IMF approves aid restart for Mali after spending row

WASHINGTON (Reuters) - The International Monetary Fund’s board on Monday agreed to restart suspended aid to Mali after the West African country assuaged concerns about its spending, including the purchase of a $40 million presidential jet.

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

The decision allows Mali to receive about $11.7 million that had been delayed since May, after the IMF questioned the impoverished country’s purchase of the jet as well as inflated spending on military supplies.

Under fire was a $200 million state guarantee for a loan obtained by a private company that won a contract to provide supplies for the army.

The private company was also overcharging the government by as much as ten times for basic items like socks, Christian Josz, the IMF mission chief for Mali, told reporters in Washington.

To resume aid, the IMF required Mali to publish audits that showed irregularities in its spending and to close a loophole in the procurement code that allowed it to record the jet purchase outside the regular budget.

“The authorities agreed to publish the results of these audits, which was very important to us, because the reputation of the fund was at stake too,” Josz said.

Mali also agreed to update the IMF on its compliance with auditors’ recommendations, including sanctions on those involved in wrongdoing. The IMF will assess further steps when it returns to the country in March.

The World Bank, France and other donors followed the IMF in suspending assistance to Mali earlier this year, undermining confidence in a donor-backed recovery from twin crises: a coup and an al-Qaeda linked occupation in the north.

The row over spending led to criticism that the era of murky deals shrouding the administration of ousted president Amadou Toumani Toure had not come to an end.

The IMF’s decision to resume aid, first agreed with the government in September, should help restart support from other donors.

But the IMF said the country faces risks from the security situation and a recent outbreak of the Ebola epidemic that had infected eight people. It predicts the economy should expand 5.8 percent this year and 5.5 percent in 2015, provided Ebola does not spread.

The IMF agreed to lend Mali $46 million last year to help with its balance of payments and restore economic growth. The country has also received about half of the $4 billion pledged by other donors, the IMF said.