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IMF: IMF Executive Board Completes Sixth Review Under Mali's PRGF
Arrangement and Approves US$2.1 Million Disbursement
(M2 PressWIRE Via Thomson Dialog NewsEdge)
RDATE:31102007
The Executive Board of the International Monetary Fund (IMF) today
completed the sixth and final review of Mali's economic performance
under the Poverty Reduction and Growth Facility (PRGF) arrangement. The
completion of the review allows the release of SDR 1.34 million (about
US$2.1 million) to Mali, which will bring the total amount drawn under
the arrangement to SDR 9.33 million (about US$14.6 million).
In completing the review, the Executive Board also approved Mali's
request for waivers of nonobservance of performance criteria pertaining
to the implementation of two structural performance criteria on the
Caisse des Retraites du Mali (CRM) and the Banque de l'Habitat du Mali
(BHM) as well as the nonobservance of the performance criterion on the
concessionality of external financing. The Executive Board also
approved a short extension of the arrangement to November 30, 2007 to
allow the final disbursement. The three-year PRGF arrangement with Mali
was approved on June 23, 2004 (see Press Release No. 04/125) in a total
amount of SDR 9.33 million (about US$14.6 million).
The PRGF is the IMF's concessional facility for low-income countries.
PRGF-supported programs are based on country-owned poverty reduction
strategies that are adopted in a participatory process involving civil
society and development partners and articulated in the country's
Poverty Reduction Strategy Paper. This is intended to ensure that
PRGF-supported programs are consistent with a comprehensive framework
for macroeconomic, structural, and social policies to foster growth and
reduce poverty. PRGF loans carry an annual interest rate of 0.5 percent
and are repayable over 10 years with a 5-year grace period on
principal payments.
Following today's Executive Board discussion of Mali, Mr.
Murilo Portugal, Deputy Managing Director and Acting Chair, stated:
"Mali's economic program supported by the IMF through its Poverty
Reduction and Growth Facility has broadly succeeded in maintaining
macroeconomic stability. As a result of the authorities' efforts and
the Multilateral Debt Relief Initiative, the public debt is well within
sustainable levels.
However, economic growth per capita remains below the level required to
significantly reduce poverty or achieve the Millennium Development
Goals (MDGs), and the economy remains highly vulnerable to external
shocks.
"Mali needs to accelerate growth and poverty reduction through vigorous
implementation of structural reform. Important reforms are under way,
although implementation of some measures under the program has remained
incomplete. A key reform would be to disengage the government from
commercial activities, including those in the cotton, banking, and
telecommunications sectors. In this context, the authorities' renewed
commitment to restructure the state-owned housing bank and improve
governance at the loss-making state-owned cotton ginning and energy
companies is welcome.
"Fiscal policy should maintain its focus on macroeconomic stability.
The authorities are committed to closing the 2008 budget financing gap
through spending measures, if necessary, while protecting social
outlays. It will be important that legislation to reform the civil
service pension fund be submitted to the national assembly soon, as it
remains essential to longer-term fiscal sustainability.
"It is important to keep strengthening debt management and increasing
the transparency of borrowing. The recent nonconcessional financing for
the electricity sector was an exceptional stop-gap measure in response
to urgent needs for power generation. Going forward, it will be
important to avoid recourse to high-cost financing to maintain debt
sustainability.
"With a renewed political mandate, the authorities have an opportunity
to reinvigorate the reform agenda. Implementation of the Poverty
Reduction Strategy through a detailed action plan could give a renewed
impetus to reforms and accelerate progress towards achieving the MDGs,"
Mr. Portugal said.
CONTACT: Public Affairs, Media Relations, IMF External Relations
Department
Tel: +1 202 623 7300
Tel: +1 202 623 7100
Fax: +1 202 623 6278
Fax: +1 202 623 6772
((M2 Communications Ltd disclaims all liability for information
provided within M2 PressWIRE. Data supplied by named party/parties.
Further information on M2 PressWIRE can be obtained at
http://www.presswire.net on the world wide web. Inquiries to
info@m2.com)).
Copyright 2007 M2 Communications Ltd.
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