Mali: Request for a Three-Year Arrangement under The Extended Credit Facility-Staff Report; Informational Annex; Staff Statement; Press Release on the Executive Board Consideration; and Statement by the Executive Director for Mali

Context: Mali is emerging from the worst security and political crisis in its recent history.Progress in political normalization to date has been encouraging: a successfulpresidential election, formation of the new government and the legislative elections havedemonstrated Mali's commitment to its democratic tradition. The economy is on themend as donor assistance and business confidence are gradually returning. Butformidable challenges remain. On the political front, the government needs toconsolidate peace and promote national reconciliation after the traumatic events of2012. At the same time, it is striving to support a nascent economic recovery, maintainmacroeconomic and financial stability, and restart the economic reform agenda.Request for an arrangement under the Extended Credit Facility: The authoritiesrequest Fund assistance under an ECF arrangement in an amount equivalent toSDR 30 million (about 32 percent of quota) in support of their medium-term program toreduce balance-of-payments vulnerabilities and lay foundations for stronger, moreinclusive growth. Their reform efforts are focused on tax policy and revenueadministration, public financial management and improving the business environment.Main policy recommendations:Implement an effective fiscal framework in 2014. Ensure effective deployment ofdonor aid toward priority spending. To help the economy's recovery, clear existingdomestic arrears and keep the recourse to domestic borrowing to a minimum. Keepforeign borrowing in line with debt sustainability.Step up public financial management reforms. Increase tax revenues by0.5 percent of GDP a year by enforcing tax compliance, broadening the tax base andstreamlining tax administration; strengthen treasury management and internal control toavoid emergence of new arrears.Accelerate reforms to improve business environment. Tackle weak governance;shore up financial sector stability and promote its development; and reform electricityand petroleum product pricing to protect the government budget and restore theelectricity company's financial integrity.