Press Release No. 06/92

Press Release: Statement by the IMF Mission to Mauritania

May 10, 2006

The following statement was issued on May 8, 2006 by the International Monetary Fund's (IMF) staff mission in Nouakchott, Mauritania:

"A mission of the International Monetary Fund led by Jean Le Dem, the mission chief for Mauritania in the Middle East and Central Asia Department, visited Mauritania during April 25-May 8, 2006. The purpose of the mission was three-fold: conduct the 2006 Article IV consultation discussions; assess the implementation of the economic and financial program during the period of January 1-June 30, 2006, at the request of the authorities; and assess, in collaboration with World Bank staff, the progress achieved in implementing the corrective measures needed for Mauritania to qualify for debt relief under the Multilateral Debt Relief Initiative (see Press Release No. 05/308).

"The mission observed that the transition government moved forward on the path towards transparency, restoration of economic stability, and reforms. The Poverty Reduction Strategy is being updated.

"During the first quarter of the Staff Monitored Program (SMP), budget discipline and a prudent monetary policy resulted in the quantitative targets set for end-March being met, indicating that the macroeconomic stabilization initiated by the transition government is being confirmed. However, there is a need to remain vigilant, in particular to prevent the increase in prices observed in March and April from causing a return to inflationary expectations. The structural measures taken during the first four months of the SMP will make available better economic and financial information and better monitoring of the public finances, including poverty reducing expenditures.

"The efforts undertaken to improve transparency included important work to revise and analyze macroeconomic and financial data over the period 1992-2004. This was necessary to correct the systematic errors that plagued the official statistics. The recently established National Council for Statistics has been given the responsibility to vet this work, which should be ready for publication in June 2006. In addition, the setting up of the institutional framework aiming to guarantee the transparency and good management of the fast-increasing revenue the government is receiving from the petroleum and mining sectors is continuing. In addition to the implementation of the Extractive Industry Transparency Initiative, this framework includes a National Hydrocarbon Revenue Fund, which will centralize the petroleum revenue of the State and should be operational shortly. The government expressed its intention to initiate an in-depth review and a public consultation on the preparation of a law for the optimal management of the petroleum revenue.

"On December 21, 2005, the Executive Board of the International Monetary Fund decided that Mauritania could qualify for relief under the MDRI after certain remedial actions are taken. In addition to sound macroeconomic policies over a period of six months, these would include actions in the areas of budget formulation, execution, and reporting, and the resolution of data issues. Progress to date suggests that the Executive Board will be in a position to reassess Mauritania's qualification under this initiative in the second half of June 2006."