Country Report Mauritania January 2011

Outlook for 2011-12: Policy trends

The government is expected to finalise a new poverty reduction and growth facility (PRSP)-a national development strategy that is often required for development programmes with the IMF and World Bank-before the middle of 2011, and a draft has already been shared with key development partners. In addition to improvements in the provision of basic public services, such as healthcare and education, the government will focus on efforts to maintain economic stability and improve the efficiency of the public administration, as well as improving energy and transportation infrastructure to reduce the cost of exploiting the country's natural resources. On September 26th the IMF concluded the first review under the extended credit facility (ECF), which is expected to result in the disbursement of SDR11m (US$17m), given an overall positive assessment. The programme with the Fund identifies a number of structural reforms, to improve the prudential oversight of the banking sector and to restructure public enterprises, although the government may struggle to reach quantitative performance criteria related to fiscal consolidation in advance of the 2012 legislative election. Mauritania's outspoken stance against terrorism will win it plaudits with traditional bilateral donors, particularly France and the US. Meanwhile, the race for minerals will draw in non-traditional donors, such as China and India, and Mauritania's alignment with the Arab bloc, emphasised in 2010 by the much-publicised severing of ties with Israel, will bring in funding from the Middle East. As a result, aid flows are expected to pick up over the medium term.

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