:
- Improvements in financial management;
- Increased private sector participation in the transport sector (seed cotton and fiber); and
- Improved sales pricing of cottonseed.
June 1999  
    Conclude a new performance contract between the government, CMDT, and producers, including the elements of the above action plan. September 1999  
    Establish an independent committee to oversee the performance contract. September 1999  
    Define modalities of producers' participation in the capital of CMDT. September 1999  
    Ensure that any amounts borrowed from the Cotton Sector Stabilization Fund by the CMDT are repaid in full before any new loans are authorized. 1999-2002  
    Finish restructuring the Ministry of Rural Development and Water (MDRE), by means of the following:
    - Transfer selected activities to the private sector; 1999-2002  
    - Prepare a detailed plan for decentralization of the ministry and the streamlining of its staff; and December 1999  
    - Implement the decentralization plan. June 2000  
    Complete the review of public expenditure in the rural development sector. September 1999 World
    Pursue implementation of the performance contract between the government and the Office des produits agricoles du Mali (OPAM). 1999-2002  
6. Environment Improve natural resources management and the living conditions of the population. Implement the priority programs of the national environmental action plan. 1999-2002 UNDP/France/
EU/Food and Agriculture Organization (FAO)
7. Mining sector Create a sectoral environment capable of attracting private investment. Adopt a new mining code. July 1999 World Bank
  Implement the institutional reform of the mining sector. December 1999 World Bank
8. Energy sector Improve the quality of services provided. Update and adopt a strategy for the electrification of Mali (Electrification Plan). December 1999  
    Implement timetable for privatization of EDM by
    - Adopting the recommendations of the investment bank; June 1999
    - Adopting a new electricity law; September 1999
    - Selecting pre-qualified bidders; and October 1999  
    - Issuing call for bids for privatization. November 1999  
9. Transport and communications Increase the efficiency of transportation and telecom-munications. Define the methods of financing road maintenance, in consultation with the World Bank and the IMF. September 1999  
    Implement the measures adopted on road maintenance. January 2000  
    Create an executing agency responsible for road maintenance work. December 1999  
    Formulate a rural transport policy. December 1999  
    Formulate an air transport development policy. December 1999  
    Formulate a river transport development policy. June 2000  
    Adopt a law opening up the telecommunications sector to competition. July 1999  
    Authorize the use of cellular licenses by the private sector. November 1999  
    Issue call for bids for opening up the capital of SOTELMA. September 2000  
10. Urban planning and housing Strengthen infrastructure and facilities in secondary towns and improve quality of urban services. Organize a sectoral roundtable on housing. December 1999  
Adopt an urban planning and construction code. December 1999  
Adopt the revised real estate and property code. December 1999  
Prepare the cadastre for the city of Bamako. 1999-2002  
11. Statistical data Improve the quality, availability, and regular updating of the database. Continue strengthening the Statistical Coordination Committee. 1999-2002 IMF/
AFRISTAT (regional statistical office)
Update the national accounts in accordance with 1993 System of National Accounts. December 2000
Publish the final results of the national population survey. December 2000
12. Social issues        
A. Education Raise the primary education (first cycle) enroll-ment ratio to at least 61 percent in 2002 and improve the quality of education at all levels. Prepare a financial plan with a view to implementing the updated development strategy for education (PRODEC). September 1999  
  Finalize and adopt a policy for recruiting and training teachers. September 1999  
    Conduct a public expenditure review in the education sector. June 1999 World Bank
    Recruit at least 700 teachers per year for primary education. 1999-2002  
    Establish a transparent system for management of scholarships and limit budgetary outlays on scholarships to CFAF 6.2 billion. 1999  
    In agreement with technical and financial partners, implement the plan to restructure higher education. 1999-2000  
B. Health Improve quality and expand coverage of health, social, and family planning services. Pursue the implementation of the 1998-2002 health and social development program. 1999-2002 EDF
  Gradually increase the share of current expenditure on health to 11¾  percent in 2002. 1999-2002  
    Improve the availability, control, and inspection of generic medicines. 1999-2002  
C. Population Control population growth. Pursue implementation of the national population policy by expanding family planning services. 1999-2002  
    Pursue the implementation of the action plan to advance the status of women for the period 1996-2000. 1999-2000  
D. Employment and civil service Restore personnel balance within the civil service. Hire personnel in nonsocial sectors, limiting net recruitment to 200 per year. 1999-2002  
Continue applying the merit-based promotion system. 1999-2002
Develop and implement a civil service staff development plan. 1999-2002  
    Develop a civil service reform strategy. December 1999  
    Prepare an action plan for the implementation of the reform strategy of the civil service. June 2000  
    Implement the reform. 2000-2002  
13. External debt Limit external debt service and maintain trustworthy relations with creditors. Neither contract nor guarantee any new nonconcessional borrowing, particularly at a maturity of less than one year, except as specified under the ceilings for annual programs and in conjunction with conventional short-term financing of imports. 1999-2002  
    Continue to require prior authorization by the Minister of Finance for all government or government-guaranteed loans. 1999-2002  
    Strengthen the Directorate-General of Public Debt (DGDP) through
(i) implementation of new legislation to govern the DGDP;
(ii) increased use of computer systems and personnel training; and
(iii) evaluation of the DGDP's technical assistance needs.
September 1999  
14. Regional integration Ensure the economy's competitiveness and integration into the regional economic area. Adopt a Common Investment Code. 1999-2002  
Ensure the coordination and convergence of macroeconomic and sectoral policies. 1999-2002  
15. Decentraliza-
tion and institutional reforms.
  Implement the decentralization program. 1999-2002  
  Adopt a framework paper on the administrative decentralization of government departments. December 2000  
  Prepare table of consolidated financial operations of communes. 1999-2002  


Table 2. Mali: Selected Economic and Financial Indicators, 1996-2002
  1996 1997   1998
1999 2000 2001 2002

(Annual percentage change, unless otherwise specified)

Income and prices

      GDP at constant prices

4.0 6.7   4.6 3.6 6.4 5.0 5.0 5.0

      GDP deflator

6.3 1.1   4.2 4.8 2.2 2.5 2.5 2.5

      Consumer price index

            Annual average

6.5 -0.7   4.2 4.1 1.0 1.4 2.5 2.5

            End of period

2.8 0.9   4.5 3.0 2.5 2.5 2.5 2.5

External sector


      Exports, f.o.b.

0.4 48.0   2.6 0.1 5.3 3.8 6.3 7.5

      Imports, c.i.f.

5.4 11.2   2.3 3.8 2.2 4.6 4.8 5.5

      Export volume

2.2 49.4   2.6 -1.8 11.3 1.6 3.8 3.8

      Import volume

6.0 11.2   3.1 5.9 4.5 2.9 3.5 3.8

      Terms of trade (deterioration -)

-1.3 -0.9   0.8 4.0 -3.3 0.5 1.2 1.9

      Nominal effective exchange rate1

-0.3 -3.8   1.4 1.7 ... ... ... ...

      Real effective exchange rate1

3.6 -6.0   3.6 4.4 ... ... ... ...

Consolidated government operations



31.1 11.6   6.9 10.9 8.9 9.2 9.6 9.9

      Expenditure and net lending2

9.3 9.9   5.8 11.1 6.9 5.5 4.6 5.7

Money and credit


      Net domestic assets3

-10.4 10.6   5.7 14.4 -0.1 3.5 5.9 5.4

            Credit to the government3, 4

-14.2 -0.1   -0.1 -0.6 0.0 -1.2 0.0 -0.5

            Credit to the economy

29.0 14.5   5.5 28.1 -1.5 7.5 9.5 9.4

      Money and quasi money (M2)

12.1 8.6   4.8 4.3 9.0 8.3 7.6 7.6

      Velocity (GDP/M2)

4.3 4.3   4.5 4.4 4.4 4.4 4.4 4.4

      Interest rate5

5.0 3.8   4.7 4.8 ... ... ... ...
(In percent of GDP, unless otherwise specified)

Overall fiscal deficit
      (commitment basis)2, 6


      Excluding grants

-8.0 -7.9   -7.5 -8.1 -7.6 -6.9 -6.0 -5.2

      Including grants

-0.9 -2.1   -2.8 -2.4 -3.6 -3.2 -2.5 -2.0


Gross domestic investment

22.9 20.6   24.0 20.9 21.2 21.9 21.9 21.9


9.0 8.1   11.3 9.2 8.6 8.5 8.0 7.8


13.9 12.5   12.7 11.7 12.6 13.4 13.9 14.1

Gross domestic savings

7.4 10.3   14.7 10.3 11.7 12.7 13.3 13.9


4.4 3.7   4.6 4.9 4.8 5.3 5.6 6.0


3.1 6.5   10.1 5.4 6.9 7.4 7.7 7.9

Gross national savings


      (excluding official transfers)

8.9 11.1   15.2 11.3 12.7 13.5 14.1 14.9

External current account balance

      (deficit -)2

      Excluding official transfers

-14.0 -9.5   -8.8 -9.6 -8.5 -8.4 -7.8 -7.0

      Including official transfers

-4.9 -3.0   -2.8 -3.3 -3.0 -3.2 -3.1 -2.6

External public debt

111.3 117.7   114.1 114.6 110.0 106.3 101.9 96.1

Domestic public debt

6.2 5.5   ... 4.1 2.7 2.7 2.7 2.7
  (In percent of exports of goods and nonfactor services)

Debt-service ratio

            Before debt relief 29.4 15.0   12.2 11.6 12.3 13.4 14.3 14.8
            After debt relief (including HIPC
                  Initiative )
14.1 11.0   8.2 7.4 12.3 11.6 12.7 13.3

  (In billions of CFA francs)    

GDP at current market prices

1,360.7 1,467.6   1,599.2 1,593.1 1,732.8 1,865.1 2,007.1 2,159.3

Sources: Malian authorities; and Fund staff estimates and projections.
1Period average; depreciation (-).
2Including interest due to the People's Republic of China and the Russian Federation.
3Annual change in percent of beginning-of-period money stock.
4Including the securitized consolidated debit balances of the Banque de Développement du Mali and the Cotton Sector Stabilization Fund.
5End-of-period interest rate on the West African Economic and Monetary Union money market.
6Before debt rescheduling; after debt cancellation obtained through 1996.


Table 3. Mali: External Financing Requirements and Resources, 1996-20021
(In billions of CFA francs)
  1996 1997 1998 1999 2000 2001 2002

Requirements 313.6 191.8 162.2 224.7 213.1 206.3 202.2
      Current account deficit, excluding official transfers 2     190.1     139.3     152.9     146.7     155.8     157.1     151.3
      Debt amortization2 60.9 39.0 25.9 26.3 27.8 31.6 36.3
      IMF repurchases -4.0 -4.1 -6.4 -6.8 -10.1 -13.1 -16.2
      Arrears (increase-) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
      Change in net foreign assets (increase+) 3 84.8 19.2 -23.2 58.5 39.7 30.8 30.9
      Adjustment4 -18.2 -1.6 13.0 0.0 0.0 0.0 0.0
Resources 313.6 191.8 162.2 224.7 213.1 206.3 202.2
      Official transfers5 124.1 95.2 99.7 97.3 95.5 95.5 95.5
      Long-term public loan disbursement (gross) 5 102.1 72.7 83.9 85.4 81.0 82.0 83.0
            Of which: IDA 43.1 43.7 28.3 50.7 45.7 46.8 47.3
      Private capital (net) 30.9 -8.0 -29.5 4.0 6.0 10.0 12.0
      Debt relief, including HIPC assistance 41.0 0.7 0.0 0.0 7.1 7.1 7.0
      Debt under negotiation/moratorium6 0.0 14.6 0.0 0.0 0.0 0.0 0.0
      Use of IMF resources (ESAF) 15.5 16.6 8.2 18.9 10.6 10.5 4.8
      Exceptional financing 0.0 0.0 0.0 19.1 12.9 1.3 0.0
Memorandum item:
      Exchange rate: CFA francs per SDR 742.7 803.1 800.0 ... ... ... ...

Sources: Malian authorities; and estimates and projections of the Fund and World Bank staffs.
1 Data may not add up due to rounding.
2 After debt forgiveness.
3Excluding the change in the net position vis-a-vis the Fund.
4 Including revaluation adjustment and errors and omissions.
5Includes both existing and expected new commitments.
6 Russian Federation and China.


Table 4. Mali: Selected Social and Demographic Indicators
  Latest Single Year
          Same Region/
Income Group
  1970-75 1980-85 1992-97   Sub-

Total population, midyear (millions) 5.9 7.4 10.3   612.4 2,035.6
      Growth rate (% annual average) 2.0 2.3 2.3   2.2 1.7
Urban population (% of population) 16.2 21.0 28.1   32.3 28.4
Total fertility rate (births per woman) 7.1 7.1 6.6   5.5 4.0
(% of population)  
National head count index .. .. ..   .. ..
      Urban head count index .. .. ..   .. ..
      Rural head count index .. .. ..   .. ..
GNP per capita (US$) 130 170 260   510 350
Consumer price index (1995=100) .. .. ..   118 122
Food price index (1995=100) .. .. ..   .. ..
Income/consumption distribution  
Gini index .. .. 50.5   .. ..
Lowest quintile (% of income or consumption) .. .. 4.6   .. ..
Highest quintile (% of income or consumption) .. .. 56.2   .. ..
Social indicators  
Public expenditure  
      Health (% of GDP) .. .. 2.0   2.5 1.0
      Education (% of GNP) .. 3.2 2.2   4.3 ..
      Social security and welfare (% of GDP) .. 1.8 ..   .. ..
Net primary school enrollment rate  
(% of age group)  
      Total .. 18 28   .. ..
            Male .. 22 33   .. ..
            Female .. 13 22   .. ..
Access to safe water  
(% of population)  
      Total .. .. 48   47 69
            Urban .. .. 56   74 80
            Rural .. .. 20   32 66
Immunization rate  
(% under 12 months)  
      Measles .. .. 56   58 74
      DPT .. .. 52   53 76
Child malnutrition (% under 5 years) .. .. 40   .. ..
Life expectancy at birth  
      Total 39 43 50   51 59
            Male 37 43 49   49 58
            Female 41 44 52   52 60
      Infant (per thousand live births) 203 180 118   91 82
      Under 5 (per thousand live births) 391 292 235   147 118
      Adult (15-59)  
            Male (per 1,000 population) 537 454 416   428 274
            Female (per 1,000 population) 416 362 334   375 255
      Maternal (per 100,000 live births) .. .. 580   .. ..

Source: World Bank, World Development Indicators,1999, CD-ROM.


Table 5. Mali: List of Selected Acronyms
ACIAgence de Cession Immobilière
ADMAéroports du Mali
AFBAbattoir Frigorifique de Bamako
BCEAOBanque Centrale des Etats de l'Afrique de l'Ouest
BICBénéfices Industriels et Commerciaux
BIMBanque Internationale pour le Mali
BMCDBanque Malienne de Crédits et de Dépôts
CANCoupe d'Afrique des Nations
CESPACentre de Services de Production Audiovisuelle
CIMAConférence Internationale des Marchés des Assurances
CMDTCompagnie Malienne pour le Développement des Textiles
CNARCompagnie Nationale d'Assurance et de Réassurance
CNPEComité National de Politique Economique
COMANAVCompagnie Malienne de Navigation
COMATEXCompagnie Malienne des Textiles
CRMCaisse de Retraite du Mali
DGDPDirection Générale de la Dette Publique
DGEDivision des Grandes Entreprises
DNAEDirection Nationale des Affaires Economiques
DNCCDirection Nationale du Commerce et de la Concurrence
DNSIDirection Nationale de la Statistique et de l'Informatique
ECOWASEconomic Community of West African States
EDMEnergie du Mali
EMAMAEntreprise Malienne de Maintenance
FIASForeign Investment Advisory Service
GRSFGroupe de Réflexion sur le Secteur Financier
HUICOMAHuilerie Cotonnière du Mali
IGRImpôt Général sur le Revenu
INPSInstitut National de Prévoyance Sociale
ITEMAIndustrie textile du Mali
ITSImpôt sur les Traitements et Salaires
MALITASMali Tombouctou Air Service
OHADAOrganisation pour l'Harmonisation du Droit des Affaires en Afrique
ONOffice du Niger
ONPOffice National des Postes
OPAMOffice des Produits Agricoles du Mali
ORTOffice des Relais Touristiques
PDDSSPlan Décennal de Développement Sanitaire et social
PMU-MALISociété du Pari Mutuel Urbain-Mali
PNAEPlan National d'Action Environnementale
PPMPharmacie Populaire du Mali
PRODECProgramme Décennal de Développement de l'Education
PRODEJProgramme Décennal de Développement de la Justice
PRODESSProgramme Décennal de Développement Sanitaire et Social
RCFMRégie du Chemin de Fer du Mali
SEMASociété d'Equipement du Mali
SEMOSSociété d'Exploitation des Mines d'Or de Sadiola
SETISociété d'Exploitation du Trafic International
SLMPTSociété de Location de Matériels de Travaux Publics
SMPCSociété Malienne de Produits Chimiques
SOMACOSociété Malienne de Conserves
SOMISYSociété des Mines de Syama
SONAMSociété Navale Malienne
SONAREMSociété Nationale de Recherche et d'Exploitation Minière
SONATAMSociété Nationale des Tabacs et Allumettes du Mali
SOTELMASociété des Télécommunications du Mali
SUKALAComplexe Sucrier du KALA Supérieur
TCITaxe Conjoncturelle à l'Importation
TDPTaxe Dégressive de Protection
TOFETableau des Opérations Financières de l'Etat
UMPPUsine Malienne des Produits Pharmaceutiques
WAMUWest African Monetary Union
WAEMUWest African Economic and Monetary Union