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IMF Executive Board Completes Fourth Review of the Arrangement Under the Extended Credit Facility with the Islamic Republic of Mauritania, Approves US$22.8 Million Disbursement

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.

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.”


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