INTERNATIONAL MONETARY FUNDJANUARY 2014
The Mauritanian Economy: Performance and Outlook
Achieving Macroeconomic Stability
1. Achieving Macroeconomic Stability
Successful completion of the 3-year Extended Credit Facility program with the Fund (2010-13).
In a difficult external environment: Global financial crisis, European crisis, food price hikes.
And challenging regional and domestic conditions. Political uncertainty related to the Arab Spring Mali crisis 2012 Drought
1. Achieving Macroeconomic Stability
Restored macroeconomic stability Strong growth dynamics combined with contained
inflation Buildup of external and fiscal buffers Progress with restoring the health of the financial
sectorSubstantive progress with the structural
reform agenda Fiscal: Public financial management, revenue
mobilization, tax and custom administration Progress on financial sector reforms and foreign
exchange markets Elimination of the diesel subsidy
Growth has been above peers, ..and across sectors
1
1. Achieving Macroeconomic Stability
2008 2009 2010 2011 2012 2013-4
0
4
8
12
16
20
Sub-Saharan AfricaMENAP oil importersMauritania
Real GDP Growth
1 2 3 4 5 6 7-2
0
2
4
6
8
10
12
14
16
Real non-oil GDP growthReal non-extractive GDP growth Real GDP growth
Gross Domestic Prod-uct (Percent)
..with significant growth in cereal production…
..and mining production.
1. Achieving Macroeconomic Stability
2008 2009 2010 2011 2012 2013 2014100
150
200
250
300
350
400Cereal Production (in tons)
2008 2009 2010 2011 2012 2013 20140
10
20
30
40
50
0
50
100
150
200
250
300
350
Irone ore (thousands of tons, LHS)Copper ( thousands of tons, LHS)
Mining(Tons)
Inflation has remained under control…
…in line with declining local and imported inflation
1. Achieving Macroeconomic Stability
2008 2009 2010 2011 2012 20130
2
4
6
8
10
12
14
16
18Sub-Saharan AfricaMENAP oil importersMauritania
Inflation(Period aver-age)
Feb-09 Apr-10 Jun-11 Aug-12 Oct-13-4
-2
0
2
4
6
8
10
12
14
16OverallLocalImported
Infla-tion(Percent)
Fiscal outcomes have been stronger than in peers…
…driven by improved revenue mobilization
1. Achieving Macroeconomic Stability
1 2 3 4 5 6-12
-8
-4
0
4
8
12
MENAP oil importersSub-Saharan Africa
Overall Fiscal Balance(including grants, percent of GDP)
2008 2009 2010 2011 2012 20130
20
40
60
80
GrantsNon-extractive non-tax revenuesNon-extractive tax revenues
Revenues
..which has supported a hike in public investment
…financed mostly by domestic resources
1. Achieving Macroeconomic Stability
2008 2009 2010 2011 2012 2013 20140
15
30
45
60
75InterestSubsidies and transfersGoods and services Wage bill
Expenditures
2008 2009 2010 2011 2012 2013 20140
5
10
15
20
25
Foreign-financed in-vestment Domestically financed investment
Investment
Concessional external financing dominates.
Public debt remains elevated, but debt service has improved.
1. Achieving Macroeconomic Stability
2008 2009 2010 2011 2012 2013 20140
2
4
6
8
10
12
14
-20
25
70
115
160
205
250
Interest Payments (Percent of GDP)Principal Amortization (Percent of GDP)Debt to GDP (Percent, RHS)
Debt Profile
2008 2009 2010 2011 2012 2013 2014-15
-10
-5
0
5
10
15
External financing DomesticUse of oil revenues
Sources of Financing(percent of GDP)
Widening of the current account mostly driven by extractive industries
And has been mostly financed with FDI and official loans
1. Achieving Macroeconomic Stability
2008 2009 2010 2011 2012 2013 2014-40
-25
-10
5
20
35
50
Other Financial FlowsOfficial MLT LoansFDI (Net)
Financial Account(in percent of GDP)
2007 2008 2009 2010 2011 2012 2013-40
0
40
80
120
Current Account BalanceCurrent account balance excluding imports of extractive industries
Current Account (In percent of GDP)
Current account relies on traditional exports…
…and benefits from benign price dynamics
1. Achieving Macroeconomic Stability
2008
2008
2008
2008
2009
2009
2009
2009
2010
2010
2010
2010
2011
2011
2011
2011
2012
2012
2012
2012
2013
2013
2013
2013
2014
2014
2014
2014
80
180
280
380
480
580
680
780
880
FoodIron oreCopperOil
Commodity Price Indices (2005=100)
20 20 20 20 20 20 20 20 20 20 20 20 20 20-10
10
30
50
70
90
110
130
150
Iron ore exports Fish exports OthersGold
Goods Export Revenue(Percent of total exports)
External buffers are at an historically record level…
…in the context of a relatively stable currency
1. Achieving Macroeconomic Stability
2008
2008
2008
2008
2009
2009
2009
2009
2010
2010
2010
2010
2011
2011
2011
2011
2012
2012
2012
2012
2013
2013
0
10
20
30
0
1
2
3
4
5
6
7
8
Gross official reserves (percent of GDP)Reserves (in months of non-extractive imports; RHS)
Foreign Exchange Re-serves
0
20
40
60
80
100
120
140
160
0
50
100
150
200
250
300
350
Real effective exchange rateNominal effective exchange rateUM/USD (right scale)
Exchange Rates(Index, 2005=100)
Private sector credit growth has remained subdued
..banks remain well capitalized but have low profitability
1. Achieving Macroeconomic Stability
Jun-08 Oct-09 Feb-11 Jun-12 Oct-130
5
10
15
20
25
30
35
40
Policy rateCredit growthT-bill rate
Private-sector Credit Growth(y-o-y; percent)
Return on assets
Return on equity
Capital to assets ra-
tio
Regulatory capital ra-
tio
0
5
10
15
20
25
30
35Banking Indica-tors(End-2012; percent)
Economic Outlook
2. Economic Outlook
Initial Condition
s•Macroeconomic stability•Higher resilience to external shocks
Context •Prudent macroeconomic policies•Still elevated commodity prices•A strong mining potential
Outlook •Positive, with an opportunity to support stronger and more inclusive economic growth dynamics.
2. Economic Outlook
Positive economic outlook: Annual average real GDP growth above 7 percent over the medium term.
…fueled by mining, agriculture and fishing, construction and services,
…and with positive effects on potential growth.
….and challenges remain.
2. Economic Outlook: Challenges
Resilience to external shocks
Private sector development and economic diversification
More inclusive growth dynamics
Economic Diversification
Private Sector Development
Increasing resilience of the economy to external shocks
Enhance domestic sources of growth dynamics
Economic transformation to increase higher value-added output
Improve business environment
Financial deepening and access to finance
Improve labor markets dynamics
Reduce informality
2. Economic Outlook: Challenges
2. Economic Outlook: Challenges
More inclusive growth dynamicsAccess to drinking water and
electricityImprove education and access to
healthBetter targeted social transfers to
reach the most vulnerable
3. Conclusions
Mauritania’s economic potential is large, with opportunities to capitalize in the coming decade.
Private sector development will drive economic diversification and job creation.
Promoting more inclusive economic growth is crucial to improve living standards for the population overall.
Good management of the economic juncture will provide Mauritania with a historic opportunity to transform this country.
Thank you!