IMF and China to resume Financial Support

The International Monetary Fund (IMF) has restarted talks on reviewing an aid programme for Mali and resuming aid payments to the West African country halted by the IMF and the World Bank earlier this year. The two organisations have frozen nearly $70m in financing after the IMF expressed concern in May over Mali’s purchase of a $40m presidential jet and a separate loan for military supplies, which undermined the confidence of donors in the country’s new government. A senior official in Mali’s finance ministry said an IMF mission had begun talks in Bamako on Thursday morning and an agreement was expected within two weeks. The official, who asked not to be named, said the government had reached some understandings with IMF officials.

“We have made adjustments, to remove or freeze expenditure on some other items to ensure that the purchase of the aircraft would not lead to additional debt,” the official said, adding that its level of indebtedness would stay the same. The IMF office in Bamako would not comment. Mali secured over US$ 4bn in donor pledges last year to rebuild after twin crises in 2012. In the first, Malian soldiers ousted the president; in the second, a mix of separatist and al Qaeda-linked rebels seized the country’s desert north. French troops scattered the Islamist fighters and a UN peacekeeping mission has since deployed. But slow progress has left Mali’s President Ibrahim Boubacar Keita struggling to retain the popular support that swept him to power last year. The row over the jet and the defence deals led to criticism that the era of murky deals that shrouded the administration of ousted president Amadou Toumani Toure had not come to an end.

In the wake of the newly reviewed aid programme through the IMF, China has extended 26bn CFA francs (US$ 51m) in funding to Mali. President Ibrahim Boubacar Keita reached the agreement, which includes a gift of 18bn francs and a 6bn franc interest-free loan, during a visit to China for the World Economic Forum in Tianjin, a presidency statement said. Mali also signed several partnership agreements with China, including for the construction of a fourth bridge across the Niger river in the capital Bamako and a railway line between Bamako and Conakry, the capital of neighbouring Guinea, the statement said.

A senior finance ministry official said an agreement was expected within two weeks, after the government agreed to cut expenditure to ensure the aircraft purchase would not increase debt as stated above. An IMF spokesman in Washington said on Thursday authorities had agreed to a review of the transactions by an independent auditor and a tightening of the procurement code.

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