Press Release No. 24/379

Mauritania: IMF Staff Concludes 2024 Article IV Consultation Mission and Reaches Staff-Level Agreement on Third Review of Extended Fund and Extended Credit Facilities and the Second Review of Resilience and Sustainability Facility

October 17, 2024

• Despite its resilience, the Mauritanian economy is expected to slow down in 2024 and in the medium term, in a context marked by the persistence of downside risks linked to an escalation of geopolitical tensions in the region, delays in the start of operation of the Greater Tortue Ahmeyim (GTA) gas project, and weather shocks.
• A prudent rule-based fiscal policy would help preserve debt sustainability. Developing the banking sector and sustaining the implementation of the national governance action plan and the new investment code would foster the role of the private sector and enhance prospects for inclusive growth.
• IMF and Mauritania reached staff-level agreement on the Third Review of Mauritania’s economic program under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) and the Second Review of the Resilience and Sustainability Facility (RSF)”

Washington, DC: An International Monetary Fund (IMF) team, led by Felix Fischer, visited Nouakchott during October 3–16, 2024 to conduct the 2024 Article IV consultation and to hold discussions on the Third Review of Mauritania’s ECF/EFF and the Second Review of the RSF arrangement, and at the end of the mission, Mr. Fischer issued the following statement:

“The Mauritanian economy is expected to slowdown in 2024 with a growth rate estimated at 4.6 percent (compared to 6.5 percent in 2023) reflecting sluggish extractive sector. The economic growth in 2025 is projected at 4.2 percent, reflecting a slowdown in the mining sector, moderated by the expected start of the GTA gas project. The growth outlook is subject to significant risks, including an escalation of geopolitical tensions in the region, additional delays in the start of operation of the GTA gas project, and the occurrence of weather shocks.

“Anchoring fiscal policy to the non-extractive primary balance would reduce the impact of fluctuations in commodity prices on the economy and maintain debt sustainability. After a tightening since 2022, conditions are favorable to shift towards monetary policy easing. The mission encourages the ongoing reforms aimed at financial sector development and stability, which would enhance financial sector contribution to economic development. The timely adoption and implementation of the new investment code will contribute to level the playing field among all market participants and foster private sector-led inclusive growth.

“IMF staff and Mauritanian authorities have reached a staff level agreement on policies to complete the Third Review of Mauritania’s blended ECF/EFF and the Second review of the RSF. Subject to approval by the IMF Executive Board, Mauritania will receive a disbursement of SDR 6.4 million (about $ 8.6 million) under the ECF and EFF arrangements and SDR 29.72 million (about $ 39.7 million) under the RSF arrangement, bringing the total disbursement under the EFF/ECF and the RST to SDR 89.7 million (about $ 119.7 million).

“Performance under the program is robust — all quantitative targets for end-June 2024 have been met. Fiscal consolidation is proceeding in line with the fiscal rule aimed at converging in the medium term towards the fiscal anchor (defined by the non-extractive primary deficit) of 3.5 percent of GDP. Capitalizing on Mauritania's substantial tax potential, better domestic revenue mobilization will help create fiscal space to meet Mauritania's significant development needs while preserving the medium-term budgetary framework credibility.

“The structural reform program, integrating climate considerations, is advancing well. The mission noted the progress made in finalizing the draft laws on SOEs, asset declaration, and conflicts of interest, and encourages the authorities to finalize these important reforms in line with their Governance Action Plan.”

“The team met with His Excellency the President of the National Assembly Mohamed Ould Megett, His Excellency, the Prime Minister Moctar Ould Diay, the Governor of the Central Bank Mohamed Lemine Dhehby, the Minister of Economy and Finance Sid’Ahmed Bouh, and the Minister Delegate in charge of the Budget Codioro N'Guenor. The team held also meetings with the Minister of Justice, the Minister of Energy and Oil, the Minister of Mining and Industry, the Minister of Hydraulics and Sanitation, the Minister of Environment and Sustainable Development, , other senior government officials, the civil society, the banking association and other representatives of the private sector, and donor community.

“The IMF team would like to thank the Mauritanian authorities and various stakeholders for the excellent hospitality and cooperation and candid discussions during the mission.”