Abstract
Mauritania achieved substantial progress owing to its macroeconomic policies, budget formulation, governance, and transparency under the economic program. Executive Directors commended the program and emphasized the need for tight fiscal and monetary policies. Directors noted the implementation of all remedial actions and agreed that Mauritania qualifies for debt relief under the Multilateral Debt Relief Initiative (MDRI). They also called on the authorities to strengthen the financial sector regulatory framework, and commended the comprehensive Anti-Money Laundering and Combating the Financing of Terrorism framework.
1. This statement summarizes information, which has become available since the staff report was circulated to the Executive Board on June 7, 2006. It does not change the thrust of the staff appraisal.
2. The noncomplying disbursements have been repaid. The second installment of SDR 10.14 million with SDR 6,529 as interest was paid on June 12, 2006, three days earlier than expected.
3. Preliminary data indicate that macroeconomic performance through May 2006 was in line with the staff-monitored program objectives for the first half of 2006. The basic nonoil deficit through end-May appears to be contained at one percent of non-oil annual GDP below the end-June target of 2.7 percent; base money increased by only 8.6 percent during January–May, well below the 15.3 percent projected for the first six months; gross foreign assets of the BCM reached US$63.7 million at end-May (compared with the end-June projection of $65.4 million) and the parallel market premium over the official UM/US$ exchange rate stood at ¼ percent through mid-June. With the CPI rising by 0.9 percent in May—somewhat less than anticipated given recent domestic petroleum price increases—12-month inflation at end-May receded to 5.1 percent (from 5.3 percent at end-April); this strengthened the prospect for attaining the end-2006 inflation objective of 8.1 percent. The authorities have approved the new production sharing contracts for the Chinguetti zone (signed on June 6, 2006), which implies that the signature bonus of US$ 100 million would be disbursed by end-June 2006, a month earlier than projected in the staff report.
4. Implementation of structural reforms is proceeding as scheduled. The final audit report for the BCM’s end-2005 accounts has been transmitted to the Fund and is expected to be published on the Internet by end-June. The national committee for the implementation of the Extractive Industries Transparency Initiative took further steps in preparation for the first annual 2006 report, scheduled for publication by end-September 2006. National consultations on the draft PRSP were held during June 5–7, 2006.