Press Release No. 09/414

Press Release: Statement by an IMF Mission to Mali

November 17, 2009

A mission of the International Monetary Fund (IMF) visited Bamako during October 30–November 11 to hold discussions for the third review under Mali’s Poverty Reduction and Growth Facility (PRGF) arrangement with the Fund. The team met with Prime Minister Modibo Sidibé, Minister of Finance Sanoussi Touré, other ministers and senior officials of the government, and representatives of civil society, and the private sector. Mr. Xavier Maret, IMF mission chief for Mali, issued the following statement today in Bamako:

“Despite the challenges posed by the difficult international environment, the Fund-supported program remains on track and continuing prudent macroeconomic policies augurs well for program objectives to be met at end-2009. Thanks to a good rainy season, economic growth should reach 4.3 percent in 2009 and annual inflation should be reduced sharply to below 2 percent at year-end. The basic fiscal deficit, which excludes foreign financed investment spending, is projected to remain within the program limit of 1.5 percent of GDP. The government of Mali is also making good progress in reducing its payment float and domestic arrears, including through credits from the regional central bank that are equivalent in amount to the recent General Allocation of Special Drawing Rights (SDR) by the Fund.

“Structural reforms to improve treasury and budgetary management, support the agricultural sector, and strengthen the banking system are also being implemented satisfactorily.

“Looking forward, preliminary understandings were reached during the mission’s visit on the main elements of Mali’s economic program for 2010. Growth in 2010 is projected to reach 4.8 percent, with annual inflation remaining at low levels. The basic fiscal deficit is targeted at 1.6 percent of GDP, which reflects a 12-percent increase in domestically-financed poverty-reducing health and education spending, and 0.5 percent of GDP in capital spending financed by the privatization receipts of the telecommunications parastatal SOTELMA. The mission welcomes the government’s transparency and vision in announcing the spending plan for the SOTELMA resources. It will be important that these funds be used on non-recurrent expenditure items, with special attention paid to the quality of spending, and that the underlying fiscal consolidation be preserved.

“Provided that final understandings can be firmed up on fiscal policy for 2010, the Executive Board of the IMF could consider the third review of Mali’s economic performance under the PRGF arrangement in January 2010.”