Coronavirus: IMF approves a US$200 million disbursement to Mali to address pandemic

01 Mai 2020

Bamako, Mali, May 1 (Infosplusgabon) – The International Monetary Fund (IMF) has approved a disbursement of US$200 million under the Rapid Credit Facility to help Mali meet urgent balance-of-payments and fiscal needs stemming from the COVID-19 pandemic.

According to the Fund, this assistance will help support urgent spending on health services and assistance to affected firms and households, while preserving overall social spending.

In a press statement issued on Friday, the IMF said that the COVID-19 (coronavirus) shock hit the economy hard amid an already challenging social and security situation. The economic outlook has deteriorated significantly, and growth is expected to slow to below 1 percent, increasing already high unemployment and poverty.

Though Malian authorities responded quickly with measures to contain the spread of the virus and to mitigate its social and economic impact, the IMF noted that these emergency measures, along with the economic slowdown, will increase the fiscal deficit and the country’s financing needs.

“If unaddressed, these financing needs will impinge on much needed developmental and social spending,” the statement added.

Following the Executive Board’s discussion on Mali, IMF Deputy Managing Director Mitsuhiro Furusawa remarked that the COVID-19 pandemic is having a large adverse impact on Mali’s economic growth and public health, adding to the existing security challenges.

The decline in economic activity, spillovers from global trade and financing shocks, along with fiscal measures to combat the crisis have created an urgent balance-of-payments and fiscal financing needs, he pointed out.

“The crisis and the policy response will lead to a temporary widening of the fiscal deficit. The authorities are taking measures to limit fiscal pressures through reprioritisation of spending plans, but large additional financing will be needed to preserve macroeconomic stability and development gains,” Mr. Furusawa said.

“The emergency financing under the IMF’s Rapid Credit Facility, following the recent approval of debt service relief under the Fund’s CCRT, will support the authorities’ response to the crisis, but additional support from the international donor community will be needed to mitigate its social and economic effects. The authorities’ commitment to high standards of transparency and governance in the management of donors’ financial assistance is welcome.

“Once the crisis abates, a gradual return to the reform path under the ECF-supported programme would be critical to preserving debt sustainability and achieving strong and inclusive growth.”

FIN/ INFOSPLUSGABON/MPO/GABON2020

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