Ministry of Economic Affairs Releases Second Communique on Management of Mauritania’s External Debt

In a communique, the ministry of economic affairs and productive sectors affirmed that His Excellency the President of the Republic, Mr. Mohamed Ould Cheikh El Ghazouani, called, in many international platforms, for the cancellation of debts.

The communique, which is the second of its type after the first communique of December, 20, 2020, added that the government has started drafting a strategy in October 2020 to significantly reduce the national debt. In this regard, the government signed a contract with a specialized international office to support the country’s efforts.

Here is the complete text of the communique 2:

The Covid-19 pandemic has significantly impacted the Mauritanian economy and increased the vulnerability of the population in terms of health and living conditions. The Mauritanian authorities have taken urgent measures to alleviate the repercussions of the pandemic and adopt to the new circumstances. The measures include: increasing health expenditures and the public interests associated with it, approving measures to help families and small business, and supporting the national production, etc.

Such measures require the provision of significant external resources that can only be provided either by available funds or debt scheduling.

Our country resorted to grants and soft loans to avoid the exacerbation of the national debt and finance the emergency needs associated with the pandemic.

The G20, including some of our country’s creditors, took a decision in April 2020 to freeze the debt service payment owed to them for six months. This decision, which was renewed twice, has enabled our country to stop paying up to $ 200 million.

This issue poses a significant challenge to our country and other African countries. It is in this context that the President of the Republic, undertook to call, in all international forums, for the cancellation of debts. At the national level, the government has started drafting a strategy in October 2020 to significantly reduce the national debt. In this regard, the government signed a contract with an international consortium, Franklin-Finexem, a specialized international office, to support the country’s efforts.

In consultation with all our creditors and the staff of the IMF and the World Bank, this Consortium conducted the first phase of its mission and submitted its draft report in last April. This report, devoted to the audit of Mauritanian external debt, has elicited comments from the Government. We have also received the reports of Bretton Woods’s institutions last week.

The final report will be a reference in the discussion with our partners for debt scheduling. It shows a debt level of some 5 billion dollars (with certain assumptions on Kuwaiti passive debt), a very low exposure of the country to the Paris Club countries, a limited exposure to the G20 countries, and a particularly heavy debt service over the next 5 years.

Since the launch of the Mauritanian initiative, the G20 and the Paris Club agreed, in November 2020, to set up a common framework for the treatment of the debt of the 73 countries eligible for the moratoriums on debt services (including our country). This framework became operational in January 2021.
In this context, Chad, Zambia and Ethiopia have so far requested to benefit from the mechanism put in place for a re-profiling of their debts.

Because it meets all the required eligibility conditions, Mauritania intends to use all the options available to achieve its objectives regarding its external debt: firstly, through the common framework set up by the G20 and the Paris Club, and then, if necessary, through bilateral negotiations. The consortium has begun preparing the second phase of its mission, which is to formulate the best debt dialogue strategy with each creditor separately.