IMF Delays $46 Million Mali Loan
Lender Investigates Accusations of Misuse of Funds
By IAN TALLEY CONNECT
May 22, 2014 4:53 p.m. ET
Wall Street Journal
The International Monetary Fund said on Thursday it is delaying a $46 million "poverty reduction" loan for Mali as it investigates accusations the government bought a $40 million jet for the president and is using state funds for the private sector.
The accusations are a setback for the U.S., France and other Western nations hoping to bolster an important nation in the Sahel, an impoverished band of Africa bordering the Sahara where Islamic militants threaten to destabilize the region.
"The IMF is concerned about the quality of recent decisions" by the Malian government, said IMF spokesman Gerry Rice. He said the fund was particularly concerned about "the purchase of the presidential plane and the issuance of significant state guarantees to allow a private company to buy supplies."
The controversy represents a delicate diplomatic balancing act for Western nations. International donors want to send a message that misuse of government funds during international financing won't be tolerated.
At the same time, they don't want to risk creating another failed state by completely shutting down aid. Those concerns have been brought to the fore in recent months by the kidnapping of girls in Nigeria by the Boko Haram militants. Worried about al Qaeda making inroads in the region, the U.S. last year stepped up its war role in Africa by helping the French fight militants in Mali.
The IMF late last year agreed to another low-interest loan to help the country cut poverty and boost growth. That is on top of the $130 million Mali already owes the IMF.
The allegations also have thrown into question aid from other donors.
The World Bank has around $267 million in aid projects committed to the country for this year alone, including electrification projects. Bank officials couldn't immediately say whether any of their projects would be affected by the allegations.
But a spokesman said the World Bank "is coordinating its response with the IMF and continues to monitor the situation with concern."
The IMF appears to be buying time for the Malian government to clean up its practices. Mr. Rice said the fund investigation would likely take time, forcing a delay of the first loan review originally scheduled for June.
"We stand ready to work with the Malian authorities on the diagnosis of weaknesses in public financial management and on remedial actions to address these weaknesses...so that we can move ahead with the review," he said.
Write to Ian Talley at ian.talley@wsj.com
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| Map of the West African state of Mali. |
By IAN TALLEY CONNECT
May 22, 2014 4:53 p.m. ET
Wall Street Journal
The International Monetary Fund said on Thursday it is delaying a $46 million "poverty reduction" loan for Mali as it investigates accusations the government bought a $40 million jet for the president and is using state funds for the private sector.
The accusations are a setback for the U.S., France and other Western nations hoping to bolster an important nation in the Sahel, an impoverished band of Africa bordering the Sahara where Islamic militants threaten to destabilize the region.
"The IMF is concerned about the quality of recent decisions" by the Malian government, said IMF spokesman Gerry Rice. He said the fund was particularly concerned about "the purchase of the presidential plane and the issuance of significant state guarantees to allow a private company to buy supplies."
The controversy represents a delicate diplomatic balancing act for Western nations. International donors want to send a message that misuse of government funds during international financing won't be tolerated.
At the same time, they don't want to risk creating another failed state by completely shutting down aid. Those concerns have been brought to the fore in recent months by the kidnapping of girls in Nigeria by the Boko Haram militants. Worried about al Qaeda making inroads in the region, the U.S. last year stepped up its war role in Africa by helping the French fight militants in Mali.
The IMF late last year agreed to another low-interest loan to help the country cut poverty and boost growth. That is on top of the $130 million Mali already owes the IMF.
The allegations also have thrown into question aid from other donors.
The World Bank has around $267 million in aid projects committed to the country for this year alone, including electrification projects. Bank officials couldn't immediately say whether any of their projects would be affected by the allegations.
But a spokesman said the World Bank "is coordinating its response with the IMF and continues to monitor the situation with concern."
The IMF appears to be buying time for the Malian government to clean up its practices. Mr. Rice said the fund investigation would likely take time, forcing a delay of the first loan review originally scheduled for June.
"We stand ready to work with the Malian authorities on the diagnosis of weaknesses in public financial management and on remedial actions to address these weaknesses...so that we can move ahead with the review," he said.
Write to Ian Talley at ian.talley@wsj.com
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