Memorandum of Economic and Financial Policies for 2002
July 11, 2002
I. Introduction
1. After a period of sustained growth, there was a significant slowdown in economic activity in 2001. This was attributable to unfavorable developments in the cotton and food crops sectors, as well as to political unrest in neighboring countries. Nevertheless, strong growth is now forecast for 2002, reflecting a restoration of confidence among cotton producers in the context of implementation of the program supported by the Poverty Reduction and Growth Facility (PRGF) arrangement and the support of Mali's development partners.
2. Poverty reduction continues to be the priority of the development strategy pursued by the government of Mali. The government's commitment reflects a twofold need: (i) to identify policies and instruments geared toward achieving the objective of poverty reduction; and (ii) to adopt appropriate short- and medium-term measures to enable the government to make rational and more effective use of domestic and external resources. To achieve their poverty reduction goals, the Malian authorities will implement economic, financial, and social policies aimed in particular at promoting economic diversification. Private sector promotion remains central to the poverty reduction strategy, as it is anticipated that two-thirds of growth in Mali will be generated by the secondary and tertiary sectors. The government's objective is to ensure that Mali can in the medium term achieve an annual growth rate averaging at least 5–6 percent, which will help to roll back poverty.
II. Program Implementation During 2001
3. Mali experienced a considerable slowdown in economic activity in 2001. The real GDP growth rate is estimated at 1.5 percent in 2001, after sustained growth of about 5 percent during the period following the devaluation of the CFA franc in 1994. This slowdown is the result of the crisis in the cotton sector, the difficulties in the food crop sector, and the ripple effects of these developments through the rest of the economy. Average annual inflation reached 5.2 percent, reflecting the increase in cereal product prices following the downturn in production, as well as the increase in electricity and water tariffs in July 2001. As regards external trade, nonmining exports dropped by 23.4 percent in 2001, owing to the sharp decline in cotton exports. This drop was more than offset by the increase in the value of gold exports, which doubled in 2001. At the same time, there was a pronounced increase in imports owing to the activities associated with the African Cup of Nations (CAN), which was held in Mali early in 2002. As a consequence, the current account of the balance of payments deteriorated in 2001. The current external deficit was financed by private capital inflows, in particular in the gold sector, and by a sustained level of external assistance.
4. As regards fiscal policy, tax revenue slightly exceeded the programmed objective, reaching CFAF 281.6 billion in 2001. This favorable performance reflects an increase in the tax yield following the implementation of administrative measures. Budgetary expenditure stayed below program targets. The expenditure to combat poverty that was funded by resources related to the Initiative for Heavily Indebted Poor Countries (HIPC Initiative) slightly exceeded the programmed level, owing to higher debt relief than anticipated in 2001. The basic budget balance (excluding expenditure funded by HIPC Initiative related resources) was contained at CFAF 21.7 billion in 2001, against a target of CFAF 31.6 billion. Owing to delays in the mobilization of external budgetary assistance expected in the fourth quarter, the government had recourse, on an exceptional basis, to statutory advances from the Central Bank of West African States (BCEAO) to facilitate its cash-flow management. However, with the arrival of those resources late in 2001, the authorities repaid one-fifth of these advances before end-December 2001. The amount of budgetary assistance received in 2001 came to CFAF 27.5 billion, compared to the programmed level of CFAF 43.8 billion. The difference is explained by the January 2002 disbursement of a World Bank loan.
5. The government also intensified its poverty reduction program set forth in the interim poverty reduction strategy paper (I-PRSP). Funding for priority programs was increased in 2001 through higher budgetary resources, debt-service relief obtained following the completion point under the original HIPC Initiative, and the interim financing obtained through the enhanced HIPC Initiative. A special treasury account was opened with the BCEAO to house HIPC resources.
6. Monetary developments in 2001 reflected an increase in the net foreign assets of the commercial banks, a significant expansion of domestic credit, and a sizable increase in broad money. Credit to the economy increased by 19 percent during 2001, stimulated in part by the activities associated with the organization of the CAN. The quality of banks' portfolios improved in 2001. The ratio of nonperforming loans to net credit to the economy fell from 12.1 percent at end-2000 to 9.9 percent at end-2001, as the government repaid CFAF 30 billion in state-guaranteed bank loans to the parastatal enterprise in the cotton sector (CMDT). Moreover, most banks complied with the main prudential ratios of the Regional Banking Commission of the West African Economic and monetary Union (WAEMU). Micro-credit institutions continued to grow, mainly as a result of their higher visibility in rural areas and among vulnerable population groups.
7. In spite of the difficulties that Mali faced in 2001, the government continued to implement satisfactorily the program supported by the PRGF arrangement, which is described in the memorandum of economic and financial policies of November 30, 2001 (Tables 1 and 2). All the quantitative performance criteria, benchmarks, and indicators for end-December 2001 were met. With respect to structural reforms, the following steps were taken:
- The government (i) adopted a plan for the annual allocation of HIPC Initiative related resources for the period 2002–05; (ii) prepared an organizational audit of the civil service; and (iii) introduced specific budget codes for HIPC expenditure in the draft budget law for fiscal-year 2002.
- The CMDT has begun implementing a set of measures aimed at enhancing the transparency and effectiveness of its financial management and reducing costs. These measures have enabled the enterprise to reduce its costs by about CFAF 19 billion since 1998.
8. As noted in the revised program for 2001, however, there were delays in the implementation of the reforms in the cotton sector, owing to delays in securing the necessary financing. As a consequence, the two following structural performance criteria for end-December 2001 were not observed: finalization of the financial restructuring plan for the CMDT for the period 2002–05, and the launching of the call for bids for the sale of the assets of the Office de la haute vallée du Niger (OHVN) with a view to establishing a new private sector operator. Delays were also incurred in the implementation of two structural benchmarks: (i) the adoption of the plan for the gradual withdrawal of the CMDT from public service activities (including rural roads, village-level water supply, and hydro-agricultural development) and the social plan for adjusting staffing levels, with appropriate accommodative measures taken in each case (benchmark for end-November 2001); and (ii) the adoption and implementation of a mechanism for setting a producer price for seed cotton that reflects movements in international cotton fiber prices and takes account of prices prevailing within the region (benchmark for end-December 2001).
9. In the context of the program for developing the telecommunications sector, an international call for bids was launched in September 2001 for granting a second license for the operation of a cellular telephone concession to a private operator. The bidding process was carried out in a transparent and open environment, and a temporary license was issued in March 2002 to a private international firm that won the bid.
III. Revised Macroeconomic Framework for 2002
10. Growth prospects have improved in 2002, and real GDP is now projected to rise by 9.3 percent (compared to the 6.7 percent initially forecast). Cotton production is estimated to have increased from 243,000 metric tons in 2000/01 to 571,000 metric tons in 2001/02. The initial projections for gold and cereal grains have been revised upward. Furthermore, the price of gold and the price of oil imports have been raised. However, there are lingering uncertainties about the prospects for the export price of cotton.
11. To achieve its poverty reduction target, the government will continue to gradually reorient its budget in favor of priority expenditures (education, health, and rural development). For 2002, the initial macroeconomic objectives of the program have been retained or made more ambitious: growth in real GDP of 9.3 percent; inflation (as measured by the GDP deflator) of 1.2 percent (compared to 2.3 percent in the initial program); a basic fiscal deficit (excluding resources related to the HIPC Initiative) of 0.4 percent of GDP (slightly better than the objective set in the initial program); and an external current account deficit (excluding grants) of 12 percent of GDP.
12. For the balance of payments, export receipts are expected to exceed initial forecasts, as a pronounced increase in exports from the nonmining sector, will make it possible to offset the decline in gold exports. Moreover, nonmining imports will increase with the rise in incomes, whereas mining sector imports are projected to decline. The resulting current account deficit will be financed by substantial capital inflows, especially in the gold sector, and by sustained foreign aid. To finance the government and public enterprise investment program, the authorities will continue to rely solely on grants and loans on concessional terms, as Mali has benefited from external debt relief under the HIPC Initiative. The government concluded on May 24, 2002 negotiations on debt-rescheduling with the Russian authorities.
IV. Revised Fiscal Targets Under the Program for 2002
13. Fiscal policy in 2002 reflects the government's efforts to contain the basic deficit while reducing poverty and minimizing the social impact of the program aimed at liberalizing the economy. To achieve these objectives, the efficiency of tax administration and public spending will be improved. These efforts will make it possible to limit the government's indebtedness, in particular to the banking sector. The basic fiscal deficit (excluding expenditures related to the HIPC Initiative) is projected at 0.4 percent of GDP, compared with 0.5 percent of GDP expected in the original program. The authorities are also determined to continue improving the control of nonpriority spending, especially transfers and other current expenditure.
14. Current expenditure (excluding HIPC expenditure) is projected to be 0.2 percentage point of GDP higher than the initial program level. Spending was raised to take into account the civil service reform involving the introduction of a harmonized wage scale (CFAF 2.4 billion); the hike in water and electricity tariffs (CFAF 3.6 billion); the increase in refunds of value-added tax (VAT) credits to the mining companies (CFAF 3.5 billion); a rise in election-related expenditure (CFAF 2 billion); and an increase in the capital budget in the context of the decentralization program (CFAF 3.5 billion). Outlays funded by resources related to the HIPC Initiative were increased by CFAF 6.3 billion because Mali has obtained additional debt relief. In addition, a plan for the use of privatization receipts will be prepared, in keeping with the poverty reduction program described in the PRSP.
15. Total government revenue was also increased to reflect the upward revision in GDP growth. Relative to GDP, tax revenue was maintained at 15.5 percent of GDP, as projected in the initial program. Receipts anticipated from taxes on petroleum products have been raised slightly, as the introduction of a new taxation mechanism in July 2001 will have a full impact in 2002, and the rates of the domestic tax on petroleum products were raised in December 2001. Furthermore, in the event of a drop in oil and gas prices on international markets, the government plans to increase the gasoline tax rates in the course of the year to ensure that the revenue target is met. The mining sector will contribute CFAF 29.2 billion to government revenue, against CFAF 22.4 billion in 2001, reflecting an increase in dividend payments associated with the record production registered in 2001. To achieve the revenue target, the government will also continue the tax reforms initiated in the framework of the ongoing project in support of mobilizing domestic resources (PAMORI). In addition, since January 1, 2001, the single taxpayer identification number has been used systematically by all tax administrations—a practice that has improved communications among tax agencies. Furthermore, the National Directorate of Taxes (DNI) has launched a procedure to bring the informal sector into the tax base and has allocated additional resources to units responsible for pursuing delinquent taxpayers.
16. To normalize its relations with the mining sector, the government conducted an exhaustive inventory of the tax credits on VAT claimed by the mining companies. Accordingly, CFAF 16.9 billion was allocated in the 2002 budget for refunds of such credits, comprising CFAF 7.4 billion owed at end-2001 and CFAF 9.5 billion for 2002. In addition, the government will hire an audit firm to prepare an inventory of all its liabilities to the rest of the economy by October 2002. Pending the results of this audit, the government allocated CFAF 3 billion in the budget for settling outstanding liabilities.
17. Given the importance of regional integration to a landlocked economy like Mali's, the government will take all necessary steps to ensure expeditious compliance with the WAEMU convergence criteria. To this end, the government intends to reduce its financing requirement and to implement a rigorous fiscal policy and a cautious borrowing policy. With respect to government revenue, further efforts to broaden the tax base and to enhance domestic tax collection are expected to raise the ratio of tax revenues to GDP over 17 percent. To facilitate efforts to enhance the efficiency of the civil service over the medium term, and to improve control over the wage bill, the recommendations of the action plan for reforming the civil service will be implemented.
18. Reflecting the BCEAO's monetary policy objectives of strengthening the WAEMU's external reserves and maintaining inflation at a rate compatible with that of the anchor currency, broad money expansion is projected at approximately 10.6 percent in 2002, in line with the growth of nominal GDP. Credit to the government is projected to increase slightly, while credit to the economy is expected to rise by about 9.5 percent, compatible with the outlook for economic activity. With the aim of preserving the soundness of the banking system, the government issued treasury bills in July 2001 in the amount of CFAF 12 billion to repay bank credit to finance the cotton crop. These treasury bills will be redeemed in equal amounts in 2002 and 2003. Treasury bills issued in December 2001 (CFAF 2.8 billion) were redeemed during the first quarter of 2002. The authorities are committed to repaying CFAF 3 billion of the BCEAO's advances in cash, and settling the remainder (CFAF 20.2 billion) in the framework of a WAEMU plan to implement the decision of the WAEMU Council of Ministers to eliminate statutory advances from the BCEAO. To ensure perfect substitutability between bank financing and the bills or bonds that the Malian Treasury may issue on the national or regional market, the performance criterion and benchmarks on the change in net bank credit to the government were replaced by ceilings on the government's net domestic financing (bank and nonbank), beginning in 2002 (see Table 1).
19. Efforts to strengthen the banking system will continue, and the monetary authorities will ensure that banks increase their capital and reserves so as to adhere to the new capital adequacy ratio, which took effect on January 1, 2002. Having due regard for the microfinance sector's important role in rural and informal sector development, the government will continue to promote the sound development of microfinance, particularly by strengthening supervision capacity.
V. Structural Reforms
20. The structural reform program for 2002 will focus on two key issues: the reform of the cotton sector and the improvement of public expenditure management.
A. Cotton Sector
21. The objectives of the reform of the cotton sector are: to control and lower production costs; establish a pricing mechanism based on free bargaining among economic agents in the sector; strengthen producers' organizations so that they can play a more important role in the management of the cotton sector; strengthen the role of the private sector, producers, and decentralized agencies in developing the sector; increase the sector's contribution to the national economy; and contribute to poverty reduction by increasing incomes and improving the standard of living of the population. The ultimate goal is to liberalize the cotton sector by opening it up to competition and privatizing the CMDT.
22. Delays have been encountered in implementing the reforms in the cotton sector. Some of these delays are attributable to the complex technical procedures required to initiate the studies planned. However, the government reaffirms its commitment to press on with implementation of this essential reform. The launching of the call for bids for the installation of a private operator in the OHVN zone was delayed because the government was seeking a consensus with the foreign shareholder of the CMDT on the sale of assets. In any event, the government will take all the necessary measures to proceed with the launching of the call for bids by end-September 2002.
23. Prior to the completion of the program review by the IMF Executive Board, the government will take a number of key measures aimed at demonstrating its resolve to continue the liberalization of the cotton sector (see Table 3). In addition, there have been delays in the preparation of a study on the steps and options necessary for the full liberalization of the cotton sector over time (structural benchmark for end-March 2002). It is now projected that this study, which will serve as the basis for drawing up a medium-term timetable for reform, will be completed by end-August 2002. With the support of its development partners, particularly the World Bank, the government will prepare a detailed plan on the next steps in the reform of the cotton sector.
B. Public Expenditure Management
24. The Malian authorities continue to improve public expenditure management with support from their development partners, particularly the World Bank. Draft audited budget acts (lois de règlement) covering 1996 through 1999 have been submitted to the National Assembly. The draft audited budget act for 2000 will be submitted to the National Assembly by June 30, 2002. The goal is to move away gradually from an approach focused on verifying the conformity of government expenditure to regulations to an approach focused on verifying the effectiveness of expenditures and, thus, on the assessment of outcomes. This shift presupposes that information is well managed, comprehensive, and readily available.
25. In the context of the Report on the Observance of Standards and Codes (ROSC) and on the country's capacity to monitor the execution of poverty-reducing expenditure, an IMF staff mission noted, in July 2001, the significant progress achieved in public expenditure management. It made recommendations that have been taken into account in the authorities' work program for 2002, including the following:
- In the area of the budgetary classification for the 2003 budget, the government, with assistance from IMF staff, will set up (i) a coding system for all poverty-reducing expenditure; and (ii) a coding system for program budgets.
- In the draft budget law for 2003, the government will adopt an expanded nomenclature for poverty-reducing expenditure.
- The system of ex post audits will be strengthened by the appointment of six magistrates and the temporary assignment of qualified personnel to the accounts section of the supreme court. In addition, an action plan will be prepared for strengthening the ex post auditing of public expenditure.
- In the government accounting area, the government will continue its efforts to speed up the production of treasury balances.
- The budget and accounting nomenclatures at the local level, and the government chart of accounts at the national level, will be harmonized to facilitate budget monitoring, beginning with the 2003 budget.
26. In addition to the measures taken to enhance the effectiveness of expenditure related to poverty reduction, the government has decided, in the context of the third sectoral adjustment credit (SAC III) agreed with the World Bank, to start preparing medium-term public expenditure programs. In support of this process, and reflecting the need for efficiency in the use of resources related to the HIPC Initiative, the government will design and implement (in the context of the PRSP) an action plan to enhance governance and transparency in public management. In addition, the government will undertake a functional technical study to design an integrated information system within the Ministry of Economy and Finance.
C. Civil Service Reform
27. To control the civil service wage bill more effectively and improve the efficiency of the civil service, the authorities will undertake a diagnostic study of wage policy as part of the process of modernizing the civil service and harmonizing its pay scales. These reforms will be based on the organizational audit of the civil service conducted in November 2001. As part of the implementation of the recently adopted action plan for the civil service reform, new general rules and regulations for civil servants have been drafted and discussed with social partners in the first half of 2002.
VI. Poverty Reduction
28. The former government adopted the poverty reduction strategy paper (PRSP) at end-May 2002. Regional participatory meetings were held throughout the country from December 2001 to March 2002. They gave an opportunity to improve the connections between strategies by gaining a better understanding of poverty, its causes, and its manifestations; identify priority projects and programs in each region; and strengthen the sense of ownership of all participants. Furthermore, supplementary analyses helped to improve the performance monitoring indicators under the strategy and strengthen the basis for the growth projections. Discussions that were held with development partners in March 2002 addressed the process of prioritizing objectives, policies, and programs. The PRSP has incorporated comments relating to the costing methods used, good governance, and the financing of the poverty reduction strategy.
29. Execution of the program presented in the July 2000 interim PRSP is continuing, in particular through the implementation of the ten-year education and health sector development programs (PRODEC and PRODESS); the implementation has been accelerated with the provision of resources related to the HIPC Initiative. The share of social spending in total expenditure is expected to rise from 17.6 percent in 2001 to 19.1 percent in 2002. The share of health in the use of HIPC Initiative-related resources increased from 9.2 percent in 2001 to 18 percent in 2002, and the share of education rose 39 percent to 44 percent.
30. In the wake of the ROSC mission on fiscal issues and discussions with the World Bank, the authorities have decided to step up the monitoring of resources related to the HIPC Initiative. For the 2002 budget, specific codes have been introduced for current and capital expenditure in order to ensure that these resources are properly tracked. The government has also established an interministerial committee for monitoring the execution of HIPC-financed expenditure and has commissioned a study to define performance indicators for poverty reduction programs. The National Directorate of Planning will monitor the execution of the programs, while the authorities (with assistance from development partners) will regularly undertake independent, targeted audits to ensure that resources are used for their intended purposes. In addition, the government will conduct a public awareness and information campaign in local areas regarding the poverty reduction projects planned in the locality, so as to enable the general public to monitor project developments either directly or through elected representatives.
VII. Prior Actions, Performance Criteria, and Benchmarks
31. Prior actions for presentation of the fourth review under the PRGF arrangement are indicated in Table 3. Program execution will be monitored on the basis of the quantitative and structural benchmarks and performance criteria described in Tables 1 and 3 and the attached technical memorandum of understanding.
1. This technical memorandum of understanding defines the performance criteria and benchmarks for the program supported by the Poverty Reduction and Growth Facility PRGF arrangement. It also sets out the frequency and deadlines for data reporting to the staff of the International Monetary Fund (IMF) for program-monitoring purposes.
2. Unless otherwise indicated, the government is defined as the central administration of the Republic of Mali and does not include local administrations, the central bank, or any other public entity with autonomous legal personality that is not included in the table of government financial operations (TOFE).
3. The definitions of "debt" and "concessional borrowing" for the purposes of this memorandum of understanding are as follows:
4. Net bank credit to government is defined as the balance between government debts and government claims vis-à-vis the central bank and commercial banks. The scope of net bank credit to government is that used by the Central Bank of West African States (BCEAO) and is consistent with established Fund practice in this area. It implies a broader definition of government than that specified in paragraph 2. Government claims include the CFA franc cash balance, postal checking accounts, secured liabilities (obligations cautionnées), and all deposits with the BCEAO and commercial banks of public entities, with the exception of industrial or commercial public institutions (EPICs) and public enterprises, which are excluded from the calculation. Government debts to the banking system include all debts to these same financial institutions. Deposits of the cotton stabilization fund and government securities held outside the Malian banking system are not included in the calculation of net bank credit to government.
5. Net bank credit to the government, as defined above, stood at CFAF 18.8 billion at end-July 2001 and CFAF 18.7 billion at end-December 2001.
6. The change in net bank credit to government on the date indicated is defined as the difference between the stock on the date indicated and the stock at the end of the previous year. This change was CFAF 24.3 billion as of July 31, 2001, and CFAF 18.7 billion as of December 31, 2001.
7. Starting in 2002, the key quantitative performance criterion will be net domestic financing of the government, defined as the sum of (i) net bank credit to government, as defined above (ii) other government claims and debts vis-à-vis national banking institutions, and (iii) nonbank financing of the government, including, in particular, government bills and bonds held outside national banking institutions and proceeds from the sale of government assets. These receipts are defined as the proceeds from the sale, effectively received by the government during the fiscal year, of all or part of the shares held by the government in privatized enterprises. In the event that payments in respect of these sale transactions are expected to extend beyond the fiscal year, the residual will be included in the calculation of nonbank financing of the government in each of the subsequent years, in accordance with the annual scheduling of the expected payments.
8. Figures on net bank credit to government as calculated by the BCEAO, and on nonbank financing as calculated by the public treasury, are final in the context of the program.
9. The ceiling on the change in net bank credit to government and net domestic financing of the government will be adjusted if external budgetary assistance exceeds or falls short of the programmed amount. Budgetary assistance is defined as grants, loans, and debt relief (excluding project loans and grants, IMF resources, and debt relief under the HIPC Initiative). The ceiling will be lowered by the amount by which budgetary assistance exceeds the programmed amount. Conversely, the ceiling will be raised by the amount by which budgetary assistance falls short of the programmed amount. For 2002, these ceilings are set at CFAF 4 billion at end-March; CFAF 6 billion at end-June; CFAF 15 billion at end-September; and CFAF 25 billion at end-December. In the context of the program, cumulative external budgetary assistance (excluding the World Bank disbursements in January 2002) is expected to reach CFAF 9.8 billion on June 30, 2002; CFAF 16.7 billion on September 30, 2002; and CFAF 43.3 billion on December 31, 2002.
10. The ceiling on the change in net bank credit to government and net domestic financing will be adjusted by the difference between the amount of HIPC Initiative resources programmed and the amount actually spent. If the amount actually spent exceeds (or falls short of) the programmed amount, the ceiling will be reduced (increased) by the difference between the actual amount and the programmed amount.
11. The ceiling on the cumulative change in net domestic financing is established as follows for 2002: CFAF 16.5 billion at March 31; CFAF 16.5 billion at June 30; CFAF 31.8 billion at September 30; and CFAF –1.6 billion at December 31. The ceilings are performance criteria at end-June 2002 and end-December 2002, and benchmarks at end-March 2002 and end-September 2002.
12. Provisional data on net bank credit to government position, including a detailed list of the bank account balances of other public entities, will be transmitted on a monthly basis within the four weeks following the end of the month. Final data will be provided within an additional four weeks after the provisional data have been reported.
13. External payments arrears are defined as the sum of external payments due and unpaid for external liabilities of the government and foreign debt held or guaranteed by the government. The definition of external debt provided in paragraph 3(a) applies here.
14. Under the program, the government will not accumulate external payments arrears, with the exception of arrears arising from debt under renegotiation or being rescheduled. The performance criterion on the nonaccumulation of external payments arrears will be applied on a continuous basis throughout the program period.
15. Domestic payments arrears are government expenditures for which payment authorizations have been issued (dépenses ordonnancées) but not paid within 90 days of the date of the payment authorization. Domestic arrears also include expenditure commitments to public enterprises for which payment authorizations have been issued but for which payment has not been made within the same 90-day period.
16. Under the program, the government will not accumulate domestic payments arrears. This performance criterion will be applied on a continuous basis.
17. The government will report to the IMF staff any accumulation of domestic arrears as soon as the 90-day deadline has been reached. Moreover, the government will minimize payment delays and will provide, at the request of IMF staff, data on expenditure commitments, payment orders, and payments.
18. This performance criterion applies not only to debt as defined in point 9 of the Guidelines on Performance Criteria with Respect to Foreign Borrowing (Executive Board Decision No. 6230-(79/140), amended by Executive Board Decision No. 12274-(00/85) (8/24/00)), but also to commitments contracted or guaranteed for which no value has yet been received.
19. The concept of government for the purposes of this performance criterion includes government as defined in paragraph 2, administrative public institutions (EPAs), scientific and/or technical public institutions, professional public institutions, industrial and/or commercial public institutions (EPICs), and local governments.
20. Until end-2001, in addition to the government, the public enterprises authorized to contract, guarantee, or accommodate nonconcessional borrowing in the context of the program are the cotton company (CMDT), the telecommunications company (SOTELMA), and the railroad company (RCFM). No other public enterprise shall contract, guarantee, or accommodate nonconcessional borrowing.
21. A ceiling is set for nonconcessional borrowing. It relates only to projected borrowing from the West African Development Bank (BOAD), Crédit Commercial de France (CCF), the French Development Agency (AFD), and the Fund of the Economic Community of West African States (ECOWAS). The government and the above-mentioned public enterprises will not contract nonconcessional debt with other creditors. Starting in January 2002, a ceiling of zero is set for nonconcessional borrowing. This performance criterion is monitored on a continuous basis.
22. The government undertakes not to contract or guarantee external debt with a maturity of one year or more and a grant element of less than 35 percent (calculated using the reference interest rates corresponding to the borrowing currencies provided by the IMF). This performance criterion applies not only to debt as defined in point 9 of the Guidelines on Performance Criteria with Respect to Foreign Borrowing, adopted by the Executive Board on August 24, 2000, but also to commitments contracted or guaranteed for which no value has yet been received. However, it does not apply to financing granted by the IMF and treasury bills and bonds issued in CFA francs on the West African Economic and Monetary Union (WAEMU) regional market.
23. Information on any borrowing (terms and creditors) contracted or guaranteed by the government and/or the above-mentioned public enterprises shall be transmitted each month within four weeks following the end of the month.
24. The definitions in paragraphs 16 and 17 also apply to this performance criterion.
25. Short-term external debt is debt with a contractual term of less than one year. Import-related loans and debt-relief operations are excluded from this performance criterion.
26. In the context of the program, the government and public enterprises will not contract, guarantee, or accommodate short-term nonconcessional external debt.
27. As of March 31, 2002, the government of Mali and the public enterprises have no short-term external debt. This performance criterion is monitored on a continuous basis.
28. The program also includes indicators on government tax revenues, the civil service wage bill, and the basic fiscal balance.
29. Government tax revenues are defined as those that figure in the TOFE.
30. Quantitative performance indicators for tax revenues in 2002 are set at CFAF 67.5 billion at March 31; CFAF 148.0 billion at June 30; CFAF 231.7 billion at September 30; and CFAF 331 billion at December 31.
31. The government shall report tax revenues to IMF staff each month in the context of the TOFE.
32. The wage bill includes all public expenditure on wages, bonuses, and other benefits or allowances granted civil servants employed by the government, the military, and other security forces, and includes expenditure with respect to special contracts and other permanent or temporary employment with the government. The wage bill excludes, however, wages paid under externally funded projects and transfers to local communities for the payment of teachers' salaries.
33. The quantitative performance indicators for the wage bill are set at CFAF 21.8 billion at March 31, 2002; CFAF 43.6 billion at June 30, 2002; CFAF 67.1 billion at September 30, 2002; and CFAF 89.5 billion at December 31, 2002.
34. The government shall report the wage bill to IMF staff each month in the context of the TOFE.
35. The basic fiscal balance is defined as the difference between total revenues, excluding grants and privatization receipts, and total expenditure plus net lending, excluding capital expenditure financed by foreign donors and lenders and HIPC Initiative-related expenditures.
36. The floors for the performance indicators for the basic fiscal balance, excluding HIPC Initiative-related expenditure, are set at CFAF 14.5 billion at March 31, 2002; and at CFAF 43.3 billion at June 30, 2002. For September and December 2002, the floors are CFAF –15.1 billion and CFAF –9.2 billion, respectively.
37. The authorities will report provisional data on the basic fiscal balance monthly to IMF staff, in the context of the TOFE. These data will be taken from the balances of treasury accounts for the items that are used to calculate this balance. The final data will be provided as soon as the final balances for these accounts are available, but not later than four weeks after the reporting of the provisional data.
39. Data on the introduction of the structural benchmarks and performance criteria will be sent to Fund staff within two weeks of the date of their scheduled implementation.
40. The government will provide IMF staff with the following:
41. The government will submit the following each month, within four weeks following the end of the month, unless otherwise indicated:
42. The government will provide IMF staff with the following:
43. The government will provide IMF staff with the following:
