Mali

Mali had chosen in the 1960s not to be part of the West African Monetary Union, but it fixed its exchange rate to the French franc in a broadly equivalent way. By the 1970s it was seeking to join WAMU, but its entry was held up until financial imbalances – large fiscal deficits financed by the banking system – had been brought under control, in the early 1980s.

YearsTargets and attainmentClassification
1974-83exchange rate fixed from 1968 to French franc (therefore fixed vs CFA franc also), with convertibility guaranteed via operations account at French Treasury as in west and central African monetary unions, but separate currency and separate (and new) Malian central bank (with strong French role); 1967 agreement with France had envisaged Mali joining WAMU when financial balance achieved, but this turns out to take longer than expected; 1960s policies had included nationalisation, planning, and price and import controls, which were only slowly being dismantled; basic banking system, largely state-owned; central bank can lend within limits to government and aims to control credit via rediscount ceilings for banks and large (state) enterprises, with little use of interest rates; recurring over-expansions of credit to government and state (mainly agricultural product) enterprises, resulting in net foreign assets falling below zero; 1977 new monetary agreement with France, designed to achieve financial equilibrium as prerequisite for entry into WAMU, includes fiscal deficit cuts and credit tightening by central bank in response to overshoots of ‘operating balance’ with French Treasury; government adopts successive stabilisation programmes and structural reforms which finally enable Mali to enter WAMU in June 1984; entry involves demise of Malian central bank, currency conversion (from Malian franc to CFA franc), consolidation of operations account debts, cancellation of substantial outstanding loans from banks to state enterprises and government, and replacement of existing monetary instruments by those used by BCEAOaugmented exchange rate fix AERF
1984-2017member of west African CFA franc zone, see West African (Economic and) Monetary Union; national credit committee has some say pre-1994 over allocation of credit within country, but there is no national monetary policymember of currency union CU

Selected IMF references: RED 1970 pp30-1; RED 1973 pp57-60; RED 1975 p48; RED 1978 pp26-7; SR 1978 pp3-4, 9; SR 1979 p3; SR 1981 p17; RED 1985 pp35-7; SR 1985 pp2-3.

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