BAMAKO (Thomson Reuters Foundation) – The International Monetary Fund (IMF) has questioned the demotion of Mali’s finance minister just one month before the West African country holds presidential elections, a leaked memo shows.
Dioncounda Traore, Mali’s interim president, removed Tiena Coulibaly from his post as finance minister and appointed him economy minister in a cabinet reshuffle on June 22.
The IMF note suggested Coulibaly was demoted for refusing to approve some "dubious" financial transactions the government wanted to make before the end of its mandate. The finance minister has more power than the economy minister when it comes to budget decisions.
Mali is due to hold presidential elections on July 28.
“It seems likely that the reorganisation was engineered to force the departure of Tiena Coulibaly from the Ministry of Finance, and at the same time to weaken the Ministry by splitting off the Economy part,” the memo said.
“Minister Coulibaly (now the minister of economy) has been strongly resisting a number of financial transactions for which his agreement was required,” the memo added.
Mamadou Namory Keita, the new minister of finance, is an activist in the political party of the interim president and is thought to be more likely to yield to political pressure than the outgoing minister, the memo said.
There is a lot of pressure for these financial transactions, which include loan agreements with China’s EXIM bank. to be concluded before the end of the interim government, the IMF memo said, querying whether the outgoing government should be making such major decisions.
“These transactions are of such a scale and importance that it is questionable whether they should be taken by an interim government with a narrow mandate within the last month of its reign,” the memo added.
An IMF official told Thomson Reuters Foundation that its policy was not to comment on purported leaks but the IMF’s representative in Mali told a meeting with Malian authorities that the leak was from an internal IMF memo and apologised that it was made public, the government said in a statement.
The memo also praised Coulibaly for “enforcing strict spending discipline”, which ensured the country’s budget stayed within the limits agreed between the government and the IMF.
“This has prevented the diversion of public funds for campaign financing,” the memo said. “It is a concern whether this discipline will prevail under the new minister in the remaining month of this government, which will be mostly taken up by the election campaign."
The Malian government said in a June 28 statement that the minister of finance and minister of the economy had met the IMF’s Mali representative after the note was leaked onto the Internet.
It added that a cabinet reshuffle was the government’s prerogative and that the June 22 reorganisation was necessary for the internal cohesion of the ministries of finance and economy and the budget.
Traore took over as interim president in April 2012 following a coup. He promised to hold elections and fight Tuareg and Islamist rebels occupying half the country. Mali continues to be threatened by militants and analysts warn the upcoming elections could be chaotic.
The IMF said Mali's government seemed intent on concluding “dubious transactions” before the end of the transition period.
These transactions include a CFA 26 billion ($52 million) loan agreement the government wants to sign with the Chinese EXIM Bank to finance a National Security Network Project, the memo added.
Coulibaly had resisted loaning Exim Bank the money because “the project is technically redundant,” the memo said.
“All its security features are included in a Chinese fibre optics project already under execution,” it added.
The memo also queried a CFA 40 billion ($80 million) loan agreement that the government wants to sign with Exim Bank, this time for 600 Chinese-made trucks.
Coulibaly had been resisting the loan because it was not clear which companies would receive the trucks, or on what conditions these operators would reimburse the government, the memo said.
In response to the leaked memo, the government said that no decision had been taken with regards to the fibre optic project but it would take into account the IMF’s viewpoint.
The government also said it would not be following through with the purchase of 600 trucks as per an agreement that it had signed with the IMF in the 1980s to disengage government from transportation activities.
While the government said all the transactions are in line with national rules the IMF is less convinced.
“These transactions are questionable on several grounds,” the memo said.
“The personal involvement of senior politicians and/or their relatives; failure to adhere to standard budgetary and procurement procedures; the speed with which they are processed to get them concluded before end-July which does not permit proper consideration and scrutiny; and the fact that they are of a scope and nature that makes them fall outside the limited mandate of the interim government,” it added.