IMF Executive Board Completes Sixth Review Under the Extended Credit Facility Arrangement with the Islamic Republic of Mauritania, Approves US$23.8 Million Disbursement

IMF News, March 3, 2021

Source details

Canonical URL: IMF Executive Board Completes Sixth Review Under the Extended Credit Facility Arrangement with the Islamic Republic of Mauritania, Approves US$23.8 Million Disbursement

The Executive Board completed the sixth and final review of the arrangement with the Islamic Republic of Mauritania under the Extended Credit Facility (ECF) covering 2017–21, allowing the disbursement of SDR 16.56 million (12.9 percent of quota, about US$23.8 million).
The arrangement was approved on December 6, 2017 with total access of SDR 115.92 million (about US$167 million at current exchange rates), or 90 percent of Mauritania’s quota.
The arrangement was augmented by SDR 20.24 million (15.7 percent of quota) on September 2, 2020 and was extended by three months on December 1, 2020.
Earlier, on April 23, 2020 the Executive Board approved a disbursement of SDR 95.68 million (74.3 percent of quota) under the Rapid Credit Facility (RCF).
Altogether, total access reached SDR 132.48 million (102.9 percent of quota) in 2020.
The Executive Board approved a waiver for the non-observance of the June 2020 performance criterion on net domestic assets of the central bank.
The authorities have requested a successor arrangement.

The COVID-19 pandemic continues to impose severe human and social hardships on Mauritania, and the economy contracted by about 2 percent in 2020.
The authorities responded swiftly to mitigate the impact of the pandemic while international partners provided sizable financing and debt service suspension.
High commodity exports, together with external support, have placed Mauritania in a stronger position to support the recovery.
Despite delays, program performance has been strong and the program has helped to:
- support growth,
- improve fiscal balances and stabilize debt,
- increase foreign exchange reserves,
- implement important institutional reforms in the fiscal, monetary, and financial sector policy areas.
The outlook remains highly uncertain and dependent on volatile commodity markets, with sizable downside risks in case new waves of the pandemic spill over.

The authorities’ response to the pandemic is characterized as appropriate.
The expansionary 2021 budget is described as justified to boost the recovery and longer-term inclusive growth, and could be supported by the external financing saved from last year.
Recommended priorities:
- Prioritize health and education spending and targeted support to the most vulnerable households.
- Step up infrastructure spending to support livelihoods and limit post-pandemic scarring.
- Continue prudent monetary policy and careful monitoring of banking sector developments.
- Channel crisis-related spending through the budget, report transparently on the use of emergency resources, publish the names and legal owners of companies awarded emergency contracts, commit to auditing emergency spending, and strengthen disclosure requirements on beneficial ownership.
Fiscal space and debt advice:
- Continue to create fiscal space to increase priority spending on education, health, social protection, and infrastructure by mobilizing domestic revenues and strengthening public financial management.
- Given the high risk of debt distress, authorities are encouraged to seek further grants and concessional resources to finance development plans, maintain buffers, and safeguard debt sustainability.

National accounts and prices (Annual change in percent; unless otherwise indicated)

Real GDP: 2017: 3.5; 2018: 2.1; 2019: 5.6; 2020 Est.: -2.2; 2021 Proj.: 3.1
Real extractive GDP: 2017: -6.2; 2018: -9.5; 2019: 27.2; 2020 Est.: 0.9; 2021 Proj.: 5.0
Real non-extractive GDP: 2017: 4.7; 2018: 3.2; 2019: -2.9; 2020 Est.: 2.5
GDP deflator: 2017: 3.7; 2018: 1.8; 2019: 9.6; 2020 Est.: 7.8; 2021 Proj.: 12.1
Consumer prices (period average): 2017: 2.3; 2018: 2.4

Central government operations (In percent of non-extractive GDP; unless otherwise indicated)

Revenues and grants: 2017: 22.8; 2018: 25.0; 2019: 24.4; 2020: 24.5
Nonextractive revenues: 2017: 20.0; 2018: 21.0; 2019: 20.5; 2020: 21.6; 2021 Proj.: 20.7
Taxes: 2017: 14.1; 2018: 15.5; 2019: 15.0; 2020: 14.3; 2021 Proj.: 15.1
Extractive: 2017: 2.0; 2018: 1.9; 2019: 2.8
Grants: 2017: 0.8; 2018: 0.5; 2019: 2.7; 2020: 0.6
Expenditure and net lending: 2017: 22.9; 2018: 22.3; 2019: 21.9; 2020: 28.2
Current expenditure: 2017: 14.0; 2018: 13.7; 2019: 15.8; 2020: 18.2
Capital expenditure: 2017: 8.7; 2018: 8.0; 2019: 8.3; 2020: 10.0
Primary balance (excl. grants): 2017: 0.2; 2018: 1.7; 2019: 1.3; 2020: -3.0
Overall balance (in percent of GDP): 2017: 0.0; 2018: -2.5

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

Money and Credit

Broad money: 2017: 13.8; 2018: 11.8; 2019: 14.9
Credit to the private sector: 2017: 7.5; 2018: 19.4; 2019: 12.9; 2020: 6.8; 2021 Proj.: 9.4

Balance of Payments

Current account balance (in percent of GDP): 2017: -10.0; 2018: -13.8; 2019: -10.5; 2020: -11.6; 2021 Proj.: -11.8
Excl. externally financed extractive capital imports: 2017: -5.0; 2018: -8.6; 2019: -3.8; 2020: -3.3; 2021 Proj.: -7.0
Gross official reserves (in millions of US$, eop) 3/: 2017: 849; 2018: 918; 2019: 1,135; 2020: 1,542; 2021 Proj.: 1,654
In months of prospective non-extractive imports: 2017: 4.6; 2018: 4.5; 2019: 5.7; 2020: 5.9; 2021 Proj.: 6.7
External public debt (in millions of US$) 2/: 2017: 3,573; 2018: 3,614; 2019: 3,776; 2020: 4,184; 2021 Proj.: 4,457
External public debt (In percent of GDP): 2017: 52.7; 2018: 51.3; 2019: 47.6; 2020: 51.2; 2021 Proj.: 48.2
Real effective exchange rate: 2017: -1.7; 2018: -0.3; 2019: …

Memorandum items:

Nominal GDP (in millions of US$): 2017: 6,784; 2018: 7,048; 2019: 7,930; 2020: 8,176; 2021 Proj.: 9,239
Price of iron ore (US$/Ton): 2017: 71.1; 2018: 70.1; 2019: 93.6; 2020: 108.1; 2021 Proj.: 152.6

Source: IMF Press Release No. 21/57, March 3, 2021; Mauritanian authorities; and IMF staff estimates and projections.