Washington: The International Monetary Fund announced a USD 18.4 million quick financial aid to Mali as a support to maintain macroeconomic stability and growth during the next 12 months, as part of a broad-based support by its development partners.
"The disbursement under the Rapid Credit Facility is designed to help Mali deal with urgent balance of payments need and catalyze financial support from Mali’s international partners, which is critical to Mali’s economic recovery", said Min Zhu, IMF Deputy Managing Director and Acting Chair.
The economic situation in Mali is going through a difficult period as a result of the 2011 drought, insurgent attacks in the north and political instability after the coup in March 2012.
"Economic activity contracted by 1.5 percent in 2012, inflation was pushed up by escalating food prices, and a balance of payments deficit has emerged," Min said adding that fiscal stress intensified as a result of weakening tax revenues, the suspension of donor budget support, and upward pressure on social and military spending.
The government responded with fiscal austerity, he said adding that the tight liquidity situation has led to the accumulation of arrears to external creditors in the amount of 0.5 percent of GDP.
"The authorities’ 2013 program appropriately reflects near-term priorities. It aims to maintain macroeconomic and financial stability by keeping spending in line with available revenues and avoiding the emergence of new arrears," said Min.