Mali Poverty Reduction and Strategy Paper-2010 Progress Report

IMF.The incidence of poverty (measured as the proportion of the population defined as poor) in Mali fell from 55.6 percent in 2001 to 47.4 percent in 2006 and to 43.6 percent in 2010 on the basis of a poverty threshold in real terms of CFA 165,431 in 2010. Thus, there was a 12 percentage point reduction in national poverty between 2001and 2010, and a 3.8 percentage point reduction between 2006 and 2010. 

Over the past decade, poverty has fallen in rural  areas (from 65 percent to 51 percent or 14 percentage points), in Bamako (from 18 percent to 10 percent or 8 percentage points), and in other urban areas (from 35 percent to 31 percent or 4 percentage points). However, it increased in Bamako and in other urban areas between 2006 and 2010.  

Structurally, poverty affects rural areas in particular: 91 percent of poor people live in rural areas. From 2001 to 2010, inequalities declined: the poorest 10 percent of the population increased their consumption by more than 40 percent while the consumption of the richest households remained stable. If inequalities had not decreased by 5.9 percent ("redistributive growth" effect), poverty would have fallen by only 6.0 percent ("growth" effect) instead of the 12 percent observed.

IMF.Published:December 28, 2011.Country Report No. 11/372

Mal Poverty Reduction and Strategy Paper-2010 Progress Report

For information about Projects in Mali see Western Africa Projects
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Poverty Reduction and Growth Trust.Review of Interest Rate Structure

This is the first review of the interest rate mechanism approved under the 2009 reforms of the Fund’s concessional lending facilities. The mechanism links the Poverty Reduction and Growth Trust (PRGT) interest rate structure to world interest rates and provides a setting to differentiate interest rates across the various PRGT facilities. The framework requires reviews every two years, with the first such review to be completed by December 31, 2011.

This is the first review of the interest rate mechanism approved under the 2009 reforms of the Fund’s concessional lending facilities. The mechanism links the Poverty Reduction and Growth Trust (PRGT) interest rate structure to world interest rates and provides a setting to differentiate interest rates across the various PRGT facilities. The framework requires reviews every two years, with the first such review to be completed by December 31, 2011.

In 2009, the Board also endorsed temporary relief of interest payments on all outstanding concessional loans for PRGT-eligible members. All interest payments on PRGT loans were waived through end-December 2011. At the same time, the rate of charge on loans to PRGT-eligible members under Emergency Natural Disaster Assistance (ENDA) and Emergency Post-Conflict Assistance (EPCA) was subsidized to zero through end-January 2012. This two-year waiver, which became effective in January 2010 alongside the broader Low Income Country (LIC) facilities reform, was aimed at providing exceptional relief during the global economic crisis. As of November 11, 2011, the interest waiver had benefited 18 PRGT-eligible members and one member that graduated from PRGT eligibility in 2010. Combining the interest payments waived to November 11, 2011, and the projected payments for the remaining period of the interest waiver, the total cost to the Fund amounts to SDR 5.8 million.

Staff recommends that as a transitional measure the exceptional interest waiver be extended by one year to end-December 2012 in view of the current severe downside risks to the global economic outlook. It is proposed that the exceptional relief would expire at the end of 2012, and the differentiated PRGT interest rate mechanism thereafter be allowed to operate as envisaged. On this basis, the applicable interest rates in 2013 would be zero on all Extended Credit Facility (ECF) and Rapid Credit Facility (RCF) loans, and 0.25 percent for Standby Credit Facility (SCF) loans. Additionally, outstanding loans under the Exogenous Shocks Facility (ESF) and subsidized ENDA/EPCA credits would carry an interest rate of 0.25 percent after the interest waiver expires. In accordance with the PRGT Instrument, the next review of PRGT interest rates would take place by December 31, 2013.

International Monetary Fund.Prepared by the Finance and the Strategy, Policy, and Review Departments (In consultation with the Legal Department) Approved by Andrew Tweedie and Siddharth Tiwari November 23, 2011

Poverty Reduction and Growth Trust - Review of Interest Rate Structurec