IMF Executive Board Completes Third Review of the Arrangement Under the Extended Credit Facility with the Islamic Republic of Mauritania
IMF News, May 20, 2019
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- Published: May 20, 2019
Program performance and review outcome
- On May 20, 2019, the Executive Board completed the third review of the three-year arrangement with Mauritania under the Extended Credit Facility.
- The arrangement has total access of SDR 115.92 million (about US$ 159.8 million at current exchange rates), or 90 percent of Mauritania’s quota.
- The completion of the review allows the authorities to draw SDR 16.56 million (about US$ 22.8 million), bringing total disbursements to SDR 66.24 million (about US$ 91.3 million).
- IMF assessment: “Mauritania’s performance under the Extended Credit Facility Arrangement continues to be strong. Macroeconomic stability has been maintained, external debt-to-GDP declined, official reserves increased, and some fiscal space has been created. Structural reform implementation progressed as planned.” — Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair.
Growth, outlook, and risks
- Economic growth:
- Real GDP: 2018 est. 3.6 percent; 2019 proj. 6.7 percent; 2020 proj. 5.8 percent.
- Real extractive GDP: 2018 est. -18.7 percent; 2019 proj. 20.6 percent; 2020 proj. 6.3 percent.
- Real non-extractive GDP: 2018 est. 5.4 percent; 2019 proj. (value missing in table for 2019 row header) (table shows non-extractive GDP series: 2015 1.4, 2016 2.0, 2017 4.5, 2018 5.4).
- Price developments:
- GDP deflator: 2018 5.3 percent.
- Consumer prices (period average): 2018 4.0 percent.
- Outlook drivers: improved terms of trade and the upcoming development of a large offshore gas field.
- Downside risks: global economic developments, commodity price volatility, adverse weather, and regional security concerns remain elevated.
Policy objectives and structural reforms
- Program aims:
- Entrench macroeconomic stability.
- Support inclusive and job-creating growth.
- Build international reserve buffers.
- Authorities’ stated fiscal intent:
- Use prospective fiscal space prudently for priority social spending—education, health, and social protection—and public infrastructure.
- Seek financing on concessional terms to improve debt sustainability.
- Structural reform priorities:
- Strengthen tax policy and administration to ensure broad-based tax compliance.
- Reform budget processes to improve the effectiveness of public spending.
- Modernize the foreign exchange policy framework and increase exchange rate flexibility to address external shocks and preserve official reserves.
- Activate new monetary policy instruments to improve liquidity management.
- Upgrade bank regulatory standards and supervision to strengthen banking sector soundness and financial inclusion.
- Establish a robust macro-fiscal framework to efficiently manage future windfall gas revenues.
- Governance recommendation: Step up efforts to improve the business environment, strengthen economic governance, and fight corruption.
Fiscal, debt, and monetary key statistics (selected)
- Central government operations (in percent of non-extractive GDP):
- Revenues and grants: 2018 33.6; 2019 30.5; 2020 31.2.
- Non-extractive revenues: 2018 27.5; 2019 27.7.
- Taxes: 2018 20.8; 2019 20.4; 2020 20.7.
- Extractive revenues: 2018 2.2; 2019 2.6.
- Grants: 2018 0.9.
- Expenditure and net lending: 2018 30.0; 2019 30.6; 2020 30.7.
- Current expenditure: 2018 18.1; 2019 18.0.
- Capital expenditure: 2018 10.8; 2019 12.4; 2020 12.8.
- Primary balance (excl. grants): 2018 4.8.
- Overall balance (in percent of GDP): 2018 3.3.
- Public sector debt (in percent of GDP):
- 2015 75.2; 2016 77.4; 2017 75.9; 2018 83.0; 2019 78.5; 2020 80.9.
- Note: 1/ Including government debt to the central bank recognized in 2018. 2/ Excluding passive debt to Kuwait under negotiation.
- Money and credit (annual change in percent):
- Broad money: 2018 11.5; 2019 11.6.
- Credit to the private sector: 2018 19.2; 2019 13.5.
- Balance of payments:
- Current account balance (in percent of GDP): 2018 -18.4; 2019 -15.7; 2020 -21.6.
- Current account excl. externally financed extractive capital imports: 2018 -10.2; 2019 -12.9.
- External sector and reserves:
- Gross official reserves (in millions of US$, eop): 2018 919.1; 2019 1,010.6; 2020 1,133.8.
- In months of prospective non-extractive imports: 2018 5.0; 2019 5.2; 2020 5.7.
- External public debt (in millions of US$): 2018 3,631.8; 2019 3,784.0; 2020 4,046.4.
- External public debt (in percent of GDP): 2018 69.3; 2019 67.3; 2020 69.4.
- Memorandum items:
- Nominal GDP (in millions of US$): 2018 5,237.1; 2019 5,621.3; 2020 5,826.9.
- Price of iron ore (US$/Ton): 2018 70.1; 2019 76.5; 2020 70.2.
Implementation and next steps
- Continued policy discipline and broad-based structural reforms are envisaged to support program objectives.
- Authorities to prioritize social spending and public infrastructure while seeking concessional financing to safeguard debt sustainability.
- Emphasis on modernizing macroeconomic frameworks (fiscal, monetary, foreign exchange) and strengthening financial sector regulation and supervision.
Prepared from IMF Press Release No. 19/177 (May 20, 2019).