IMF Executive Board Completes Second Review of the Extended Credit Facility with the Islamic Republic of Mauritania

December 6, 2018

  • Policy implementation has been satisfactory and the program is on track.
  • The economy is recovering, and the outlook is favorable despite significant socio-economic challenges.
  • Reforms seek to create fiscal space for social spending and infrastructure through revenue mobilization and expenditure prioritization, as well as to modernize monetary and exchange rate policies and strengthen financial sector stability.

On December 6, 2018, the Executive Board of the International Monetary Fund (IMF) completed the second review of the three-year arrangement with Mauritania under the Extended Credit Facility (ECF). The arrangement, with total access of SDR 115.92 million (about US$ 160.38 million), or 90 percent of Mauritania’s quota, was approved on December 6, 2017 (see Press Release No. 17/468). The completion of the review allows the authorities to draw SDR 16.56 million (about US$22.91 million) bringing total purchases to SDR 49.68 million (about US$ 68.74 million).

Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, made the following statement:

“Mauritania’s performance under the Fund-supported program has been satisfactory. The economy is recovering, macroeconomic stability has been maintained, external debt stabilized, and reforms launched to modernize economic institutions and the policy framework. The parliament approved a new organic budget law, as well as banking and central bank laws, and the central bank introduced new monetary policy instruments to improve liquidity management. Nonetheless, despite a positive outlook, considerable vulnerabilities and risks remain, particularly given the increasingly less favorable international environment, and lower commodity export prices weighing on the external and fiscal positions. It is important that the authorities, therefore, continue with prudent macroeconomic policies while pressing forward with structural reforms supportive of inclusive growth, poverty reduction, and good governance.

“The authorities are committed to continuing with fiscal consolidation to manage exogenous shocks and improve debt sustainability, while creating fiscal space for infrastructure and social spending. They are also continuing with the implementation of priority fiscal reforms, including strengthening tax policy, revenue administration, budget processes, and debt management. Ensuring debt sustainability will require continued prudent borrowing, notably by seeking grants and concessional loans.

“The potential development of offshore gas presents opportunities as well as risks, and high upfront costs. The authorities should choose the most economical option to finance the government’s share in the project, while preserving international reserves, given the uncertain global environment. Developing a robust fiscal framework will be key to managing future gas windfall revenues.

"The authorities plan to modernize the monetary policy framework and ensure regular, market-based access to foreign exchange. Introducing greater exchange rate flexibility will help absorb exogenous shocks and preserve official reserves. The authorities are taking action to further strengthen bank supervision to address financial sector vulnerabilities while supporting credit and financial inclusion.

“Going forward, it will be important to step up efforts to diversify the economy, improve the business environment, strengthen economic governance, and fight corruption. In that connection, implementation of existing plans and strengthening of audit institutions will be key.”

Mauritania: Selected Economic Indicators, 2015–20

2015

2016

2017

2018

2019

2020

Proj.

Proj.

Proj.

(Annual change in percent)

National accounts and prices

Real GDP

0.4

1.8

3.0

3.5

5.7

4.8

Real extractive GDP

-5.6

0.7

-7.1

-8.7

18.7

3.1

Real non-extractive GDP

1.4

2.0

4.4

5.0

4.3

5.0

GDP deflator

-4.2

3.3

3.5

3.0

2.9

2.7

Consumer prices (period average)

0.5

1.5

2.3

3.0

3.9

4.0

(In percent of nonextractive GDP; unless otherwise indicated)

Central government operations

Revenues and grants

32.6

31.7

31.8

32.0

32.1

31.9

Nonextractive

26.8

27.9

27.9

27.9

27.6

27.5

Taxes

16.9

18.7

19.6

20.0

20.2

20.4

Extractive

3.8

1.7

2.8

3.2

3.4

3.5

Grants

2.0

2.2

1.1

0.8

1.2

0.9

Expenditure and net lending

36.3

32.3

31.8

31.7

31.9

31.6

Current

20.6

19.0

19.4

18.5

19.0

18.9

Capital

15.6

13.3

12.4

12.8

12.9

12.7

Primary balance (excl. grants)

-4.5

-1.5

0.3

0.8

0.5

1.0

Overall balance (in percent of GDP)

-3.4

-0.5

0.0

0.2

0.2

0.4

Public sector debt (in percent of GDP) 1/ 2/

76.1

77.7

76.8

84.4

82.1

80.5

(Annual change in percent; unless otherwise indicated)

Money and Credit

Broad money

0.4

7.1

13.7

10.5

10.7

11.4

Credit to the private sector

9.7

8.1

7.5

16.9

12.2

13.1

Balance of Payments

Current account balance (in percent of GDP)

-19.8

-15.1

-14.4

-15.9

-12.6

-8.9

Excl. FDI-financed imports of extractive capital

-12.0

-11.2

-8.2

-12.5

-9.7

-6.2

Gross official reserves (in millions of US$, eop) 3/

822.8

824.4

849.0

900.2

983.9

1,077.1

In months of prospective non-extractive imports

5.6

5.5

4.6

5.1

5.6

6.1

External public debt (in millions of US$) 2/

3,208.6

3,354.9

3,571.6

3,681.9

3,813.9

3,964.7

In percent of GDP

66.4

71.6

72.5

70.1

68.7

68.7

Real effective exchange rate

7.8

-5.8

-2.1

…

…

…

Memorandum items:

Nominal GDP (in millions of US$)

4,830.5

4,684.5

4,923.0

5,251.7

5,550.7

5,774.5

Price of iron ore (US$/Ton)

56.1

58.6

71.1

69.6

67.5

65.8

Sources: Mauritanian authorities; and IMF staff estimates and projections.

1/ Including government debt to the central bank recognized in 2018.

2/ Excluding passive debt to Kuwait under negotiation.

3/ Excluding oil fund.

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Randa Elnagar

Phone: +1 202 623-7100Email: MEDIA@IMF.org