Mali Public Expenditure Review

Mali is a low-income, fragile country that has suffered extraordinary setbacks in recent years. It is a landlocked economy which is highly dependent on agriculture, and thus vulnerable to external shocks and adverse weather condition. With a per capita gross domestic product (GDP) of US 875 dollars (current USD) in 2019, Mali is in the lower 15th percentile of the world's income distribution. Around 42 percent of the population live in extreme poverty. It is also a fragile state that has witnessed persistent conflict with political coups, social tensions, insecurity, and violence. The coup in 2012 has led to continued violence and displacement, leaving 8.7 million people, more than 45 percent of the population, living in crisis affected areas. It was followed by the military coup in August 2020 which has brought in a transitional civil government. The increasingly fragile security situation has also led to spikes in security expenditure, crowding out spending on public services and investment. This Public Expenditure Review (PER) proposes options to address this challenge, including improving spending efficiency and identifying ways to equitably increase domestic revenue. The policy actions and reforms it proposes will create the fiscal space to promote inclusive and sustainable growth. Starting with an overview of macro-fiscal developments, it examines Mali's expenditure patterns and fiscal sustainability and benchmarks its performance against peer countries. It reviews the domestic revenue needed to meet the Government's significant financing requirements and how the public finances are managed. It then investigates public spending efficiency in three sectors: education, health, and agriculture. These were chosen for their economic and social importance as well as their considerable share of public expenditure (over 30 percent). The PER provides some context for each sector, then analyzes financing and efficiency using a set of methodologies based on granular spending data and surveys, and concludes with suggested policy actions