IMF seals accord with Mali to revive aid after row over spending

Reuters
A man walks past the logo of the International Monetary Fund at the main venue for the IMF and World Bank annual meeting in Tokyo October 10, 2012. REUTERS/Kim Kyung-Hoon

BAMAKO (Reuters) - The International Monetary Fund has reached an agreement with Mali that could restart suspended aid to the West African nation, the head of a mission to the country said. The IMF and the World Bank halted nearly $70 million in financing after the Fund expressed concern in May over Mali's purchase of a $40 million presidential jet and inflated spending on military supplies. "We have reached an agreement to move forward," Christian Josz told a news conference in the Malian capital Bamako late on Thursday. "We are in a position to recommend that the IMF board of directors conclude the first and second review programmes." Josz said an audit had revealed over-billing of 29 billion CFA francs ($56.55 million) in the military contract and other shortcomings in the awarding of the contract. "Mali is now committed towards transparency. It is up to the government to implement the recommendations of the various reports and identify perpetrators of the over-billing," he said. In a statement released at the end of its mission to the country, the IMF said Mali's economy should grow by 5.8 percent this year and by 5.5 percent next year. The expansion follows stagnation in 2012 when Malian soldiers ousted the president and a mix of separatist and al Qaeda-linked rebels then seized the country's desert north. Although a French intervention last year scattered rebels from northern towns and a United Nations peacekeeping mission has been deployed there, a poor harvest meant that growth in 2013 was modest at 1.7 percent. The IMF, which helps countries with policy advice and also sometimes lends to help with balance of payment difficulties, reached an agreement with Mali on new spending rules and also on the amendment of its 2014 budget to correct the over-billing. Mali secured more than $4 billion in donor pledges last year to rebuild, but the controversy over the jet and the military supplies have undermined confidence in the government of Ibrahim Boubacar Keita, who won post-conflict elections last year. (1 US dollar = 512.8000 CFA franc) (Reporting by Tiemoko Diallo and Adama Diarra; Writing by Bate Felix and David Lewis; Editing by Gareth Jones)