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Country Report Mauritania January 2011
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HTMLForeign trade and payments: The current-account deficit is smaller than expected
The strong recovery in international demand for Mauritania's key commodity exports-iron, gold and oil-in 2010 following the slump in 2009 has led to a higher trade surplus than expected, according to recently published figures from the IMF. The Fund now estimates that the trade balance turned from a deficit of US$83m in 2009 to a surplus of US$81m in 2010, compared with the previously projected surplus of just US$6m. Total export earnings are estimated to be up by over 40% on 2009. The stronger performance was led by exports of iron ore, which are now estimated at US$920m in 2010, up by an impressive 76% on the total of US$522m registered in 2009.
By contrast, the IMF now estimates a slightly larger services deficit in 2010, of US$612m, than previously (US$590m), as activity in the mining sector has utilised imported services. The income balance in 2010 is now estimated to be a small surplus of US$36m, which represents a slight fall from 2009 as a result of a fall in compensation from the EU for fishing permits. A rise in official transfers from donors following the return of democratic rule in late 2009 has increased the overall transfers surplus from an estimated US$131m in that year to US$176m in 2010. As a result of these trends the overall current-account deficit shrank to US$318m in 2010 from US$379 in 2009; the Fund had originally expected the deficit to widen to US$407m.
| Mauritania: balance of payments | ||||
| (US$ m) | ||||
| 2007 | 2008 | 2009a | 2010b | |
| Trade balance | -193.7 | -153.6 | -82.8 | 81.3 |
| Exports (fob) | 1,401.8 | 1,787.6 | 1,364.2 | 1,922.8 |
| Imports (fob) | -1,595.5 | -1,941.2 | -1,447.0 | -1,841.5 |
| Services & income (net) | -465.7 | -600.3 | -426.9 | -576.1 |
| Current transfers (net) | 144.3 | 196.6 | 130.8 | 176.3 |
| Current-account balance | -515.1 | -557.3 | -378.9 | -318.4 |
| Capital account | 0.0 | 30.9 | 0.0 | 1,073.0 |
| Financial account | 417.6 | 377.7 | 226.7 | 316.4 |
| Direct investment (net) | 138.3 | 338.4 | -3.1 | 56.6 |
| Official medium- & long-term loans | 102.7 | 200.5 | 187.2 | 353.6 |
| Other financial flows | 176.6 | -161.2 | 42.6 | -93.8 |
| Errors & omissions | 118.8 | 103.3 | 143.0 | 0.0 |
| Overall balance | 21.1 | -45.4 | -9.2 | 1,070.9 |
| a Estimates. b IMF projections. | ||||
| Source: IMF. | ||||
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The surplus on the capital and financial account is estimated to have risen rapidly in 2010 to US$1.4bn, from US$227m in 2009, a sixfold increase. However, this stellar performance was largely due to a one-off windfall of just over US$1bn under the multilateral debt-relief initiative (MDRI). Net direct investment outperformed the Fund's original expectations: the small deficit of US$3.1m in 2009 was originally expected to remain broadly steady but in the event turned to a surplus of US$57m in 2010. Official medium- and long-term loans almost doubled in 2010 to an estimated US$354m, reflecting the return of democratic rule in the country. Bilateral budgetary support included allocations of US$25m and US$17m respectively from the governments of Libya and France. Owing to the MDRI there was a surplus on the overall balance of payments of US$1.1bn.
