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IMF says Mali’s economy in distress

The International Monetary Fund (IMF) said Mali’s economy is in distress following the political and security crisis which engulfed the West African country last year, an IMF statement said Thursday.

“In 2012, Mali’s economy suffered from the political and security crisis. The occupation of Northern Mali disrupted agricultural production and trade. The unstable political and precarious security situation in the South dampened investment,’’ a senior IMF official, Christian Josz, who led a mission to Bamako, Mali, was quoted by the statement as saying.

The mission was undertaken from 28 February to 13 March .

Mr. Josz also said that “travel to Mali dropped sharply, hitting hard on the commerce and tourism sectors. Donors suspended budget support and much of their project aid and in response, the government cut most capital spending, and construction and public works contracted sharply”.

He, however, stated: “Thankfully, the 2012-13 harvest turned out well, and the mining sector also contributed to growth. Altogether, real GDP in 2012 shrank by 1.2 percent and inflation increased to 5.3 percent because of poor harvest in 2011.”

He said that following recent favourable security and political developments, the economic prospects for 2013 are encouraging.

“In 2013, real GDP growth should reach 4.8 percent, and thanks to the bountiful harvest, inflation should drop below 3 percent,” said Mr. Josz.

The IMF official also said that several donors had announced the resumption of their development aid following the adoption by the government of a road map to re-establish the administration in the North and organise elections.

Mr. Josz disclosed that, “the government is preparing a supplementary budget to allocate that aid. It will be used to finance implementation of the road map and to support the private sector by paying arrears and by resuming capital spending.

“Thanks to the military intervention by foreign partners, defence spending should stay within the envelope of the initial budget.”

“Even so, urgent needs remain unaddressed. The government will present these to donors at the Round Table planned for May in Brussels in the hope of covering its remaining financing
gap for 2013 and the coming years,’’ he added.

The statement further said that the IMF supported Mali in January with a disbursement, under the IMF’s Rapid Credit Facility (RCF), of US$18 million (CFA 9 billion), and would
continue to support Mali as it emerges from its crisis.

PANA learnt that the during the visit, IMF mission reached preliminary agreement on continued support to Mali under the RCF.

The mission met with Mali’s Prime Minister, Django Cissoko, the Minister of Economy, Finance and Budget, Tièna Coulibaly, Delegated Minister of Budget, Marimpa Samoura, as well as Konzo Traore, the National Director, Central Bank of West African States (BCEAO).

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