IMF Concludes Reviews of Extended Credit, Fund Facilities for Mauritania

• IMF staff and the Mauritanian authorities have reached a preliminary agreement to complete the second reviews of the program supported by the Extended Credit Facility and the Extended Fund Facility arrangements, as well as the first review under the Resilience and Sustainability Facility arrangement.
• In 2024, economic growth is expected to reach 4.3 percent compared to 3.4 percent in 2023. Inflation has slowed down significantly, turning out at 2.6 percent in February 2024 compared to 9 % in February 2023. However, the economic outlook remains uncertain.
• Approval of the reviews by the IMF Executive Board should lead to the disbursement of about SDR 21.3 million (about [28.4] million dollars), of which SDR 6.44 million (about 8.58 million dollars) under the ECF and EFF arrangements and SDR 14.86 million (about 19.79 million dollars) under the RSF arrangement.

Nouakchott, Mauritania – March 8, 2024: A mission from the International Monetary Fund (IMF), led by Mr. Felix Fischer, held discussions with the Mauritanian authorities in Nouakchott from February 26 to March 7, 2024, on the second reviews of the program supported by the Extended Credit Facility (ECF) and the Extended Fund Facility arrangements,[1]as well as on the first review of the program under the Resilience and Sustainability Facility (RSF) arrangement.[2]

At the end of the mission, Mr. Fischer made the following statement:

"IMF staff and the Mauritanian authorities have reached a preliminary agreement at the end of the mission regarding the second reviews of the economic program supported by the ECF and the EFF, as well as the first review of the program supported by the RSF. Subject to approval by IMF Management and the Executive Board, Mauritania will benefit from SDR 6.44 million (about 8.58 million dollars) under the ECF and EFF arrangements as well as an initial disbursement of SDR 14.86 million (about 19.79 million dollars) under the RSF arrangement.

"In 2024, economic growth is expected to reach 4.3 percent compared to 3.4 percent in 2023, driven by the performance of the non-extractive sector. Inflation has slowed down significantly, turning out at 2.6 percent in February 2024 compared to 9 % in February 2023, reflecting the downturn in commodity prices and monetary policy tightening. At end- of 2023, the non-extractive primary balance, including grants, amounted to -5.3 percent of GDP (compared to -7.6 percent in 2022). Based on preliminary data, the current account deficit is expected to decrease to 9.8 percent of GDP in 2023 (compared to 16.7 percent at end-2022). International reserves have stabilized and are at an adequate level of 2.0 billion dollars in 2023.

"The economic outlook remains uncertain. An escalation of geopolitical tensions could affect Mauritania through new terms of trade shocks. In addition, more frequent climate disasters could cause deterioration in infrastructure, arable lands and agriculture production, and keeping food insecurity relatively high. Further delays in the start of the Greater Tortue Ahmeyim (GTA) gas project and adverse price fluctuations in commodity markets could lower fiscal revenue, increase external financing needs, and worsen the medium-term debt profile. On the upside, the implementation of future phases of the GTA project or of other major mining projects would improve economic growth and the balance of payments.

"Based on preliminary data, the performance in IMF supported programs under the ECF/EFF arrangements is on track and its implementation has been satisfactory. Most of the structural benchmarks have already been implemented. In particular, the Small and Medium Enterprises (SME) guarantee fund and the tax policy unit are operational. The reform envisaged for the first program review under the RSF for end-April 2024 is currently being implemented; this relates to the adoption of a decree on making cash transfers to vulnerable households permanent and the extension of the social safety nets program in response to droughts so as to include all affected low-income households while guaranteeing its financing.

"The IMF team wishes to thank the Mauritanian authorities and the IMF's other counterparts for the warm welcome that they received, for the constructive discussions that were held, and for the excellent cooperation."