Washington, DC: The Executive Board of the International Monetary Fund (IMF) approved today a disbursement of US$129 million (SDR 93.3 million) under the Rapid Credit Facility (RCF) to address the urgent needs resulting from the floods. The RCF is accompanied by an 11-month Staff Monitored Program (SMP). SMPs are agreements between member countries and IMF staff to monitor the member country's economic program and re-establish a track record of reform implementation.
Mali is facing significant challenges from severe flooding in 2024, which caused extensive damage to infrastructure, agriculture, and livelihoods. These challenges add to existing pressures from persistent security challenges and widespread food insecurity, further weighing on GDP growth.
The RCF disbursement is expected to help the authorities address the urgent balance of payment needs resulting from the floods. These include financing imports for essential items and critical infrastructure.
As part of the SMP, the authorities have committed to strengthening fiscal governance, improving public financial management, and ensuring transparency and accountability in the use of RCF funds. The authorities are also committed to protecting the most vulnerable by strengthening the social safety net and addressing food insecurity.
The SMP also envisages for fiscal policy to ensure sustainability amid tight financing conditions and high borrowing costs. Reforms include enhancing domestic revenue mobilization by broadening the tax base and strengthening revenue and customs administration. Improving spending efficiency remains critical, such as addressing vulnerabilities in state-owned enterprises and improving their oversight, particularly the electricity provider Energie du Mali (EDM), while safeguarding public investment and protecting vulnerable households.
Moreover, it is important for the authorities to establish a transparent medium-term plan to clear domestic and external arrears.
Following the Executive Board discussion, Mr. Okamura, Deputy Managing Director and Chair, issued the following statement:
"Mali faced significant economic headwinds in 2024. Following an unprecedented heatwave in April, it suffered extreme flooding of a one-in-fifty-year magnitude in the second half of the year. Heightened security risks, lower gold production, ongoing power outages, and a sharper-than-expected-fiscal consolidation all weighed on growth. Many of the economic headwinds are likely to persist in 2025, and recently announced cuts to official development assistance are expected to create additional pressures.
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"Emergency financing under the Rapid Credit Facility (RCF) will help address urgent balance-of-payments needs arising from the flooding. This exogenous shock has caused significant damage to public infrastructure and loss of livelihoods, exacerbating the already-elevated food insecurity and internal displacement.
"In parallel to the RCF emergency financing, an eleven-month Staff-Monitored Program has been recently approved by IMF management, at the request of the authorities, and includes measures to ensure transparency and accountability in the use of RCF resources alongside other structural benchmarks to improve fiscal governance and transparency. Further governance reforms are essential for ensuring the efficient use of public funds, rebuilding credibility with development partners, and enhance the business climate.
"Mali's risk of external and overall debt distress is assessed to be moderate, although downside risks have increased since the previous debt sustainability analysis in 2023. Making progress on improving the profitability and financial situation of state-owned enterprises, clearing domestic and external arrears, maintaining a reliable and stable regulatory environment, continued fiscal discipline, and reducing policy uncertainty will be important for ensuring macroeconomic stability and boosting medium-term growth."
