Press Release No. 10/356

Press Release: Statement at the Conclusion of an IMF Staff Visit to the Islamic Republic of Mauritania

September 27, 2010

An International Monetary Fund mission, led by Mr. Boileau Loko visited Nouakchott from September 15 to 26, 2010 to conduct discussions regarding the first review of the 2010–12 three-year program supported by the Extended Credit Facility (ECF). During the visit, the mission held discussions with several members of the government. In addition, the mission met with a number of economic and financial policymakers, representatives of the banking community, universities, trade unions, civil society, and the diplomatic corps. At the end of its visit, the mission issued the following statement:

“The data available point to a recovery in economic activity. Real non-oil GDP growth is expected to be around 5.5 percent in 2010, driven essentially by agriculture, the extractive industries (iron, copper, and gold), and the building and public works (BTP) sector. At end-June 2010, the inflation rate stood at 6.7 percent year-on-year owing to the rise in energy and food prices on the world market. Higher prices of the country’s main export products should help bring the current account deficit back down to below 10 percent of GDP.

“Implementation of the government’s ECF-supported economic and financial program has been broadly satisfactory, thus fostering the restoration of macroeconomic stability. The first half of 2010 saw a marked increase in revenue resulting from a combination of robust collection efforts and an upturn in economic activity. Operating expenditure has been contained, but the low rate of capital expenditure execution has persisted. At end-June 2010, official foreign exchange reserves amounted to 210.6 million US dollars, that is, equivalent to 2.1 months of imports. The mission also took note of progress made in implementing structural reforms that lay the foundation for achieving higher, sustained levels of growth conducive to reducing poverty.

“The mission welcomes the convergence of views with the authorities on the need to accelerate fiscal consolidation efforts as well as to deepen ongoing reforms in public financial management, public enterprises, the civil service, and the monetary sector. The mission and the authorities also agreed that strengthening social policies and putting in place social safety nets as well as improving the business climate are necessary steps for promoting development and improving the wellbeing of the Mauritanian people.

“In that regard, the authorities and the mission reached understandings, ad referendum, on the objectives to be achieved in 2011 under the ESF, which remain in line with the program negotiated for the period 2010-2012. These objectives consist in achieving real non-oil GDP growth of 5.5 percent, containing inflation at 5 percent, raising foreign exchange reserves to 2.7 months of imports, and consolidating the basic fiscal balance surplus achieved in 2010.

The mission takes the opportunity to thank the authorities for their welcome, availability, and hospitality as well as for the good conditions under which the work took place.”