Mauritania obtains US$163.9m credit facility from IMF

07 Décembre 2017

Nouakchott, Mauritania, December 7 (Infosplusgabon) - Mauritania has secured US$163.9 million in support for economic and financial reform from the International Monetary Fund (IMF) under the Fund’s  three-year Extended Credit Facility (ECF), it was disclosed in Nouakchott on Thursday.

The IMF Executive Board’s decision on Wednesday enables immediate disbursement of US$23.4 million to Mauritania.

According to an IMF statement made available to Infosplusgabon, the ECF-supported programme is expected to help Mauritania economy foster inclusive and diversified growth to improve the population’s living standards, maintain macroeconomic stability, strengthen debt sustainability, and reduce poverty.

The Board said that the remaining amount would be phased in over the duration of the programme, subject to semi-annual reviews.

Following the Board’s discussion on Mauritania, IMF Deputy Managing Director and Acting Chair, Mr. Mitsuhiro Furusawa, said: “Mauritania is addressing decisively the aftermath of a terms-of-trade shock that slowed growth and widened imbalances.

“The authorities’ policy adjustment efforts succeeded in restoring macroeconomic stability and stabilising debt levels, while growth rebounded. The authorities also prepared a long-term inclusive growth strategy, including structural reforms and infrastructure investment, to support diversification, job creation, and poverty reduction.”

Mauritania’s ECF-supported programme aims to address the challenges of economic growth, stability, sustainability, poverty and catalyze external financing.

Being a commodity exporter, the country continues to face the challenge of low and volatile metal prices which slowed growth and widened imbalances.

Following the sharp drop in iron ore prices in 2014–15 which halved export revenues, widened imbalances, and exposed financial vulnerabilities, the Mauritanian authorities cut the budget deficit significantly, allowed the exchange rate to depreciate, and mobilized foreign grants and loans.

These efforts succeeded in restoring macroeconomic stability and levelling off debt to 69 percent of GDP, while growth rebounded to an estimated 1.6 percent in 2016 and 3.1 percent in 2017, and inflation remained subdued at 0.8 percent in October.

“The authorities’ programme appropriately addresses Mauritania’s macroeconomic and structural challenges. The programme aims to support the nascent recovery, diversify the economy, and meet infrastructure needs while maintaining macroeconomic stability, increasing resilience to shocks, and strengthening debt sustainability,” Mr. Furusawa noted.

“Strong political commitment, ownership and steadfast implementation of the Fund-supported programme will be needed for success,” he added, encouraging the authorities to advance implementation of planned tax policy and administration reforms and control current spending.

Given Mauritania’s high public debt ratio, Mr. Furusawa said that they should also limit non-concessional borrowing and strengthen debt management to set the debt-to-GDP ratio on a clear downward trajectory.

FIN/INFOSPLUSGABON/MPO/GABON 2017

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