Parastatal divestiture : Agricultural Development and Marketing Corporation, FY 1986 African economic policy reform program grant (612-0227)

The program will: (1) increase the efficient use of resources by transferring them from the public to the private sector; (2) inject critically needed foreign exchange into the economy; and (3) increase the amount of credit available to banks for onlending to private borrowers. The Government of Mali (GOM) will use the MK equivalent of the cash grant to partially finance purchase of the Strategic Grain Reserve from ADMARC. The release of the first $10 million is conditional on ADMARC"s divestiture of at least MK30 million of its equity share holdings in agro-industries, manufacturing, transportation, and finance. The remaining $5 million will be released after the GOM either divests another MK15 million in ADMARC"s equity holdings or develops and adopts a private-sector oriented strategy for handling any assets which remain after divestiture. In addition, the GOM will covenant to: (1) conduct a series of capital markets studies; (2) establish, if recommended by the studies, an equity financing facility for loans to investors in divested firms; and (3) develop a plan for managing the Strategic Grain Reserve. The program includes an additional grant of $500,000 to finance: TA in divestiture and restructuring; the capital markets studies; and U.S. academic training in enterprise and investment management for eight persons.