Today, the Executive Board of the International Monetary Fund (IMF) approved the disbursement of SDR 95.680 million (about US$130 million) to be drawn under the Rapid Credit Facility (RCF). The RCF funds will help address Mauritania's urgent balance of payments need stemming from the COVID-19 crisis, estimated at close to US$370 million, thereby providing space to increase spending on health services and social protection programs. The funds should also help to catalyze additional donor support.
The economic and social impact of the crisis is expected to be substantial in Mauritania. The economy is currently projected to contract by 2 percent this year and the overall budget deficit could rise to 3.4 percent of GDP.
Following the Executive Board's discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, made the following statement:
"The COVID-19 pandemic is having a dramatic human, economic, and social impact on Mauritania. The short-term economic outlook has deteriorated rapidly and growth is expected to turn negative this year, with severe hardships for the population, and the outlook is subject to considerable uncertainty. These developments have given rise to urgent balance of payment and fiscal financing needs.
"The authorities have responded swiftly with measures to contain the pandemic and alleviate its fallout. Going forward, prioritizing health spending and targeted support to the most vulnerable households and sectors in the economy remains critical. The authorities are committed to full transparency and reporting of resources deployed for the emergency response, to audit crisis-mitigation spending once the crisis abates, and to publish the results. At the same time, they remain committed to the economic reform program supported by the ongoing ECF arrangement with the IMF. The program aims at using the fiscal space to increase priority spending on education, health and social protection and infrastructure, while mobilizing domestic revenues and maintaining prudent borrowing policies to preserve debt sustainability.
"The IMF's financial assistance under the RCF will provide a sizable share of the financing needed to implement the anti-crisis measures. Additional concessional and grant financing from the international community will be critical to close the remaining financing gap and help Mauritania respond effectively to the COVID-19 crisis."