The Executive Board of the International Monetary Fund (IMF) Monday completed the first and second reviews of Mali’s performance under an economic programme supported by a three-year Extended Credit Facility (ECF) arrangement and approved immediate disbursement of US$11.7 million to the West African country.
In a statement made available to PANA here Tuesday, the board noted that Mali’s economic recovery remains fragile.
The amount brings total disbursements under the arrangement to about US$20.5 million.
Following the Executive Board’s discussion, IMF Deputy Managing Director and Acting Chair Naoyuki Shinohara said Mali’s economic recovery and prospects are clouded by a difficult security situation and the risk of an Ebola epidemic.
He said serious lapses in public financial management caused delays in the first review of the Fund-supported programe and the provision of general budget support.
“In order to restore business, consumer, and donor confidence, it is essential to tighten the implementation of budget and procurement rules, building on the results of recent official audits,” Shinohara suggested.
“The 2015 budget puts public finances back on a sustainable path. It appropriately emphasises revenue mobilisation, priority spending for growth and human development, and limited recourse to domestic financing, leaving room for bank financing of the private sector,” he said.
According to the IMF deputy chief, further efforts are urgently needed for Mali to strengthen public financial management; and to accelerate tax policy and administration reforms in order to raise the tax yield.
“Tighter expenditure control, supported by improvements in Treasury management, will help prevent the accumulation of arrears,” he said. “A conclusion of the audit of the outstanding domestic arrears and their rapid clearance will support the economic recovery.”
In the view of the IMF Executive Board, reforms aimed at improving the business environment are essential to boosting Mali’s medium-term growth prospects.
“Progress in strengthening the financial system, lightening the administrative burden for taxpayers, placing the electricity company’s finances on a sustainable footing, and combating corruption will be critical in the period ahead,” Shinohara added.