3 October 2012

Mauritania: Economy Gets Thumbs-Up

Nouakchott — Despite a drought and global economic slowdown, Mauritania's economy continues to grow, according to international lenders.

Experts from the International Monetary Fund (IMF) just wrapped up their fourth review of Mauritania's economic figures and as part of a programme supported by the three-year Extended Credit Facility agreement.

The figures from the fourth review drew were discussed at a September 24th press conference in Nouakchott attended by Mauritanian Finance Minister Thiam Djombar, the governor of the Mauritanian Central Bank (BCM), Sid'Ahmed Oul Raiss, and Amine Mati, the head of the IMF mission.

"After 2011, which was characterised by a severe drought, agricultural production has bounced back," Mati said. "With dynamism in the construction and public works sector, this should help the return to vigorous economic growth."

The IMF representative added, "Despite a significant drop in mining production and a slow-down in demand from Europe, the country's gross domestic product (GDP) should grow by 6.2% this year, where previous forecasts from the Fund were expecting growth of 5.5%."

"Currency reserves will reach a record level of around 750 million dollars," Mati continued, noting that "inflation should remain well under control thanks to a drop in food and energy prices, along with the implementation of prudent monetary and foreign exchange policies.

However, the IMF official said that "the country's external investment position is expected to deteriorate appreciably in 2012 due to one-off effects linked to the emergency assistance programme to deal with the drought, major investment in the energy sector and the construction of the new airport, before picking up in the medium term thanks to new mining production and a drop in the prices of basic commodities other than metals."

Taking a similar line, Finance Minister Djomber said that "Mauritania's economic improvement continues," explaining that "tax receipts have grown this year, exceeding those of the previous year by 30 billion ouguiyas."

The minister added that "the state has spent more than 64 billion ouguiyas, 1/5th of the national budget, on domestic expenditure (subsidies for hydrocarbons, gas and electricity)."

"The Mauritanian economy's good shape has convinced the IMF to work to inject a new loan instalment of 118 million dollars, which the financial institution awarded to the country in 2010 to compensate for the impact of the crisis on the country's reserves," explained economist Ba Mamadou.

"In addition to the efforts made by the country's authorities this year, awarding 20% of the budget to subsidising energy sources for the population, the IMF is encouraging them to work to stamp out unemployment and poverty," the economist said.

According to Mamadou, "This godsend should allow the government to pursue its policy of subsiding basic commodities, which has a considerable impact on the hardest-pressed in society. There will be an undeniable impact in reducing youth unemployment and improving living conditions for public sector workers, who will enjoy pay rises."

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