Nouakchott, Mauritania:
Mr. Kenji Okamura, Deputy Managing Director of the International Monetary Fund (IMF), issued the following statement today in Nouakchott at the end of his visit to the Islamic Republic of Mauritania, which followed the approval on January 25, 2023, by the IMF Executive Board of 42-Month arrangements of about US$ 86.9 million under the Extended Credit Facility and Extended Fund Facility with the Islamic Republic of Mauritania:
"First, I am delighted to be in Mauritania. This was my first visit, and I would like thank President Mohamed Ould Cheikh El Ghazouani, Prime Minister Mohamed Ould Bilal, Governor Mohamed Lemine-Dhehby, Minister of Economic Affairs and Productive Sectors, Ousmane Kane, Minister of Finance Isselmou Ould M'bady, as well as the other ministers and senior officials for their warm hospitality and for the productive meetings during my stay in Mauritania. I would also like to thank all the representatives from the civil society and private sector for very constructive meetings. During our meetings, we discussed recent economic developments in Mauritania and risks to the economy. I welcomed Mauritania's determined response to the COVID-19 pandemic, which coupled with sizable international financial support have placed Mauritania on a recovery path.
"However, a confluence of shocks including Russia's war in Ukraine and regional tensions have narrowed the space for policy intervention, while Mauritania still faces significant human and infrastructure development needs. Surging international commodity prices have led to inflationary pressures and food insecurity.
"The movements in international commodity prices have also worsened the external position. Preliminary data suggest that the current account deficit doubled to 16.4 percent of GDP in 2022, due to pressures on international food and energy prices and the decline of iron ore prices. By end-2022, international reserves declined to $1.9 billion compared to $2.3 billion at end-2021. Growth is expected to have accelerated to 5.3 percent in 2022, mainly driven by the recovery in the extractive sector. After reaching a peak of 12.7 percent in October 2022, inflation decelerated to 10.3 percent in January 2023 in response to the central bank of Mauritania (BCM) monetary policy tightening.
"I welcomed the launch of the authorities' economic program that will be supported by the IMF, and their strong commitment to its implementation. Mauritania's economic reform program supported by the IMF arrangements of about US$87 million aims to preserve macroeconomic stability, strengthen the fiscal and monetary policy frameworks, consolidate the foundations for sustainable, inclusive growth, and reduce poverty.
"We also discussed the need to preserve infrastructure investment and social spending to achieve higher and greener growth while remaining within a disciplined fiscal policy to contain debt. A continued tight monetary policy stance closely coordinated with budget execution will help to reduce inflation.
"I underscored the importance of decisive implementation of structural reforms, including improving governance, transparency, the business environment and financial inclusion, and mitigating the challenges posed by climate change.
"Lastly, I very much appreciate the excellent, long-standing relations between Mauritania and the IMF, and look forward to our continued partnership through the ECF/EFF-supported economic program."
