Mali Faces Economic Crisis

Malian Economy Faces Financial Crisis Amid Security Crisis

Bamako, Mali - A Severe Economic Struggle

Mali’s economy is facing a severe financial crisis, with the country struggling to maintain stability in the midst of a protracted security crisis that has been ongoing since 2012. To address this issue, the International Monetary Fund (IMF) has approved a financial assistance package worth $200 million over three years to support the government’s efforts towards inclusive growth and economic diversification.

IMF’s Mission Chief Highlights Importance of Program

The IMF’s mission chief for Mali, Boriana Yontcheva, highlighted the importance of the program in addressing the country’s challenging security situation. “Mali is a fragile, low-income country facing a difficult security situation that has long-lasting economic and humanitarian impacts,” she said. “Our program aims to support the government’s efforts to create fiscal space, reform the energy sector, and improve governance and transparency.”

Key Areas of Focus

The program focuses on three key areas:

Creating Fiscal Space: Safeguarding priority social and infrastructure spending while accommodating necessary security expenditures
Reforming the Energy Sector: Improving the efficiency and cost-effectiveness of electricity provision to businesses and households
Improving Governance and Transparency: Strengthening tax and customs administration, improving public financial management, and addressing corruption

Efforts to Improve Domestic Revenue Mobilization

To achieve these objectives, the government’s program supported by the ECF includes corrective measures to:

Address the sharp decline in tax revenue collection experienced in 2018
Modernize the tax administration
Enforce taxpayer compliance
Improve the effectiveness of mining sector taxation
Early signs indicate that these efforts are beginning to bear fruit, with collections broadly as targeted

Reinforcing Public Financial Management

Reinforcing public financial management will also help ensure that the public purse is used effectively. The program aims to put Mali’s electricity company (EDM) on a sound financial footing.

The Malian government has allocated resources to improve the delivery of social services, particularly in healthcare and education, in regions affected by the security crisis. However, addressing corruption remains a critical issue.

Strengthening Tax and Customs Administration

Strengthening tax and customs administration is seen as a key measure towards improved governance, while further improvement in public financial management and better follow-up on governance issues flagged by the Office of the Auditor General are also important steps.

IMF’s Support to Mali

The IMF’s support to Mali comes at a crucial time, when the country needs to strengthen its economy to ensure stability and growth. The program is designed to help Mali achieve strong and inclusive growth through job creation, economic diversification, and greater resilience.