Press Release: IMF Executive Board Completes First Review Under ECF Arrangement for Mauritania and Approves US$17 Million Disbursement
November 19, 2010Press Release No. 10/447
November 19, 2010
The Executive Board of the International Monetary Fund (IMF) completed its first review of Mauritania’s economic performance under a program supported by the Extended Credit Facility1 arrangement (ECF). The decision enables Mauritania to draw an additional SDR 11 million (US$17 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 22 million (US$34 million). The Board's decision was taken on a lapse of time basis.
The Executive Board approved a three-year arrangement for Mauritania in March 2010 in an amount of SDR 77.28 million, equivalent to 120 percent of the country’s quota in the IMF (See Press Release No. 10/89).
Mauritania’s economy is recovering after the 2009 recession triggered by the global economic slowdown. Economic activity has picked up, credit to the private sector has strengthened, and fiscal and external balances are improving. Consumer price inflation has increased in recent months, driven by higher energy and food prices, but remained in the low single digits. The outlook for 2010 and 2011 remains favorable on the back of a rebound in prices for Mauritania’s main exports.
The draft 2011 budget preserves fiscal discipline and appropriately protects infrastructures and social spending. Efforts are underway to further strengthen the tax and customs administration, accelerate public service reform to contain the wage bill, and restrain and prioritize other current spending. It is also important to improve budget formulation, execution and reporting, and enhance the quality of public spending.
The structural program continues to focus on improving the business climate and promoting private sector-led growth. Reforms are essential to further enhance financial intermediation, put major public enterprises on a sound financial footing, improve governance, and take steps to facilitate private sector investment.
Successful program execution will help strengthen the country’s resilience to external shocks, improve the country’s prospects for mobilizing external support, sustain economic growth, create jobs, and reduce poverty.
1 The Extended Credit Facility (ECF) has replaced the Poverty Reduction and Growth Facility (PRGF) as the Fund’s main tool for medium-term financial support to low-income countries by providing a higher level of access to financing, more concessional terms, enhanced flexibility in program design features, and more focused streamlined conditionality. Financing under the ECF carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years (http://www.imf.org/external/np/exr/facts/ecf.htm). The Fund reviews the level of interest rates for all concessional facilities every two years. The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.