Via IMF (Den Internationale Valutafond)

On December 11, 2019, the Executive Board of the International Monetary
Fund (IMF) completed the fourth review of the three-year arrangement
with the Islamic Republic of Mauritania under the Extended Credit
Facility. The arrangement, with total access of SDR 115.92 million
(about US$ 159.6 million at current exchange rates), or 90 percent of
Mauritania’s quota, was approved on December 6, 2017 (see Press Release
No. 17/468). The completion of the review allows the authorities to
draw SDR 16.56 million (about US$ 22.8 million), bringing total
disbursements to SDR 82.80 million (about US$ 114.0 million).

In completing the review, the Executive Board also approved the
authorities’ request for a waiver for the non-observance of the
performance criterion on non-concessional borrowing. During the same
meeting, the Board also concluded the 2019 Article IV consultation. A
separate press release will be issued shortly.

Following the Executive Board discussion, Mr. Mitsuhiro Furusawa,
Deputy Managing Director and Acting Chair, made the following
statement:

“Mauritania’s performance under the Fund’s Extended Credit Facility
Arrangement continues to be strong. The authorities are implementing
prudent policies and advancing with reforms, albeit with some delays.
Growth is expected to accelerate this year, driven by buoyant activity
in both extractive and non-extractive sectors and favorable terms of
trade. While the economic outlook is positive, downside risks remain
elevated, owing to the global slowdown, commodity prices volatility,
and security threats in the Sahel. Continued policy discipline,
implementation of structural reforms, and increases in priority social
and infrastructure spending will be important for achieving more
inclusive growth and reducing poverty and inequality, while entrenching
macroeconomic stability and debt sustainability.

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The authorities should use the fiscal space to increase priority social
(education, health, and social protection) and infrastructure spending
while maintaining prudent fiscal and borrowing policies to preserve
debt sustainability. In this regard, it will be important to take
measures to increase domestic revenues and contain non-priority
spending. Establishing robust macro-fiscal and institutional frameworks
will be important to manage future gas revenues efficiently.

Operationalizing the new monetary policy framework and increasing
exchange rate flexibility should help address external shocks, preserve
official reserves, and support growth and competitiveness. The
authorities should also take further steps to improve banks’ soundness
and resilience to shocks to increase their ability to finance economic
growth and SMEs.

The authorities’ aim to strengthen institutions and policy frameworks
is welcome. Priorities include strengthening tax and customs
administration to ensure broad-based tax compliance, and reforming
budget processes to improve the capacity to efficiently expand social
spending given immense needs. In addition, stepping up efforts to
improve the business environment, economic governance, and the fight
against corruption will be key to foster diversified private sector
development and job creation.”