The International Monetary Fund’s (IMF) Executive Board has approved a US$129 million (SDR 93.3 million) allocation to Mali under the Rapid Credit Facility (RCF), providing urgent assistance to mitigate the economic consequences from devastating floods in 2024.
The fund is supplemented by an 11-month Staff Monitored Program (SMP) to improve macroeconomic stability and governance.
Mali is dealing with a number of overlapping issues, such as severe flooding, continuous security concerns, food insecurity, and limited access to external financing.
The recent floods, regarded as a once-in-fifty-year catastrophe, have caused severe damage to infrastructure and crops, disrupted key services, exacerbated food poverty, and boosted internal displacement.
The emergency financing will help the government meet pressing balance-of-payments needs, including the import of essential goods and the rehabilitation of critical infrastructure.
The SMP, meanwhile, sets a framework for economic reform and enhanced fiscal discipline.
Under the SMP, the Malian authorities have committed to strengthening fiscal governance, improving public financial management, and ensuring transparency and accountability in the use of IMF funds.
Key reform areas include broadening the tax base, enhancing customs and revenue administration, and improving oversight of state-owned enterprises, particularly Energie du Mali (EDM).
The program also emphasizes safeguarding public investment and protecting the most vulnerable through expanded social safety nets and targeted efforts to combat food insecurity.
Mali plans to implement a transparent, medium-term strategy to clear both 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.
“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.”
