IMF Staff Reaches Staff Level Agreement on the third review for Mauritania’s Extended Credit Facility

IMF News, March 13, 2019

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Canonical URL: IMF Staff Reaches Staff Level Agreement on the third review for Mauritania’s Extended Credit Facility

IMF staff team led by Mr. Eric Mottu visited Nouakchott from February 27-March 13, 2019 to discuss the third review of the program supported by a three-year arrangement under the IMF’s Extended Credit Facility (ECF).
The ECF arrangement was approved by the IMF Executive Board on December 6, 2017 for a total amount of SDR 115.920 million (approximately US$161.2 million at current exchange rates).
IMF team and Mauritanian authorities reached a staff-level agreement on the third review. Completion of the review is subject to approval by the IMF’s Executive Board.
Mauritania will benefit from a fourth disbursement of SDR 16.56 million (around US$ 23.0 million) following the Executive Board’s review scheduled for May 2019.

Economic growth accelerated in 2018 to around 3.6 percent.
Non-extractive sectors grew over 6 percent in 2018.
Inflation averaged 3.1 percent in 2018.
International reserves of the central bank reached US$919 million at end-2018 (5 months of non-extractive imports).
The budget yielded a sizable surplus owing to strong tax revenue performance, large revenue from exploration licenses, and slower-than-expected execution of externally financed capital spending.
External public debt fell to 69 percent of GDP at end-2018.
The external current account deficit (excluding extractive sector capital imports) widened to around 11 percent of GDP due to rising imports.
The banking sector strengthened and debt accumulation slowed significantly.

Implementation of the authorities’ economic and financial program was assessed as satisfactory.
All performance criteria for end-December 2018 were met.
All structural benchmarks planned between December 2018 and March 2019 were or are in the process of being met.
Structural reforms related to:
- tax administration,
- monetary policy instruments,
- the foreign exchange market,
- the financial sector.

Outlook is described as favorable owing to sustained commodity prices, the launch of the offshore gas project, and continued policy implementation focused on macroeconomic stability, inclusive job-creating growth, and diversification.
Economic growth could exceed 6 percent in 2019 on the back of the expected recovery of extractive sectors and continued robust performance of non-extractive sectors.
Exogenous risks include commodity price volatility and uncertainties weighing on global growth.

Authorities’ program envisages:
- disciplined implementation of the budget in 2019,
- prudent borrowing (avoiding non-concessional borrowing),
- an increase in international reserves to improve debt sustainability and build buffers against exogenous shocks,
- creating fiscal space for social spending and infrastructure investment.
Authorities will establish a robust fiscal framework for prudent management of future gas revenues.
Authorities will gradually expand targeted social safety nets throughout the country.
Authorities will press ahead with reforms aimed at improving the business environment, strengthening economic governance, and fighting corruption.

IMF Communications Department press release, March 13, 2019.