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HomeNewsTanzania: Mali's economy revs up as security situation normalises

Tanzania: Mali’s economy revs up as security situation normalises

After its zero growth in 2012 due to the insecurity crisis, Mali’s economy is returning to its normal growth path, with an increase in real gross domestic product (GDP) of 5.8%, the International Monetary Fund (IMF) has confirmed.

Following the Fund’s mission that visited Bamako for discussions with the country’s authorities, from 11-25 September, IMF said late Friday that projections for 2015 are for real growth to continue at 5.5% and inflation to remain well below the central bank’s 3% target.

According to IMF mission leader, Christian Josz, a poor harvest in 2013 kept growth at only 1.7%. Currently, inflation remains low at 1% after -0.6% last year.

In a statement, sent to PANA here Saturday, the mission said it welcomed the strengthening of structural reforms in Mali, notably those aimed at improving tax administration, expenditure control and debt and treasury management.

While in Bamako, the mission had discussions with various Malian leaders, including President Ibrahim Boubacar Keïta and Prime Minister Bouaré Fily Sissoko on preparation for the first and second review of the government’s economic programme, supported under the IMF’s Extended Credit Facility (ECF) which was approved in December 2013.

“The mission welcomes the budget the Government intends to present to the National Assembly in October,” Josz said, explaining that the proposed budget, which will be the basis for the ECF programme in 2015, targets a global deficit of 4.4% of GDP.

Three quarters of the budget deficit would be financed with donor support, and the rest would come from the regional financial market, the IMF statement indicated.

“The government will soon submit a new supplementary budget to the National Assembly to regularize the about CFA 30 billion in extra-budgetary spending which occurred in 2014 to be financed in the regional financial market,” said the statement.

“This will bring the overall budget deficit to 5.8% of GDP, compared to 5.2% in the supplementary budget approved in August.”

Meanwhile, the IMF mission reached an agreement that will permit “going forward” with both the first and second reviews of the ECF arrangement. The reviews will be presented to the IMF Executive Board for approval in December 2014.

According to the mission’s statement, a resolution was found for issues raised by the extra-budgetary spending – on a presidential plane and a military contract – which delayed the first review, originally scheduled for June 2014.

The resolution includes: publishing the two independent audit reports on these transactions; reporting on the sanctions process; redressing the overbilling in the military contracts; subjecting future military procurement to stringent controls; incorporating all extra-budgetary spending in the budget, and stopping such practices in the future.

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