(Ecofin Agency) - The International Monetary Fund (IMF) announced on April 30 that it has reached an agreement with the Malian transitional authorities on an emergency financing of $120 million.

The financing, which will be provided under the IMF's Rapid Credit Facility "exogenous shocks" window, will primarily support the provision of food and targeted cash transfers to people facing acute food insecurity in the central and northern regions.

The IMF noted that the Malian economy has recently been hit by multiple exogenous shocks, including the Russia-Ukraine war, the Red Sea maritime blockade, and the contraction of available financing in the region. These shocks have contributed to rising import costs of essential goods such as food, fertilizers, and materials needed to support displaced populations.

 "These challenges have strained the state budget, elevated the cost of living, and heightened food insecurity, estimated to affect 24 percent of the population, up from 15% a year ago," the statement read.  

 The IMF further indicated that Mali's real GDP growth is expected to slow to 3.8% in 2024 from 3.9% in 2023, due to severe power outages, the negative effects of the withdrawal of the UN peacekeeping mission (MINUSMA) on the tertiary sector, a decline in gold production, and uncertainty surrounding the postponement of elections and Mali's exit from ECOWAS.

 However, economic growth is projected to rebound to 4.4% in 2025. The main downside risks include continued power outages, deteriorating security, growing financial stability risks amid rising government financing needs, volatility in international commodity prices, tightening global financial conditions, and climate vulnerabilities.