On December 6, 2017, the Executive Board of the International Monetary Fund (IMF) approved a three-year arrangement under the Extended Credit Facility (ECF) with Mauritania for SDR 115.92 million (about US$ 163.9 million, or 90 percent of Mauritania’s quota) to support the country’s economic and financial reform program.
The ECF-supported program 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.
An amount of SDR 16.56 million (about US$ 23.4 million) will be made available immediately to Mauritania. The remaining amount will be phased in over the duration of the program, subject to semi-annual reviews.
Following the Executive Board discussion on Mauritania, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, 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 stabilizing 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.
“The authorities’ program appropriately addresses Mauritania’s macroeconomic and structural challenges. The program 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. It also seeks to reduce poverty, inequality and unemployment. Strong political commitment, ownership and steadfast implementation of the Fund-supported program will be needed for success.
“Building on the significant adjustment achieved, the authorities will continue with fiscal consolidation to restore debt sustainability while creating fiscal space for social and infrastructure spending through revenue mobilization, expenditure prioritization, and public investment management reforms. The authorities will advance implementation of planned tax policy and administration reforms and control current spending. Given the high public debt ratio, they will limit non-concessional borrowing and strengthen debt management to set the debt-to-GDP ratio on a clear downward trajectory.
“As part of the program, the monetary policy framework will be modernized and the central bank operational autonomy will be strengthened. A competitive foreign exchange market will be introduced to ensure regular access to foreign exchange, increase exchange rate flexibility and support growth.
“To address financial stability risks and support credit, the authorities will improve banking sector regulations and strengthen supervision. They will continue to improve the business climate and governance, and seek to expand the social safety net.”