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AID AND THE BUDGETARY GAP : THE CASE OF MALI

AID AND THE BUDGETARY GAP : THE CASE OF MALI. Abdoulaye TOURE Director General du Budget. Context. Vast country with a surface area of 1.2 million km² Population : 10 million inhabitants Continental country with 7 borders Economy characterized by a predominance of the primary sector

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AID AND THE BUDGETARY GAP : THE CASE OF MALI

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  1. AID AND THE BUDGETARY GAP : THE CASE OF MALI Abdoulaye TOURE Director General du Budget

  2. Context • Vast country with a surface area of 1.2 million km² • Population : 10 million inhabitants • Continental country with 7 borders • Economy characterized by a predominance of the primary sector • Affected by the issue of completion of the PPTE initiative in 2003 • Access to the initiative for cancellation of multilateral debt

  3. External Pressure • The pressure of the multilateral monitoring of Budgetary Policies of the West African Economic and Monetary Union (UEMOA) and the management of monetary policy. • Pressure of the economic and reform programmes with Bretton Woods institutions.

  4. CSLP I CSLP 1 (2002 – 2006) had the following strategic themes: 1. To ensure institutional development and the improvement of governance and involvement 2. To develop human resources and access to basic social services. 3. To develop basic infrastructures and productive sectors

  5. CSCRP The Strategic Framework for Growth and the Reduction of Poverty (CSCRP 2007 – 2011) has three strategic directions 1. The development of the productive sector 2. The pursuit and consolidation of reforms of the public sector 3. Growth of the social sector

  6. UEMOA Convergence Criteria • Recettes (hors dons) moins total des dépenses (y c. prêts nets) (hors dépenses en capital à financem. ext. et hors PPTE) / PIBm • 2/ ici seulement invest. BSI

  7. The main sources of Tax revenue • VAT • Customs duties Characteristics Poor flexibility of tax revenue in comparison with GDP Membership of the UEMOA limits rate-linked reforms Relative importance of the informal sector

  8. The Structure of the Budget and the Main Ratios of the CBMT

  9. CBMT and the Convergence Criteria

  10. CBMT by type of expenditure 1/2 En milliards de FCFA

  11. Expenditure • Represents on average 27% of the GDP • Internal financing about 59% • External financing 40%

  12. CBMT by type of expenditure 2/2% of GDP

  13. Division according to type of expenses (% GDP)

  14. Prospects • Control of expenses • Improvement in efficiency of expenditure by means of an analysis of its management and a plan of action for improving it. Since 2005, Mali has adopted a plan of action for the improvement of the management of public finances; • A change, in the medium term, of the objectives of benefits in order to comply with he trends of the new Strategic Framework for Growth and the Reduction of Poverty 2007/2011.

  15. De-concentration of Budgetary allocations (in thousands of CFA Francs)

  16. The flow of Aid and takeover • The National Strategy for the mobilization of aid is to invert the current trend which is approximately 70/30 in loans and donations. • Effective takeover occurring through reforms of the institutional framework of the management of public finances, moving from a greater sense of responsibility through decentralization and de-concentration. • The application of the Paris declaration regarding harmonization and alignment of aid.

  17. Indebtedness profile

  18. The profile of indebtedness Situation and Preliminaries • Respect of criteria for takeover. • Reality of the existence of a budgetary gap after the IADM, which reduced the volume by 1085,2 billion, that is a 60% reduction with a debt going from 1617,0 billions to 629 billion between 2005 and 2006. • Systematic recourse to loans at preferential rates

  19. CHALLENGES • REVIEW OF THE FRAMEWORK OF MONETARY AND BUDGETARY MANAGEMENT AND POLICIES IN THE MATTER WITH A VIEW TO THE ACHIEVEMENT OF THE MILLENNIUM GOALS • TO IMPROVE ECONOMIC AND FINANCIAL GOVERNANCE • TO STRENGTHEN PRIVATE PARTNERSHIPS • TO STRENGTHEN THE CAPACITIES OF NATIONAL PRIVATE INDIVIDUALS.

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