(Ecofin Agency) - Following the completion of a virtual review mission to Mali, the International Monetary Fund reached a preliminary agreement with the country’s authorities for the pursuit of reforms undertaken by the government under the IMF-led Extended Credit Facility.

In a January 13 statement, the institution said the disbursement of $58 million will be approved for Mali once this staff-level deal is validated by the Executive Board. The resources will be provided as part of the Extended Credit Facility arrangement, which is designed to help Mali reduce expenditure pressures, increase tax revenues and improve public financial management while strengthening governance for more equitable growth.

IMF said the security, health, and economic shocks facing the country have disrupted the implementation of reforms. “Fiscal deficits are expected to widen to 5.5% of GDP in 2020 and 2021 to accommodate the needed pandemic response and weaker economic environment,” the Fund said, however stressing that “emerging pressures from higher wage demands, increase in public employment, poor performance in a few state-owned enterprises and tight external financing are forcing cuts in investment spending.”

For the months to come, the institution encourages the Malian government to implement “deeper reforms” to readjust the economy.

“The fiscal position needs to be strengthened gradually to ensure its sustainability. Staff and the authorities agreed that fiscal adjustment will start in 2022, with the deficit targeted to narrow to 4½ percent of GDP that year and further to 3 percent of GDP WAEMU ceiling by 2024,” said Aliona Cebotari, who led the IMF mission.

According to estimates, the Malian economy fell by 2% in 2020 and is expected to bounce back at 4% in 2021.

Moutiou Adjibi Nourou