Press Release No. 18/101

IMF Staff Concludes Review Mission to the Islamic Republic of Mauritania

March 22, 2018

• IMF staff and the Mauritanian authorities have reached a preliminary agreement to complete the first review of the program supported by the Extended Credit Facility.
• The economic outlook is favorable due to sustained commodity prices and ongoing economic policy efforts, but considerable challenges remain to achieve inclusive growth.
• Economic recovery continues, with growth estimated at 3-3½ percent in 2017 and 2018.

An IMF staff team led by Mr. Eric Mottu visited Nouakchott from March 8-21, 2018, to conduct discussions on the first review of the economic and financial program supported by the IMF under the Extended Credit Facility (ECF) and approved as part of a three-year arrangement by the IMF Executive Board on December 6, 2017, (see Press Release No. 17/468) for a total amount of SDR 115.92 million (approximately US$168.2 million at current exchange rates). At the end of the visit, Mr. Mottu issued the following statement:

“IMF staff and the Mauritanian authorities have reached a preliminary agreement to conclude the first review of the economic program supported by the Extended Credit Facility. Subject to the approval of the IMF’s management and Executive Board, Mauritania will benefit from a second disbursement of SDR 16.56 million (around US$ 24.0 million) following the Executive Board’s review scheduled for May 2018.

“The economic recovery continues, with growth estimated at 3-3½ percent in 2017 and 2018, and moderate inflation of 2.3 percent on average in 2017. International reserves reached US$ 849 million at end-2017 (5.1 months of non-extractive imports), while the primary budget balance excluding grants was in positive territory at 0.3 percent of non-extractive GDP in 2017, building on the consolidation efforts that began in 2015-16 following the drop in commodity prices. The external current account deficit (excluding extractive sector imports) also improved, contracting from 11 percent of GDP in 2016 to 8 percent in 2017. Borrowing slowed, with external debt stable at 72 percent of GDP.

“Against this background, the authorities’ economic and financial program is on track and its implementation has been satisfactory. All performance criteria were met at end-December 2017, and all structural benchmarks planned between December 2017 and March 2018 have been or are in the process of being met. The Customs Code has been approved, the new Organic Budget Law has been submitted to parliament, the tax procedures code will be submitted to the Cabinet for approval, new monetary policy instruments have been introduced and the minimum capital requirement for banks will be raised to strengthen the stability of the financial system.

“The economic outlook is favorable owing to sustained commodity prices and ongoing economic policy efforts. At the same time, considerable challenges remain to entrench macroeconomic stability, achieve strong and inclusive growth, which creates employment and reduces poverty, and improve the business environment and economic governance.

“In 2018, the budget shortfall resulting from recent higher global oil prices will be partially offset by windfall revenue from extractive industries. The authorities have committed to undertaking all the measures required during the year to achieve the program’s objectives, particularly in relation to the fiscal balance, priority social spending and international reserves. They will continue to adopt a prudent borrowing policy, notably avoiding non-concessional loans to guarantee debt sustainability. They will gradually expand targeted social safety nets throughout the country and will press ahead with reforms aimed at improving the business climate and strengthening economic governance.

“The team would like to thank the Mauritanian authorities and all other interlocutors for their warm welcome, productive discussions, and cooperation.”