Thursday, July 31, 2008

Macro-Modelling for Poor Countries- case of Mali

Going over Mali's Poverty Reduction Strategy Paper's I came over the following under 'Capacity building in macro-economic modelling and analysis';
-Preparation of micro-simulation model (MEGC) for analysis of impacts of exogenous shocks and policy measures on poverty and income distribution (World Bank financing)

-Macro-sectoral forecasts model, as tool for analysis of growth-oriented sectors.

For Comment: How much economic modelling is required before you can reduce poverty?


The country's budget planning gets an 'A' according to one rating;
Mali’s MTEF had the top “A” rating in its 2004 HIPC tracking exercise (question 7). However, a more recent assessment finds inadequate integration among the many tools developed to support reforms, including the MTEF, the sector MTEFs, the macroeconomic framework, the new budget nomenclatures, and the multi-year investment program. Timetables of the different exercises aren’t properly synchronized. Sector MTEFs are prepared mainly to satisfy donors, and are separate from the program budget process.

Promises from the latest Letter of Intent
Mali is vulnerable to external or natural exogenous shocks. Without the fiscal space to respond rapidly to ad hoc demands, there is a risk that macroeconomic stability and the development program will be undermined. The Government considers that in the mediumterm, a zero basic balance is the most appropriate budget target for responding to emergent needs. In 2008 the deficit in the basic balance should be 1.9 percent of GDP, compared with 1.1 percent in 2007, reflecting the budgetary impact of the terms of trade. The aim is to reduce the deficit to 1 percent of GDP in 2009 and achieve balance in 2010. In order to respect the programming of expenditure to reduce poverty, measures have been implemented to correct the downward trend in the tax to GDP ratio observed since 2005....

Improving the quality of public spending remains a top priority. In coordination with our external partners, measures have been included in the Government Action Program for Improving and Modernizing Public Finance (PAGAM-GFP) to respond, among other things, to the conclusions of the Public Expenditure and Financial Accountability (PEFA) exercise. An action plan incorporating PEFA measures has been prepared for 2008. Efforts are under way to pursue implementation of the PAGAM-GFP/PEFA action plan, in particular by completing the connection of authorizing officers (ministries, institutions, regions) to the computerized expenditure system; improving the execution rate of programs by devolving parts of the Procurement Office to the regions; reviewing the Procurement Code; shifting gradually all donors from projects to budget support; and putting in place an economic and financial analysis unit to help strengthen the capacities of the Finance Committee of the National Assembly.

Mali - Public expenditure review

Mali- Creating Fiscal Space
Public Expenditure Management in Francophone Africa: A Cross-Country Analysis

Development of the cities of Mali : Challenges and priorities

Mali budget calendar
  • Ministry review of budget-programmes
  • Preparation of macro-fiscal framework as part of the Medium Term Budget Framework (MTBF)
  • Preparation of Budget Circular (including ceilings and donors disbursement projections)
  • Preparation by sector ministries of draft annual budget estimates, including the detailed budget-programmes, on the basis of sector expenditure ceilings in line with the CBMTMEF review of ministries’ budget requests, including the budget-programmes
  • Budget negotiations and finalisation of draft Budget d’Etat
  • Adoption of draft Budget by Council of Ministers
  • Government submits the draft Budget d’Etat to the National Assembly
  • Examination and adoption of the Loi de Finances by the National Assembly

Doing business 2008 Mali

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