IMF Executive Board Concludes 2022 Article IV Consultation and approves $ 86.9 Million Extended Credit Facility and Extended Fund Facility for the Islamic Republic of Mauritania

January 25, 2023

  • The IMF Executive Board approved 42-month arrangements under the Extended Credit Facility and Extended Fund Facility in the amount of US$ 86.9 Million for The Islamic Republic of Mauritania. The Executive Board decision enables an immediate disbursement of US$ 21.7 million.
  • The Mauritanian authorities’ IMF-supported reform program presents a comprehensive policy package to preserve macroeconomic stability, strengthen the fiscal and monetary policy frameworks, and improve governance, to consolidate the foundations for sustainable, inclusive growth, and reduce poverty.
  • Mauritania’s economic growth has accelerated in 2022, driven primarily by the extractive sectors, while Inflation should stabilize at approximately 11 percent reflecting the central bank tight monetary policy.

Washington, DC : The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation [1] and approved 42-Month arrangements of SDR 64.40 million (about US$ 86.9 million) under the Extended Credit Facility and Extended Fund Facility with the Islamic Republic of Mauritania. The Board approval will allow for SDR 16.10 million (US$ 21.7 million) to be made available immediately to Mauritania. The remaining amount will be phased in over the duration of the program, subject to semi-annual reviews.

Mauritania’s economic reform program supported by the IMF arrangements aims to preserve macroeconomic stability, strengthen the fiscal and monetary policy frameworks, consolidate the foundations for sustainable, inclusive growth, and reduce poverty. The program includes three pillars: (i) improving medium-term budgeting to maintain fiscal sustainability, to gradually reduce debt and to smoothen the volatility of extractive revenues and protect social spending; (ii) strengthening the monetary and foreign exchange policy frameworks and development of the money and foreign exchange markets to gain better control of inflation and to ensure that Mauritania’s economy is more resilient against exogenous shocks; and (iii) structural reforms designed to strengthen governance, transparency, and the private sector through an improved business climate and financial inclusion.

Economic growth has accelerated and is expected to reach 5.3 percent in 2022, driven primarily by the mining sector, agriculture, and fisheries. Inflation is expected to stabilize at approximately 11 percent as a result of the tight monetary policy conducted recently by the Banque Centrale de Mauritanie (BCM).

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

“A determined response to the COVID-19 pandemic and sizable international financial support have placed Mauritania on a recovery path. With sound policies, donor support, and favorable iron ore prices, international reserves accumulated, and the fiscal balance ended in a surplus in 2021.”

“However, a confluence of shocks including Russia’s war in Ukraine and regional tensions have reverted the trend accumulation of foreign exchange reserves in 2022 and narrowed the space for policy intervention, while Mauritania still faces significant human and infrastructure development needs. Surging international commodity prices have led to inflationary pressures and food insecurity.”

“The Central Bank of Mauritania has appropriately tightened its monetary stance in 2022 to contain rising inflation. A continued tight monetary policy stance closely coordinated with budget execution is needed to actively manage the banking system’s liquidity and reduce inflation. Careful monitoring of financial sector developments is also needed to strengthen the banking sector resilience to shocks.”

“The authorities’ strategy to preserve infrastructure investment and social spending would help achieve higher and greener growth and need to remain within a disciplined fiscal policy to contain debt. In this context, rebalancing public expenditure away from untargeted current spending and enhancing the efficiency of public investment through better prioritization, implementation and maintenance are needed.”

“Decisive implementation of structural reforms would limit scarring from the COVID-19 pandemic and pave the way for a higher, more inclusive and private sector-led growth. Priorities include improving governance, transparency, the business environment and financial inclusion, and mitigating the challenges posed by climate change.”

“The new 42-month arrangements under the Extended Credit Facility and Extended Fund Facility have a credible policy package to address Mauritania’s challenges. In particular, the program aims to help maintain reserves above the adequacy threshold in preparation for greater exchange rate flexibility, strengthen policy frameworks, and promote sustainable and inclusive growth. The arrangements will also contribute to the development of human capital, poverty reduction, and private sector growth.”


[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

Mauritania: Selected Economic indicators, 2021–23

Poverty rate: 28 percent (2019)

Quota: SDR 128.8 million

Population: 4.4 million (2018)

Main exports: iron ore, fish, gold

2021

2022

2023

Est.

Proj.

(Annual change in percent; unless otherwise indicated)

National accounts and prices

Real GDP

2.4

5.3

4.3

Real extractive GDP

-12.6

17.0

8.3

Real non-extractive GDP

6.3

2.1

3.3

GDP deflator

12.6

0.2

2.5

Consumer prices (end of period)

5.7

11.0

9.0

(In percent of nonextractive GDP; unless otherwise indicated)

Central government operations

Revenues and grants

27.3

29.7

27.1

Nonextractive

19.9

20.7

21.9

Taxes

13.8

15.5

16.6

Extractive

4.6

7.1

3.5

Grants

2.7

1.8

1.7

Expenditure and net lending

24.5

31.4

30.3

Current

15.4

21.0

18.7

Capital

9.2

10.5

11.5

Primary balance (excl. grants)

1.1

-2.5

-3.9

Overall balance (in percent of GDP)

2.2

-1.4

-2.6

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

49.1

48.4

50.3

(Annual change in percent; unless otherwise indicated)

Money and Credit

Broad money

20.4

5.0

8.1

Credit to the private sector

8.4

16.4

12.1

Balance of Payments

Current account balance (in percent of GDP)

-7.9

-17.3

-11.4

Excl. externally financed extractive capital imports

0.9

-7.5

-5.5

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

2,347.5

1,501.3

1,568.3

In months of prospective non-extractive imports

7.3

5.1

5.2

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

4,285.0

4,312.8

4,560.2

In percent of GDP

43.3

41.8

43.4

Real effective exchange rate

…

…

…

Memorandum items:

Nominal GDP (in millions of US$)

9,891.6

10,314.1

10,507.2

Price of iron ore (US$/Ton)

158.2

121.0

101.5

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

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

2/ From 2021, including renegociated, previously passive debt to Kuwait.

3/ Excluding hydrocarbon revenue fund.

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