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IMF Country Report No. 20/140
ISLAMIC REPUBLIC OF MAURITANIA
REQUEST FOR DISBURSEMENT UNDER THE RAPID CREDIT FACILITY—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR THE ISLAMIC REPUBLIC OF MAURITANIA
April 2020
In the context of the Staff Report for the Request for Disbursement Under the Rapid Credit Facility, the following documents have been released and are included in this package:
A Press Release including a statement by the Acting Chair of the Executive Board and summarizing the views of the Executive Board as expressed during its April 23, 2020.
The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on April 23, 2020, following discussions that ended on April 14, 2020, with the officials of the Islamic Republic of Mauritania on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on April 17, 2020.
A Debt Sustainability Analysis prepared by the staff of the IMF and the International Development Association.
A Statement by the Executive Director for the Islamic Republic of Mauritania.
The documents listed below have been or will be separately released.
Letter of Intent sent to the IMF by the authorities of the Islamic Republic of Mauritania*
*Also included in Staff Report
The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents.
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ISLAMIC REPUBLIC OF MAURITANIA
REQUEST FOR DISBURSEMENT UNDER THE RAPID CREDIT FACILITY
April 17, 2020
Executive Summary
Developments and outlook. The Covid-19 pandemic is having a dramatic human, economic, and social impact on Mauritania. The short-term economic outlook has weakened rapidly owing to the sharp deterioration in global conditions and the impact of domestic containment measures. Growth is expected to turn negative this year, with severe hardships on the population. Risks are tilted to the downside given the possibility of a more extensive global and domestic Covid-19 outbreak, a much steeper economic decline this year, and more gradual recovery thereafter.
Authorities’ request. The humanitarian and economic impact of the pandemic has given rise to urgent balance of payments and fiscal financing needs. The authorities have requested financial assistance under the Rapid Credit Facility (RCF) in the amount of SDR 95.680 million (about $130 million or 74.3 percent of quota, as limited by the annual PRGT access limit), to be provided as budget support.
Current ECF arrangement: The fourth review under the Extended Credit Facility (ECF) was completed on December 11, 2019. The fifth ECF review mission that was concluded in early March found that performance under the program was broadly on track. Since then, however, the situation has deteriorated dramatically. Given the magnitude of the shock, immediate mitigation measures are critical and completion of the review is not feasible at this time. The authorities have reaffirmed their commitment to the reform policies in the ECF and see the RCF as a bridge until resumption of the ECF review.
Policy priorities. Continue with essential containment measures and support for health systems. Shield affected people and firms with adequate, timely, and targeted fiscal and financial sector measures. Reduce stress to the financial system. Report transparently on the use of emergency resources and audit samples of crisis-mitigation spending.
Staff appraisal. Staff supports the authorities’ request for a disbursement under the RCF in light of the urgent balance of payments need, in the form of budget support. Despite a high risk of debt distress, public debt remains sustainable and capacity to repay the Fund is adequate. However, as the Fund will only cover about one-third of the financing gap, the authorities will need to seek sizable additional donor financing.
Approved By
Taline Koranchelian and Ashvin Ahuja
Discussions took place remotely during April 9–14, 2020 with Central Bank Governor Cheikh El Kebir Moulaye Taher, Minister of Finance Mohamed-Lemine Dhehby, and Minister of Economy and Industry Abdel Aziz Dahi. The team comprised Eric Mottu (head), Jean van Houtte, Imen Ben Mohamed, Joseph Karangwa (all MCD), Babacar Sarr (FAD), and Eric Pondi Endengle (SPR). Messrs. Mohamed-Lemine Raghani and Mohamed Sidi Bouna (both OED) attended policy meetings. Ms. Maaloum Braham and Ms. Abdulkarim provided research assistance; Ms. Cruz, Ms. El Kawkabi, and Mr. Kane provided administrative support.
Contents
CONTEXT
IMPACT OF THE PANDEMIC, OUTLOOK, AND RISKS
POLICY DISCUSSIONS
FUND SUPPORT AND CAPACITY TO REPAY
STAFF APPRAISAL
BOX
1. Revised National Accounts
TABLES
1. Macroeconomic Framework, 2016–25
2. Balance of Payments, 2016–25
3a. Central Government Operations, 2016–25
3b. Central Government Operations, 2016–25
4. Monetary Survey 2016–22
5. Banking Soundness Indicators, 2010–19
6. External Financing Requirements and Sources, 2016–22
7. Capacity to Repay the Fund, 2020–34
8. Risk Assessment Matrix
APPENDIX
I. Letter of Intent
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ISLAMIC REPUBLIC OF MAURITANIA
REQUEST FOR DISBURSEMENT UNDER THE RAPID CREDIT FACILITY—DEBT SUSTAINABILITY ANALYSIS
April 17, 2020
Approved By
Taline Koranchelian and Ashwin Ahuja (IMF) and Marcello Estevão (IDA)
Prepared by the staffs of the International Monetary Fund and the International Development Association.
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