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---

### Preface: mission overview, participants, and purpose
- Mission: evaluation and training technical assistance (TA) mission in Nouakchott, Mauritania, from January 8 to 19, 2024.
- Objectives:
  - Review public debt projection frameworks and policy analysis tools used by MF, MEDD and BCM.
  - Strengthen public debt projection and analysis capacities.
- Mission team:
  - Ms. Marie-Pierre Aquino Coste (mission chief)
  - Mr. Naomitsu Yashiro (senior economist)
  - Mr. Oumar Dissou (debt management advisor at AFRITAC West)
- Main interlocutors included senior directors from MF, MEDD and BCM; work focused with the Technical Committee supporting the National Committee on Public Debt (CNDP).
- Action plan agreed ad referendum; expected completion: December 2024.

### Summary: institutional context, key findings, and agreed TA plan
- Purpose:
  - Assess capacity to project public debt and capacity development needs across MF, MEDD, BCM.
  - Strengthen capabilities for public debt projections.
- CNDP:
  - Inter-agency group of six directors general from MF, MEDD, BCM; supported by a Technical Committee to publish debt statistics and produce public debt projections and debt sustainability analysis.
- Key capacity findings:
  - CNDP and its Technical Committee lack tools to produce coherent public debt projections and lack an appropriate framework for macroeconomic projections and macro-fiscal policy assessment.
  - Staffing constraints in the CNDP Technical Committee limit development capacity for public debt projections.
- Agreed TA plan (ad referendum):
  - Implement technical assistance to enable public debt projections using ICD's Public Debt Dynamics Tool (DDT).
  - Establish a core team led by Mr. Niang Idrissa, Director of External Debt, MF.
  - Program features:
    - Initial training on public debt projections using the DDT, adapted to the Mauritanian economy.
    - Operationalization of the DDT and design of customized shocks relevant for Mauritania.
    - Institutionalization of public debt projections (e.g., as a public debt report attached to the budget).
    - Two missions combining remote and in-person training, with frequent virtual engagements over a one-year period.
  - Expected outcomes and result indicators summarized in the results framework (Annex B).

### Section I — Macro-fiscal context, performance, outlook, and debt situation
- Country vulnerabilities and shocks:
  - Highly exposed to commodity price fluctuations and natural disasters.
  - Russian-Ukrainian war increased food prices and food insecurity for 20% of the population.
  - Rising international food and energy prices and falling iron ore prices widened the trade deficit and reduced FX reserves in 2022.
  - Frequent and severe climate-related natural disasters require substantial adaptation measures.
- IMF support and financing:
  - Extended Credit Facility and Extended Fund Facility of $86.9 million from the IMF in February 2022.
  - RSF accession in December 2023: $258.21 million for climate adaptation and green transformation.
- Macro performance and outlook:
  - Real GDP growth: 2022: 6.4%; 2023: likely slowed to around 4%.
  - Inflation: October 2022 peak: 12.7%; by September 2023: 3% year-on-year.
  - Foreign currency liquidity reserves: stabilized at 6.4 months of non-extractive imports by 2023.
  - Growth drivers: increased iron ore production and commissioning of the new offshore gas station in 2024.
  - Risks: geopolitical tensions, natural disasters, delays in GTA gas extraction.
  - Political: presidential elections scheduled for June 2024.
- Debt:
  - Risk of debt distress improved from "high" to "moderate", mainly due to renegotiation of the US$300 million loan from Saudi Arabia on concessional terms.
  - Public debt currently estimated at around 47% of GDP and set to decline due to improved fiscal performance in 2023.
  - Authorities reactivated CNDP in 2022 and requested IMF TA for public debt projections.
  - Authorities lack capacity or data to produce their own Debt Sustainability Analysis (DSF).

### Authorities’ TA request and preparatory engagements
- MF requested ICD TA to strengthen CNDP public debt projection and analysis capacity and improve inter-institution communication on debt policy.
- Preparatory timeline and engagements:
  - Virtual meeting with Mr. Niang Idrissa on September 15, 2023 to form an inter-agency team for DDT use.
  - Core team decision to undergo online DDTx training on EdX (French).
  - Virtual scoping meeting on November 8, 2023 with managing directors of MF, MEDD, BCM.
  - Detailed questionnaire issued in November 2023; follow-up in December 2023 informed the action plan.
- Coordination:
  - Mission collaborated with SPR economist Mr. Benjamin Kett, AFRITAC West Macro-Fiscal Advisor Mr. Djoret Biaka, and AFRITAC West Debt Management Advisor Mr. Oumar Dissou.

### Virtual preliminary training: participants, constraints, and tool choice
- Working group: core group from MF, MEDD, BCM; invitations extended to 12 MF officials, 3 MEDD officials, 6 BCM officials, and 2 academia members.
- Capacity constraints identified:
  - MF External Debt Department does not produce public debt projections.
  - Absence of a medium-term budget framework, medium-term debt strategy, and comprehensive medium-term macroeconomic framework.
  - Data and capacity constraints prevent use of LIC DSF.
  - Communication barriers and high staff turnover.
- Tool choice:
  - DDT selected for its simplicity, consistency with LIC DSF when assumptions match, ability to modify for gross financing needs and MTDS analysis, and availability of documentation and the DDTx online course.
- Preparatory activities:
  - Participants invited to DDTx course on EdX; weekly virtual meetings; mission provided DDT technical note, manual, and derivations; successful participants received physical certificates.

### Scoping mission findings: institutions, roles, data, resources, and cooperation
- Institutional roles and current capabilities:
  - Ministry of Finance (MF):
    - External Debt Department coordinates external debt projections, debt service payments, and production of MTDS and LIC DSF; does not currently project public debt or produce DSAs.
    - DMFAS calculates future interest payments on existing debt; interest on new debt not currently projected.
    - Budget Directorate projects revenues and expenditures using unit elasticities for tax revenues; satellite model adjustments for wages (~5% by ministry/category/number of employees); public investment program used for capital expenditure profiling.
    - Treasury Department manages domestic financing; domestic debt weight around 5%; instruments: 4-, 13- and 26-week Treasury bills; aim to introduce 2-year Treasury bonds in 2024 with AFRITAC West support.
  - Ministry of Economy and Sustainable Development (MEDD):
    - Responsible for medium-term macroeconomic framework; no operational comprehensive tool.
    - Simplified IMF FPP-style model exists but is not operational; lacks intersectoral links and gas sector; resumed development in November 2022; last meeting April 2023; MEDD requested ICD TA in December 2023 to develop a more comprehensive framework; TA scheduled to start towards the end of 2024.
  - Central Bank of Mauritania (BCM):
    - Produces Balance of Payments, inflation, and exchange rate projections; BOP statistics compiled per the IMF's Fifth Manual.
- Human resources and turnover:
  - MF: twelve economists.
  - MEDD: around six people for macro projections; technical staff lack formal training in macroeconomics and financial programming.
  - BCM: six people responsible for monitoring public debt.
  - High turnover, normal rotation for department heads ~ three years; recommendation to train a relatively large number to mitigate knowledge loss.
- Hardware/software:
  - All staff have computers and Excel licenses; core team lacks VBA experience; econometric software licenses limited but not required.
- Data and data management:
  - Most data required for DDT available; DMFAS used for debt data (central government debt, guaranteed loans, on-lending, grants, can track private non-guaranteed external debt).
  - Assumptions for extractive and non-extractive primary balances to come from Medium-Term Budgetary Programming Document.
  - Debt amortization and interest rate assumptions aligned with MTDS.
  - Absence of macroeconomic framework for GDP and inflation projections is a challenge.
  - Comprehensive data on other net debt-creating flows (e.g., contingent liabilities) are required.
  - No centralized macroeconomic and budgetary database; ongoing project to implement one; information exchanged by e-mail with Excel attachments.
- Inter-agency cooperation:
  - Operational tasks often carried out within committees; fragmentation of responsibilities results in committees handling tasks normally in administrative structures.
  - Cooperation not guaranteed by legislation but good collaborative spirit among CNDP member heads.

### Action plan: objectives, timetable, modalities, and core team
- Action plan agreed ad referendum on January 18, 2024 to develop, operate, and institutionalize a DDT tailored to Mauritania.
- Main project objectives:
  - (i) Train Mauritanian officials to carry out public debt projections and analysis by adapting the DDT.
  - (ii) Enable the Technical Committee supporting the CNDP to produce a basic public debt projection.
  - (iii) Assess effects of policy measures on debt dynamics and account for macroeconomic risks.
  - (iv) Customize the DDT with Mauritania-relevant features (examples: debt-stabilizing non-extractive primary balance, natural disaster scenarios such as drought and flood).
  - (v) Improve fiscal policy decision-making using debt analyses; produce a debt report with baseline and risk scenarios; illustrate uncertainty using a "fan chart"; prepare fiscal adjustment paths to achieve a debt-to-GDP target.
- Timetable:
  - TA scheduled for completion in one year; three missions agreed; provisional schedule: January 2024 to December 2024.
  - Milestones and Logical Framework with target dates to be regularly reviewed.
- Core team and modalities:
  - Core team: 24 officials (MF 11, MEDD 4, BCM 7, University 2), coordinated by Mr. Niang Idrissa.
  - Authorities committed full-time staff time during face-to-face and virtual missions; autonomous inter-mission work essential.
  - Communication via e-mail, Zoom, Microsoft Teams; Moodle platform to share materials; scheduled follow-ups and assigned responsibilities.
  - TA delivery model: hybrid face-to-face and virtual missions with periodic remote checks.

### Recommended tool and planned exercises
- DDT recommended because:
  - Country currently unable to consistently produce its own debt projections and lacks capacity to implement LIC DSF.
  - DDT can reproduce LIC-DSF public debt trajectory under same assumptions and includes tables showing main factors contributing to debt changes.
- Planned exercise:
  - Core team to produce a debt projection using World Economic Outlook macroeconomic assumptions and compare it to projection based on their own assumptions to highlight differences from assumption choices.
- Customizations planned include DDT GFN and ND-DDT (natural disaster tool).

### Risks and mitigation strategies
- Identified risks:
  - Potential mismatch between authorities’ expectations and project scope: TA limited to public debt projections and scenario/risk analysis; concern about quality of DDT projections in absence of a four-sector macroeconomic framework.
  - Lack of staff and high staff turnover; departments understaffed.
- Mitigation strategies:
  - Coordination with country team, SPR economist, and other IMF CD departments to assess how TA on macro frameworks can leverage momentum toward a consistent 4-sector framework.
  - Project timetable accounting for staff activity and vacation periods.
  - Develop a DDT user manual and expand core team to larger group to mitigate turnover risk.
  - Prioritize development of macroeconomic and fiscal analysis and forecasting practices to build know-how to use and modify existing tools.

### Appendices — selected substantive items, milestones, and participants
- Appendix A — Preliminary Action Plan (selected items):
  - Assessment and training mission: January 9-18, 2024 (review frameworks, diagnose capacities, provide hands-on DDT training, train on DDT GFN and ND DDT, agree ad referendum on action plan).
  - Work in between missions with virtual engagements: April to June 2024.
  - First mission: August 2024 (integrate customizations and produce public debt report).
  - Inter-mission virtual engagements: September 2024 (core team to develop documentation).
  - Second mission: October 2024 (explore policy options).
  - Closing meeting: Agreement of the Action Plan ad referendum on Friday, January 19.
- Appendix B — Results Framework (selected items):
  - Objective: Develop capacity in macroeconomic forecasting and policy analysis to support policy decision making and communications - MFR.
  - Outcome: Analytical models and forecasting tools are developed and operational.
  - Outcome indicator examples and targets:
    - Macroeconomic Projection Tool (MPT) developed in the form of DDT: Baseline Value: No; Target Value: Yes.
    - Relevant staff successfully completed agreed training: Baseline Value: 0; Target Value: 100.
  - Milestones (selected):
    - Core team finished asynchronous DDT training (EdX): Target Completion Date: 11/30/2023.
    - Core team able to produce baseline medium term Debt/GDP projection using DDT: Target Completion Date: 1/31/2024.
- Appendix C — Core team (selected entries):
  - MEDD: Didi Sid’ahmed; Mohamed Khlil.
  - MEF External debt and other MEF staff listed; BCM staff listed; University: Jemila Abdarrahmane; Bakary Gandega.
- Appendix D — Selected agenda highlights:
  - Training topics: debt dynamics and macroeconomic links; inputs for DDT; projection of debt-to-GDP ratios; debt dynamic equation; budgetary adjustment trajectories; realism and stress testing; alternative scenarios and fan charts; debt sustainability indicators and debt management; ND-DDT and DDT-GFN tools.

*Source: IMF | Mauritania Technical Assistance on Public Debt Projections — needs assessment and proposed action plan (section excerpts).*

### PREFACE __________________________________________________________________________ 5

### PREFACE

### Preface: mission overview and participants
- An evaluation and training technical assistance (TA) mission visited Nouakchott, Mauritania, from January 8 to 19, 2024 to take stock of status and capacity building needs in public debt projection at the Ministry of Finance (MF), the Ministry of Economy and Sustainable Development (MEDD) and the Central Bank of Mauritania (BCM).
- Mission objectives:
  - Review public debt projection frameworks and policy analysis tools used by MF, MEDD and BCM.
  - Strengthen public debt projection and analysis capacities.
- Mission team:
  - Ms. Marie-Pierre Aquino Coste (mission chief)
  - Mr. Naomitsu Yashiro (senior economist)
  - Mr. Oumar Dissou (debt management advisor at AFRITAC West)
- Main interlocutors included:
  - Mr. Mohamed Salem Nany, Director General of Financing and Economic Cooperation (MEDD)
  - Mr. Fall Khayar, Director General of Budget (MF)
  - Mr. Bouna Kerkoub, Director General of Studies and Monetary Stabilization (BCM)
  - Mr. Mohamed Lemine Memoune, Director General of Capital Markets (BCM)
  - Mr. Idrissa Niang, Director of External Debt (MF)
- The mission worked mainly with members of the Technical Committee supporting the National Committee on Public Debt (CNDP).

### Preface: report basis and acknowledgements
- The diagnosis is based on information available at the time of the visit in January 2024.
- Conclusions and recommendations represent the views and assessment of the IMF mission team and do not necessarily reflect those of the authorities.
- The mission presented its main recommendations and conclusions to senior officials of the MF, MEDD and BCM, including Mr. Saadbouh Regad, Acting Secretary General, and Mr. Yahya Sadvi H'meity, Director General of the Treasury and Public Accounting, and reached agreement ad referendum on an action plan and a results-based results framework.
- The final TA report will take account of the authorities' comments.
- Mission thanks and support acknowledgements:
  - Outstanding assistance from Mr. Niang Idrissa, Director of External Debt, and Mr. Houcein Mejdoub, Deputy Director of External Debt (MF).
  - Administrative and technical support from Ms. Irela Alemán Casco (ICDMF), Ms. María Sofía Anastasio (ICDMF) and Ms. Rebeca Hassan (ICDIP).
  - Invaluable support from the IMF Resident Representative, Ms. Anta Ndoye, and her office staff.

### Summary: purpose, institutional context, and agreed plan
- Purpose:
  - Assess authorities' capacity to project public debt and capacity development needs of institutions involved in public debt projection.
  - Strengthen capabilities for public debt projections.
- CNDP description:
  - An inter-agency group comprised of six directors general from MF, MEDD, and BCM involved in debt management.
  - Responsibilities: coordinate debt management policy formulation and implementation; advise Minister of Finance on debt sustainability and restructuring; facilitate information sharing; supported by a technical committee to publish debt statistics and produce public debt projections and debt sustainability analysis.
- Key findings on capacity:
  - CNDP and its Technical Committee lack tools to produce coherent public debt projections and lack an appropriate framework for macroeconomic projections and macro-fiscal policy assessment.
  - Staffing constraints in the CNDP Technical Committee limit development capacity for public debt projections.
- Agreed TA plan (ad referendum):
  - Implement technical assistance enabling authorities to make public debt projections using ICD's Public Debt Dynamics Tool (DDT).
  - Establishment of a core team led by Mr. Niang Idrissa, Director of External Debt, MF.
  - Program features:
    - Initial training on public debt projections to use the DDT, adapted to the Mauritanian economy, under ICD staff guidance.
    - Operationalization of the DDT and design of customized shocks that reflect the nature of the Mauritanian economy.
    - Institutionalization of public debt projections (e.g., as a public debt report attached to the budget).
    - A program of two missions combining remote and in-person training, frequent virtual engagements over a one-year period.
  - Expected completion: December 2024.
  - Expected outcomes and result indicators summarized in the results framework (Annex B).

### Section I. Background information — A. Mauritania’s Macro-Fiscal Context
- Country vulnerabilities and shocks:
  - Mauritania is a low-income country highly exposed to fluctuations in commodity prices and natural disasters.
  - The Russian-Ukrainian war led to a surge in food prices and food insecurity for 20% of the population.
  - Rising international food and energy prices and falling iron ore prices contributed to a widening trade deficit and falling foreign exchange reserves in 2022.
  - Frequent and severe climate-related natural disasters require substantial adaptation measures.
- Policy responses and IMF support:
  - Mauritania obtained an Extended Credit Facility and Extended Fund Facility of $86.9 million from the IMF in February 2022.
  - One main objective of the IMF program is to improve medium-term fiscal policy to ensure fiscal sustainability.
  - In December 2023, Mauritania acceded to the Resilience and Sustainability Facility (RSF), obtaining $258.21 million to finance investments in climate change adaptation and green transformation.
- Macro performance and outlook:
  - Real GDP growth:
    - 2022: 6.4%
    - 2023: likely slowed to around 4%
  - Inflation:
    - October 2022 peak: 12.7%
    - By September 2023: 3% year-on-year
  - Foreign currency liquidity reserves: stabilized at 6.4 months of non-extractive imports by 2023.
  - Growth drivers: increased iron ore production and commissioning of the new offshore gas station in 2024.
  - Risks: geopolitical tensions, natural disasters, delays in natural gas extraction at the Greater Tortue Ahmeyim (GTA) station.
  - Political context: presidential elections scheduled for June 2024.
- Debt situation:
  - Risk of debt distress improved from "high" to "moderate", mainly due to renegotiation of the US$300 million loan from Saudi Arabia on concessional terms.
  - Public debt currently estimated at around 47% of GDP and set to decline thanks to improved fiscal performance in 2023.
  - Authorities reactivated the CNDP in 2022 and requested IMF technical assistance for capacity building in public debt projections.
  - Authorities lack capacity or data to produce their own Debt Sustainability Analysis (DSF).
  - Ongoing IMF TA also supports medium-term debt management strategy and a medium-term fiscal framework.

### Section I. Background information — B. The Authorities’ Technical Assistance Request
- Request and early coordination:
  - MF requested ICD technical assistance to strengthen CNDP public debt projection and analysis capacity to improve inter-institution communication on debt policy.
  - Virtual meeting between ICD team and Mr. Niang Idrissa on September 15, 2023 to form an inter-agency team for public debt projections using the DDT.
  - Agreement to conduct a mission to Nouakchott for assessment and face-to-face workshop.
- Preparatory engagements:
  - Initial meetings informed a questionnaire to identify relevant staff and institutions.
  - Virtual coordination meeting with Mr. Niang Idrissa between October 4 and 6, 2023; decision that the core team would undergo online DDTx training on EdX (French).
  - Virtual scoping meeting on November 8, 2023 with Managing Directors of MF, MEDD and BCM to understand practices, assess team capacity, secure stakeholder support, and discuss a preliminary action plan.
  - Detailed questionnaire shared in November 2023; follow-up meeting in December 2023 to clarify responses.
  - Information from these engagements informed the action plan.
- Inter-departmental collaboration:
  - Mission collaborated with other IMF departments working on surveillance and TA to Mauritania, including:
    - SPR economist for Mauritania, Mr. Benjamin Kett.
    - AFRITAC West Macro-Fiscal Advisor in FAD, Mr. Djoret Biaka.
    - Mr. Oumar Dissou, Debt Management Advisor at AFRITAC West (MCM), joined the mission.

### Section II. Virtual preliminary training
- Working group composition:
  - Core working group comprised officials from MF, MEDD and BCM.
  - Invitations extended to: twelve officials from three MF directorates, three MEDD officials, six BCM officials and two members of academia.
  - Majority of participants are members of the CNDP Technical Committee.
- Capacity constraints identified:
  - MF's External Debt Department does not currently produce public debt projections.
  - Absence of a medium-term budget framework, medium-term debt strategy, and comprehensive medium-term macroeconomic framework.
  - Data availability and capacity constraints prevent use of the LIC DSF to project public debt or carry out a debt sustainability assessment.
  - Communication barriers across public administration and high staff turnover underscore the need for sustainable capacity.
- Choice of tool and rationale:
  - Agreed to develop public debt projection and analysis capacities using the DDT tool.
  - Reasons:
    - Simplicity and consistency with LIC DSF projections when assumptions match.
    - Ability to modify the DDT to project gross financing needs and assist with medium-term debt management strategy analysis.
    - Comprehensive documentation and an online course (DDTx) facilitate training of new staff and sustainable capacity building.
- Preparatory training activities:
  - Participants invited to register for the online DDTx course on EdX (French) and review risk and alternative scenarios in the DDT.
  - Weekly virtual meetings organized to monitor progress and answer questions.
  - Mission provided additional documents: DDT technical note and manual, full derivation of the debt dynamics equation, and derivation of factors contributing to debt variations.
  - Participants who completed the online course satisfactorily received physical certificates.

### Section III. Scoping mission findings and conclusions — A. Introduction
- Scoping mission design and timing:
  - Design of the project and action plan based on scoping mission and pre-scoping virtual engagements.
  - A 10-day scoping and training mission completed on January 19, 2024.
  - Information from questionnaires, discussions, and feedback informed the draft action plan (see Appendix D for scoping mission agenda).
- Purpose of this section:
  - Summarizes the mission's main findings and additional contributions drawn from the scoping mission and preparatory engagements.

*IMF | Mauritania Technical Assistance on Public Debt Projections*

### 13.      The needs assessment focused on the public debt projection and policy formulation

### 13.      The needs assessment focused on the public debt projection and policy formulation process of the administrative structures that make up the CNDP, namely the MF, the MEDD and the BCM.

### Needs assessment and institutional engagement
- Mission met with senior executives and technical staff of:
  - Directorate General of Budget and Directorate General of Treasury (MF structures);
  - Directorate General of Financing and Economic Cooperation and Directorate General of Development Strategy and Policies (MEDD);
  - Directorate General of Monetary Studies and Stabilization and Directorate General of Financial Stability and Financing (BCM).
- Two student researchers from the University of Nouakchott participated.
- Mission also met most members preparing the debt sustainability analysis and debt management strategy from MF, MEDD and BCM.

### Role and structure of the CNDP
- CNDP reactivated in 2022; an inter-agency committee comprised of six directors general from MF, MEDD, and BCM involved in debt management.
- CNDP responsibilities include:
  - coordinating the formulation of debt management policy;
  - advising the Minister of Finance on debt sustainability;
  - devising a debt management strategy for medium- and long-term sustainability;
  - handling debt restructuring and facilitating information sharing between institutions;
  - projecting medium-term macroeconomic and budgetary developments with underlying assumptions and assessing feasibility in the wider macroeconomic context.
- CNDP can address operational issues with strategic implications (e.g., advising on terms and conditions of new loans, formulating renegotiation policy with assumptions such as debt rescheduling and conversions).

### Technical Committee (TC) supporting the CNDP
- TC is headed by the Director of External Debt.
- TC responsibilities:
  - preparing public debt projections and producing the debt sustainability analysis;
  - overseeing preparation of the medium-term public debt management strategy (MTDS), the annual financing plan, the debt sustainability analysis report, and development of the public securities market;
  - advising on debt ceilings, terms and conditions of new external financing proposals, guarantee requests, and debt restructuring/renegotiation;
  - disseminating information on public debt and preparing the CNDP's operating budget;
  - convening extraordinary CNDP sessions if necessary.

### Responsibilities and outcomes of the Technical Assistance (TA)
- Main beneficiary: the TC supporting the CNDP.
- Current TC limitations:
  - does not have the skills to project public debt in a consistent manner;
  - does not have capacity to conduct a public debt sustainability analysis using the LIC DSF framework.
- Authorities intend to use the DDT tool as an intermediate step toward a full debt sustainability assessment.
- TA aims:
  - strengthen capacity to draw up public debt projections;
  - train a multidisciplinary team to carry out in-depth analyses and sustain the task.

### Capacity building scope and institutional coverage
- TA builds capacity across MF, MEDD, and BCM by strengthening the TC.
- Specific institutional roles and current capabilities:
  - Ministry of Finance (MF)
    - External Debt Department coordinates external debt projections, debt service payments, and production of the MTDS and LIC DSF; produces analyses of debt dynamics and debt evolution factors.
    - DMFAS calculates future interest payments on existing debt; interest payments on new debt are not currently projected.
    - MF does not currently have capacity to project public debt or produce debt sustainability analysis.
    - Budget Directorate coordinates the medium-term budgetary framework; projects public revenues, current and capital expenditure, and extractive and non-extractive primary balance.
      - To project tax revenues, unit elasticities are used.
      - To project current expenditure, a satellite model adjusts public wages by around 5% by ministry, category, and number of employees.
      - For capital expenditure, the public investment program is monitored to establish an annual project execution profile.
    - Treasury Department manages domestic component of annual financing plan.
      - Weight of domestic debt in total debt has only been around 5%.
      - Domestic debt instruments: government securities limited to 4-, 13- and 26-week Treasury bills.
      - With support of AFRITAC West debt management advisor, authorities aim to introduce 2-year Treasury bonds into the issuance program in 2024.
  - Ministry of Economy and Sustainable Development (MEDD)
    - Responsible for producing the medium-term macroeconomic framework.
    - No operational tool currently; has worked with AFRITAC West to develop a simplified IMF FPP-style model based on 4-sector accounting, but the model is not operational (lacks intersectoral links and the gas sector; does not include behavioral equations).
    - Model development interrupted in 2020 due to COVID-19; resumed November 2022; last meeting April 2023; review workshop scheduled for January 2024.
    - MEDD requested ICD technical assistance in December 2023 to develop a more comprehensive macroeconomic framework; TA scheduled to start towards the end of 2024.
  - Central Bank of Mauritania (BCM)
    - Produces projections of Balance of Payments accounts, inflation, and exchange rate assumptions.
    - Balance of payments statistics compiled in accordance with the IMF's Fifth Balance of Payments and International Investment Position Manual.

### Human and material resources
- Staff counts and capacities:
  - MF currently has twelve economists.
  - MEDD employs around six people to carry out macroeconomic projections and prepare the medium-term macroeconomic framework.
    - Technical staff have not received formal training in macroeconomics and financial programming.
  - BCM employs six people specifically responsible for monitoring public debt.
- Staff turnover:
  - High turnover, especially at MF and MEDD.
  - Normal rotation period for department heads is around three years.
  - Recommendation: train a relatively large number of participants to mitigate knowledge loss from staff turnover.
- Hardware and software:
  - All staff have access to computers and Excel licenses.
  - Core team has no VBA experience.
  - Licenses for econometric software packages are limited and not required for this project.

### Data, data management, and inputs
- Data availability:
  - Most data required for DDT projection is available.
  - DMFAS used for internal and external public debt data; tracks central government debt, guaranteed loans, on-lending loans, grants, and can track private non-guaranteed external debt.
  - Assumptions for extractive primary balance and non-extractive primary balance will be taken from the Medium-Term Budgetary Programming Document.
  - Assumptions for debt amortization and interest rates on external and domestic debt will be identical to those in the MTDS.
  - Absence of a macroeconomic framework for GDP and inflation projections is a challenge for reliable medium-term debt projection.
  - Comprehensive data on other net debt-creating flows (e.g., contingent liabilities) is required for reliable debt projection.
- Data management:
  - None of the institutions has a centralized macroeconomic and budgetary database.
  - Ongoing project to implement a centralized database to facilitate macroeconomic projections.
  - Current information exchange by e-mail with Excel attachments.

### Inter-agency cooperation
- Operational tasks for macroeconomic and debt projections are mostly carried out within committees, mitigating information-sharing difficulties.
- Fragmentation of responsibilities for macro-fiscal and debt policy functions leads to committees performing tasks normally within administrative structures.
- Inter-agency cooperation not guaranteed by legislation but there is a good spirit of cooperation among CNDP member structure heads.
- Data contributors share required information with other members to carry out Committee tasks.

### Action plan: objectives, timetable, and modalities
- Agreement ad referendum reached on January 18, 2024 on a preliminary action plan to develop, operate and institutionalize the DDT tailored to Mauritania.
- Action plan aims include:
  - developing institutional capacity in public debt analysis and projections by adapting, documenting, updating, modifying, and exploiting the DDT based on ICD's DDT;
  - defining outputs, timetable and institutional changes needed to establish a policy analysis system based on the tool for CNDP.
- Main project objectives (paragraph 32):
  - (i) train Mauritanian officials to carry out public debt projections and analysis by adapting the DDT;
  - (ii) enable the TC supporting the CNDP to produce a basic public debt projection;
  - (iii) assess effects of policy measures on debt dynamics and account for macroeconomic risks;
  - (iv) customize the DDT with features relevant to Mauritania (examples: debt-stabilizing non-extractive primary balance, natural disaster scenarios such as drought and flood);
  - (v) improve fiscal policy decision-making using debt analyses, produce a debt report with baseline and risk scenarios, illustrate uncertainty using a "fan chart", and prepare fiscal adjustment paths to achieve a debt-to-GDP target.
- Timetable:
  - TA scheduled for completion in one year.
  - Three missions have been agreed.
  - Provisional schedule runs from January 2024 to December 2024.
  - Action plan includes milestones, will be regularly reviewed and updated; Logical Framework provides roadmap and critical milestones with target dates.

### Core team, modalities, and training
- Core team from MF, MEDD and BCM to adapt the DDT with technical assistance from ICD.
- Authorities committed to allocating full-time staff time to the core team during face-to-face and virtual missions and follow-up engagements.
- Autonomous work and training of the core team between assignments essential to meet objectives.
- Working team composition:
  - 24 officials: MF 11, MEDD 4, BCM 7 and university 2 staff, coordinated by Mr. Niang Idrissa.
  - Ad-hoc members to be included for certain training sessions.
- Communication and knowledge-sharing methods:
  - list of e-mail addresses and online platforms (Zoom and Microsoft Teams);
  - use of Moodle platform to share materials, projection data and relevant information;
  - scheduled follow-up meetings; responsibilities assigned and reviewed throughout the project to ensure commitment and ownership.
- TA delivery model:
  - hybrid model of face-to-face and virtual missions;
  - periodic remote checks by mission team and inter-mission work by authorities.

### Recommended tool: the DDT
- DDT recommended as the appropriate tool to meet institutional needs.
- Rationale:
  - Country currently unable to consistently produce its own debt projections;
  - Lack of data and capacity to implement LIC DSF;
  - Absence of comprehensive 4-sector macroeconomic framework with cross-sectoral consistency.
- Advantages of DDT:
  - Can reproduce public debt trajectory produced by the LIC-DSF under same assumptions;
  - Includes tables to show main factors contributing to debt changes, supporting improved communication with the IMF within program dialogue.
- Planned exercise:
  - Core team will produce a debt projection using World Economic Outlook macroeconomic assumptions and compare it to projection based on their own assumptions to highlight differences arising from assumption choices.

*Source: IMF | Mauritania Technical Assistance on Public Debt Projections — needs assessment and proposed action plan (section excerpts).*

### 39.      Risks Associated with the Project and Mitigation Strategies. This project is subject to certain

### 39. Risks Associated with the Project and Mitigation Strategies

### Identified risks
- A potential mismatch between expectations and project objectives:
  - Scope limitation: The technical assistance (TA) project is limited to public debt projections and scenario/risk analysis.
  - Concern: In the absence of a four-sector macroeconomic framework in Mauritania, the authorities have expressed concern about the quality of public debt projections derived from the DDT, given a potential lack of cross-sectoral consistency in the underlying assumptions and data used.
- Lack of staff and staff turnover:
  - Departments and agencies are understaffed, and staff turnover appears to be high.

### Mitigation strategies
- For the mismatch between expectations and objectives:
  - The TA team shares the authorities’ concern.
  - Coordination: The TA team is working closely with the country team and the SPR economist in charge of the Area Department's macroeconomic framework, as well as with other IMF CD departments.
  - Objective: Assess how TA on macroeconomic frameworks can leverage current momentum to move towards development and implementation of a consistent 4-sector macroeconomic framework in Mauritania.
- For lack of staff and staff turnover:
  - Project timetable: Designed to take into account periods of staff activity and vacation periods.
  - Documentation and capacity: Mitigate turnover risk by helping the core team develop a DDT user manual (paragraph 26) and by expanding the core team to a larger group of staff to ensure sustainability.
  - Prioritization: Development of macroeconomic and fiscal analysis and forecasting practices capable of providing the know-how to understand, use, and modify existing tools should be a priority.

### Appendix A — Preliminary Action Plan (selected substantive items)
- The assessment and training mission: January 9-18, 2024
  - Review the current framework and procedures for projecting public debt.
  - Diagnose technical capacities of relevant staff at the Ministry of Finance, the Ministry of Economy, and the Central Bank of Mauritania; assess training needs; inventory software and hardware; evaluate databases and data management processes; map main information channels.
  - Provide hands-on training on the public debt dynamics tool (DDT) to produce basic public debt projections.
  - Provide hands-on training on the DDT with gross financing needs (DDT GFN) and the natural disaster tool for DDT (ND DDT) to broaden analysis to debt burden indicators and climate-related risk scenarios and disasters.
  - Based on conclusions, agree ad referendum on an action plan and results framework (drafts included in Appendix I).
  - Deliver an aide-mémoire (AM) containing main conclusions and recommendations, including the agreed action plan and results framework.
- Work in between missions with virtual engagements: April to June 2024
- The first mission: August 2024
  - Integrate customizations and produce a report on public debt.
- Work in between missions with virtual engagements: September 2024
  - The core team will develop documentation on the proposed tool.
- The second mission: October 2024
  - The core team will explore policy options that can be tested and integrated into policy scenarios.

### Appendix B — Results Framework (selected substantive items)
- Objective:
  - Develop capacity in macroeconomic forecasting and policy analysis to support policy decision making and communications - MFR
- Outcome:
  - Analytical models and forecasting tools are developed and operational
  - Annual Assessment Rating:
  - Outcome Rating Date: 5/30/2023
- Outcome indicator examples and target values:
  - Macroeconomic Projection Tool (MPT) is developed in the form of a fiscal/debt sustainability tool, e.g. public Debt Dynamic Tool (DDT)
    - Baseline Value: No
    - Target Value: Yes
  - Relevant staff have successfully completed agreed training delivered via various modalities (online, classroom courses, workshops)
    - Baseline Value: 0
    - Target Value: 100
- Milestones (selected):
  - Core team finished asynchronous training of the DDT (through EdX) with virtual follow-ups.
    - Target Completion Date: 11/30/2023
  - Core team is able to produce baseline medium term projections of the Debt/GDP path using the DDT.
    - Target Completion Date: 1/31/2024
- Outcome (improved analytical skills and forecasting capacity):
  - Annual Assessment Rating:
  - Outcome Rating Date: 10/3/2023

### Appendix C — Core team (selected entries)
- MEDD: Didi Sid’ahmed; Mohamed Khlil
- MEF: External debt: Sarre Adama Souleymane; Mohamed Yahya Cheikh Mohamed El Mokhtar; Mohamed Abad Yah; Youssouf Cheikh Sidiya; Houcein Mejdoub; Niang Idrissa
- MEF: Budget: Bacar Khayar; Abidine Sid’ahmed Khouah; Moulaye Ahmed Lella; Taleb Dahmane
- MEF: Treasury: Fatma Abdelkader; Mariem Zeidane
- BCM: Baham Ahmed Benane; Sarra Mohamed Cheikh Sidiya; Sidi Lemrabott; Mohamed El Yezid; El Hadj Cheikh-Abdallahi; El Hacen Teyeb
- University of Nouakchott: Jemila Abdarrahmane; Bakary Gandega

### Appendix D — Selected agenda highlights (TA Mission on Public Debt Projections and Analysis)
- TA mission dates listed as January 8-18, 2023 in the Preliminary Agenda.
- Training and workshop sessions covered:
  - Dynamics of public debt and links with macroeconomic frameworks
  - Obtaining/calculating input data necessary for the DDT
  - Projection of debt to GDP ratios; the debt dynamic equation; using the DDT to project public debt
  - Budgetary adjustment trajectories; timing, magnitude, composition, and implementation of budgetary adjustment
  - Realism and stress testing of the basic dynamics of public debt; alternative scenarios and stress tests; fan charts
  - Debt sustainability indicators and debt distress risk; debt management
  - Tool for projecting public debt dynamics in the face of natural disasters (ND-DDT)
  - Tool for projecting public debt dynamics with gross financing needs (DDT-GFN)
- Closing meeting: Agreement of the Action Plan ad referendum on Friday, January 19

*IMF | Mauritania Technical Assistance on Public Debt Projections — excerpt: “39. Risks Associated with the Project and Mitigation Strategies.”*

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_Source: https://www.imf.org/-/media/files/publications/tar/2024/english/tarea2024089-print-pdf.pdf_