Business
IMF Approves New Extended Credit Facility Arrangement for Mali and US$9.2 Million Disbursement
BAMAKO – The Executive Board of the International Monetary Fund (IMF) today approved a new arrangement under the Extended Credit Facility (ECF) for Mali for an amount equivalent to SDR 30 million (about US$ 46.2 million or 32 percent of quota). The approval enables the immediate disbursement of an amount equivalent to SDR 6 million (about US$9.2 million).
The authorities’ program is designed to reduce balance-of-payments vulnerabilities and lay foundations for stronger, more inclusive growth. Reform efforts are focused on tax policy and revenue administration, public financial management and improving the business environment.
The new Fund-supported program builds on the success of the authorities’ policies supported by disbursements under the Rapid Credit Facility in 2013
Following the Executive Board’s discussion, Mr. Min Zhu, Deputy Managing Director and Acting Chair issued the following statement:
“Mali’s authorities have succeeded in maintaining macroeconomic stability in very difficult circumstances. The economy is recovering and the outlook is improving with the resumption of donor support and a gradual return of investor confidence. However, significant challenges remain. Against this background, a new Fund-supported arrangement under the Extended Credit Facility will help support the authorities’ economic program to sustain growth, maintain fiscal sustainability, and reduce poverty.
“Higher domestic revenue mobilization and increased efficiency of public spending will create fiscal space for needed development spending. Limited government recourse to domestic bank borrowing will safeguard credit to the private sector. Improved public financial management will ensure that donor funding is put to effective use, and improved internal expenditure controls will help prevent the accumulation of domestic arrears. More broadly, a prudent debt management centered on concessional borrowing will be needed in the period ahead.
“Far-reaching reforms will help improve the business environment, promote economic diversification, and boost Mali’s growth prospects. Priority areas include increasing financial development, combating corruption, streamlining tax procedures, improving infrastructure, and increasing labor productivity through improved education and health spending. Well communicated reforms in the production and pricing of energy are also important for fostering durable growth and reducing poverty.”
Annex
Recent economic developments
Mali is emerging from the most serious security and political crisis in its recent history.
The recent arrival of a UN security force (MINUSMA) is helping the government restore law and order in the north. Political normalization is well under way with the successful presidential and parliamentary elections. International financial support has been successfully mobilized: in May 2013, at the international donor conference in Brussels, donors pledged €3.25 billion ($4.4 billion) in financial assistance.
In the meantime, the economy is recovering and inflationary pressures have abated. After a 0.4 percent GDP decline in 2012, the improvement in the security situation and the resumption of donor assistance has helped revive business confidence. Activity is picking up in the service sectors hardest hit by the crisis (commerce, hotels, and restaurants). Favorable rainfall has boosted agricultural production. Average inflation declined from 5.3 percent in 2012 to negative 0.1 percent by October 2013 as food prices declined following the good harvest.
Prospects for the remainder of 2013 and for 2014 are generally favorable. The nascent recovery should gather strength as donor support builds up and credit to economy picks up. Real GDP is projected to increase by 5.1 percent in 2013 and 6.6 percent in 2014 supported by the rebound in agricultural output, the establishment of a third mobile phone operator, recovery in the service sector, and restart of construction projects. After 2014, growth is projected to settle in the 5–6 percent range. Average inflation is projected to remain close to zero in 2013 and reach 2 percent in 2014, below the 3 percent West African Economic and Monetary Union’s (WAEMU) ceiling.
The positive outlook is subject to several risks. Agricultural output is vulnerable to adverse weather conditions. Because of strong export concentration on gold (70 percent of the total) and cotton (15 percent of the total), export revenues depend to a large extent on volatile international gold and cotton prices. The security situation remains fragile despite recent improvements. Any setbacks in peace consolidation could weaken consumer, investor, and donor confidence and derail the incipient recovery. On the other hand, Mali is not significantly exposed to negative risks in the euro area because its exports are inelastic toward traditional trade partners’ growth. The banking sector is mostly financed by local deposits and is not directly exposed to the ongoing deleveraging of European banks.
Program Summary
The authorities’ programs aims at promoting policies that: (i) maintain macroeconomic stability, while allocating sufficient resources to poverty-reducing and other priority spending, including in the North; (ii) mobilize more government revenue;
(iii) strengthen public financial management; and (iv) improve the business environment, including by implementing anti-corruption measures.
Public spending will support national reconciliation, growth and poverty reduction. Budgetary allocations will be in line with the Growth and Poverty Reduction Strategy (G-PRSP) and the Plan for Sustainable Recovery (PRED). To that end, the authorities are committed to giving priority social spending—health, education and social development.
To increase tax revenue and lighten the administrative burden on the taxpayer, the Government will implement ambitious tax policy and administration reforms. Transparency will be used to build political support for a reduction of tax exemptions. In that context, the authorities intend to reform fuel pricing. Starting in 2013, the budget law has begun presenting estimates of the cost to the budget of the failure to adjust fuel prices to international oil price movements. To stem, and ultimately reverse, the erosion of tax revenue from petroleum products, the authorities will abandon the practice of setting the administrative value (used for tax calculation) below the market value. In order to improve the business climate, the government will take steps to address the most problematic factors for doing business. Investors consider access to financing, corruption, poor infrastructure (including electricity), tax regulation are key ingredients. The state electricity company will be reformed with the view of putting it on a sound financial footing.
The authorities have also stated their deep commitment to combating corruption. They will put in place concrete actions, one of which is a systematic follow up of all recommendations of varying control agencies, with regular reports on judicial or administrative actions taken. Another is the publication of judicial decisions.
Given the early stage of Mali’s recovery from the recent political and security crisis, reforms will be implemented progressively. The initial phase—through mid–2014—focuses on strengthening institutional capacity and developing strategies to address the most pressing issues. The following phases of the program will involve rolling out policy actions in these areas. These actions will be specified at the time of the first and subsequent reviews of the arrangement.
The need for stronger regional collaboration, government-private sector synergy, and innovative market solutions to unlock Africa’s economic potential has been brought to the fore.
Group CEO of the Nigerian Exchange Group Plc (NGX Group), Temi Popoola, shed light on the transformative potential of Africa’s capital markets at the launch of the Ethiopian Securities Exchange (ESX).
The NGX Group’s strategic investment in ESX underscores its leadership in advancing Africa’s capital market infrastructure. “The launch of ESX represents a pivotal moment for Ethiopia and the broader African financial landscape,” Popoola stated. “ESX will serve as a crucial mechanism for capital formation and market liquidity, driving sustainable economic growth.”
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Expounding on NGX Group’s investment rationale, Popoola highlighted Ethiopia’s immense market potential and the shared vision of fostering economic growth through innovation. “Our partnership transcends traditional investment parameters,” he explained. “It is about ensuring that ESX evolves into a key player in Africa’s financial ecosystem, enabling cross-border investments and setting benchmarks for market development.”
Popoola also drew parallels with global success stories like India, which has leveraged its capital markets to achieve significant economic transformation. He emphasized the importance of responsible market opening to attract local and continental capital. “By following this path, Ethiopia can become a financial hub in Africa,” he remarked.
Prime Minister Abiy Ahmed lauded the launch of ESX as a transformative milestone in the country’s journey toward economic modernization. “Today, we have officially rung the bell to launch the Ethiopian Securities Exchange, our nation’s first stock exchange,” the Prime Minister announced on X. “This is a call to global investors: Ethiopia offers immense potential, a fast-growing economy, and a clear trajectory toward shared prosperity.”
CEO of the Ethiopian Securities Exchange, Tilahun Esmael Kassahun, expressed confidence in the partnership with NGX Group. “We are pleased to welcome NGX Group as a strategic partner, building upon the existing support we continue to receive from them,” he said. Kassahun also emphasized the value of NGX Group’s expertise in shaping ESX’s growth and success.
Drawing from NGX Group’s six decades of experience, Popoola shared insights on diversifying financial instruments and expanding access to investment opportunities. “With the right mix of innovation, policy support, and regional collaboration, Ethiopia’s capital market can play a transformative role in driving economic development and establish itself as a leader in Africa’s financial ecosystem,” he concluded.
With the ESX poised to redefine Ethiopia’s financial landscape, NGX Group’s involvement highlights the critical role of partnerships and shared expertise in advancing Africa’s economic narrative.
The Office of the Auditor-General of the Federation has uncovered financial irregularities amounting to ₦514 billion in the 2021 operations of the Nigerian National Petroleum Company Limited (NNPC Ltd).
The revelations were contained in a comprehensive audit report highlighting non-compliance and internal control weaknesses within Ministries, Departments, and Agencies (MDAs) during the 2021 financial year.
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Breakdown of Infractions
The audit detailed four major financial discrepancies within NNPCL:
“Irregular Deductions: A total of ₦343.64 billion was deducted from domestic crude oil sales at source without proper documentation.
“Sinking Fund Deposits: ₦83.66 billion, categorized as miscellaneous income, was retained in a sinking fund account.
“Unauthorised Refinery Deductions: ₦82.95 billion was deducted from federation revenue purportedly for refinery rehabilitation.
“Unsubstantiated Payments: ₦3.75 billion was flagged for transactions related to petrol sales that lacked proper verification.
The Auditor-General’s report stated that these financial activities violated the 1999 Constitution and the Financial Regulations Act of 2009, underscoring significant lapses in compliance with statutory guidelines.
According to the report, NNPCL generated ₦484.73 billion from domestic crude oil sales in March and May 2021.
However, ₦343.64 billion was deducted for various purposes, including “Value Shortfall,” “Strategic Stock Holding Cost,” and “Pipeline Maintenance.”
The deductions were made unilaterally by NNPCL without adequate documentation or justification.
Additionally, the report flagged ₦50 billion of the net payable amount for May 2021 as unaccounted for, creating a significant gap in the federation’s revenue.
“Audit observed from the review of NNPC SAP payment record for March and May 2021 payments that the sum of ₦484.73bn was the gross amount generated for the sale of domestic crude for the months of March and May 2021.
“The sum of ₦343.64bn from the gross amount was unilaterally deducted from the gross domestic crude sales as NNPC Value shortfall, Strategic Stock Holding Cost, Crude Oil and Products Pipeline Losses, as well as the pipelines maintenance and management costs.
“The details of each of the cost components deducted were not provided for audit review. Hence, the reasons for the deductions could not be justified by the management.”
On the unremitted ₦50 billion from May 2021, the report noted: “In the month of May, the net payable that could have been remitted ought to have been ₦127.075bn, but only the sum of ₦77.075bn was remitted, leaving an unremitted balance of N50bn to the Federation Account, which has remained unaccounted for.”
The report attributed these anomalies to weaknesses in NNPCL’s internal control systems, warning of the risks they pose to public funds.
It read, “The above anomalies could be attributed to weaknesses in the internal control system at NNPC, now NNPC Ltd. This is a potential loss of Federation revenue, diversion of public funds, or misapplication or misappropriation of funds.”
The success of the maiden edition of the Lagos Shopping Festival (LSF), Africa’s first 72-hour non-stop commerce and entertainment event has been credited to the Governor of Lagos State, Babajide Sanwo-Olu.
This is the view of Managing Director/Chief Strategist of Chain Reactions Africa Ltd, Israel Jaiye Opayemi, one of the main organisers of the event.
According to Opayemi, though Chain Reactions Africa conceptualised the event, the festival could be rightly described as the Governor’s baby and owes its success to his leadership. “Firstly, the Lagos Shopping Festival could not have come to fruition if the Governor did not buy into our audacious plan when we first presented the idea to him during the Covid-19 pandemic in 2020. Secondly, it was the Governor’s exemplary leadership of the project as its Chief Marketing Officer which attracted the buy-in of key sponsors like Zenith Bank, Tolaram Group, First Bank Plc, and Guinness Nigeria Plc,” Opayemi revealed.
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While the duo of Zenith Bank and First Bank provided their bank on wheel platforms for buyers at the Lagos Shopping Festival, they also supported the Vendors with special Point of Sale Machines with which to process payments from buyers. The banks were also seen marketing their diverse banking products to guests within the shopping arena.
For Tolaram, it was a time to support the citizens and give back to society. Guests at the Lagos Shopping Festival were freely given some of the products of the group such as PowerOil, Indomie and Kellogg’s packaged into goodie bags and given out to prospective buyers at the shopping arena. The Children’s Arena was however activated by Indomie with the children entertained by Santa Claus within a well-equipped arena manned by the Indomie Brands team and the Lagos State Safety Marshalls. The children were daily treated to free Indomie meals daily and given various gifts to go home with.
On its part, Guinness Nigeria came through as the real life of the Nigerian party by organizing product sampling activation for the teeming guests at the festival using brands such as Singleton, Johnnie Walker, Ciroc, Don Royale and Captain Morgan to deliver pleasant experiences to guests aside from Guinness and Malta Guinness.
While unveiling the identity of the festival last month, Governor Babajide Sanwo-Olu had thanked the management of Zenith Bank Plc, Tolaram Africa Group, Guinness Nigeria Plc and First Bank of Nigeria for supporting the idea of a Lagos Shopping Festival, describing it as a value addition on the state’s tourism calendar and the overall efforts to grow the State’s GDP. The Governor further said, “I must specially acknowledge your pioneering sponsorship role. It is easy for a corporate sponsor to jump on the sponsorship band wagon of an already established festival and fund it. But you are supporting the maiden edition of this Lagos Shopping Festival with us. The competition is watching you now. Do not build this brand with us and yield the space for the competition to take over. I do hope you would all commit long term to this brilliant initiative.”
On his part, Girish Sharma, CEO Guinness Nigeria Plc, expressed enthusiasm for the initiative. “Lagos is the commercial heartbeat of Nigeria and Africa’s entertainment capital, and the Lagos Shopping Festival captures its essence. We see opportunities in this initiative because it is a creative fusion of commerce and entertainment. This partnership reflects our dedication to fostering economic opportunities and support the nation’s vibrant entertainment industry.”
A first-of-its-kind, the festival was a convergence of commerce and entertainment, bringing together buyers and sellers in the MSME ecosystem, and hordes of fun-seekers who were entertained with thrilling performances by A-list entertainers, including Adekunle Gold, Wande Coal, Teni, Young Jonn, BNXN, Ayo Maff, SB Live and EmmaOMG. The list also included some of Nigeria’s most sought after DJs such as DJ Neptune, DJ YK Mule, DJ Baddo while Gbenga Adeyinka the 1st and Larry J dished out rib-cracking comedy performances.
Held from 23rd to 25th Day of December 2024, at the iconic Mobolaji Johnson Arena, Onikan Stadium, Lagos, the Lagos Shopping Festival saw thousands of fans throng the main venue and select Lagos malls during the three-day period to bag the latest bargains from local and top global brands.
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