IMF approves $23m disbursement to Mauritania
Mauritania will benefit from a new disbursement by the International Monetary Fund (IMF) of $23.8 million following the completion of the sixth review under the country's extended credit line arrangement.
This agreement, valued at $167 million for the period 2017-21, aims to help Mauritania by addressing social and infrastructure needs while maintaining macroeconomic stability. In addition to strengthening resilience to the COVID-19 crisis.
The pandemic has forced the authorities to adjust their priorities to deal with the health crisis that has affected 17,252 people and killed 442 in the country. In early 2020, the Executive Board approved on 23 April 2020 a disbursement of SDR 95.68 million (74.3 per cent of quota) under the Rapid Credit Facility (RCF). This credit helped increase health and social welfare spending in response to the crisis.
IMF support "was increased by SDR 20.24 million (15.7% of quota) on 2 September 2020 to address larger-than-anticipated financing needs due to the COVID-19 pandemic and extended for three months on 1 December 2020," reports the IMF communiqué. In total, access reached SDR 132.48 million (102.9% of quota) in 2020.
Following the completion of the review, the Executive Board also approved the authorities' request for a June 2020 performance criterion waiver on the central bank's net domestic assets.
According to recent comments by the Mauritanian Minister of Economic Affairs, Ousmane Mamoudou Kane, the economic contraction in 2020 is -2.2%. However, the IMF commends the government for its efforts and forecasts a recovery of 3.1 per cent by 2021. The minister also indicated that trade contracted by more than 9%, while the transport sector fell by 3%, manufacturing by 4% and the primary sector by 5.4%.
Following the Executive Board discussion, Mitsuhiro Furusawa, deputy managing director and acting president said that "the COVID-19 pandemic continues to impose severe human, economic and social hardship on Mauritania." He added that "the economy contracted in 2020 and the crisis generated additional funding needs. The authorities responded quickly to mitigate the impact of the pandemic, while international partners provided substantial funding and a suspension of debt servicing."
In addition to high exports, this has put Mauritania in a stronger position to cope with the challenges and support recovery. He noted that "the outlook remains highly uncertain and dependent on volatile commodity markets, with considerable downside risks in the event of further waves of pandemics."
He mentioned that the authorities should "continue to create fiscal space to increase priority spending on education, health, social protection and infrastructure by mobilising domestic revenue and strengthening public financial management." Because of the country's risk of debt overhang, he encouraged the authorities to seek more grants to finance their development plans, maintain reserves and safeguard debt sustainability.