Country Report Mauritania January 2011

Economic policy: Fiscal consolidation is targeted in 2011

In their Letter of Intent to the Fund, the authorities stressed their intention to pursue fiscal consolidation in 2011. No doubt in view of the ballooning public-sector wage bill in 2010, the government pledged to enforce greater discipline in its current spending. It hopes to achieve this through adopting a new payroll forecasting methodology and improving databases on staff numbers. Furthermore, it hopes to build on the impressive revenue performance estimated in 2010. The government hopes that this will be achieved in 2011 in part through continued rapid economic growth, as well as by implementing reforms to boost the efficiency of revenue collection through computerising the operations of the tax office and customs service, claiming arrears, unifying Treasury accounts and completing a tax-payer census by September. Revised budget proposals for 2011 submitted by the government to the IMF provide for a cut in overall spending by 3.2% from UM295.7bn in 2010 to UM286.2bn, with non-oil revenue and grants expected to rise by 0.5% from UM245.7bn to UM246.9bn. Overall, the authorities hope to limit the basic non-oil deficit to UM17.1bn, equivalent to a forecast 1.6% of GDP.

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