161 Views
Ph:DR: Mauritanian government officials at the debt management workshop
A recently completed UNCTAD project has helped Mauritania improve itsa management of the public debt. Implemented by the DMFAS Program (Debt Management and Analysis System) of UNCTAD, this two-year project has improved the availability and quality of data on the debt of this sub-Saharan African country. UNCTAD and its partners are helping this African nation equip itself with the tools and knowledge needed to better manage its public debt and improve transparency.
It led to the publication of debt statistics bulletin of the country, in accordance with international standards. This bulletin now provides more complete and up-to-date information on Mauritania’s public debt, improving transparency for informed policy-making and debt restructuring negotiations.
While public debt can be vital for development, UN analysis highlights how it can become a heavy burden and divert public resources from essential services, such as education and health.
Idrissa Niang, director of the foreign debt department at the country’s finance ministry, expressed satisfaction with UNCTAD’s support, while urging global donors to continue helping developing countries achieve debt sustainability. long-term.
Debt relief efforts have paid off
In the early 2000s, Mauritania received debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative.
The country also benefited from the G20 debt service suspension initiative in the context of the COVID-19 pandemic and signed an agreement in June 2020 allowing it to postpone certain maturities.
It also conducted bilateral debt reorganization negotiations with some creditors, which resulted in a significant reduction in the debt burden in 2021.
“With the HIPCs and the debt restructuring processes, the structure of our debt has changed. Bilateral negotiations have been fruitful for Mauritania,” Mr. Niang said.
The risk of over-indebtedness has gone from “high” to “moderate”
The Mauritanian Ministry of Finance has been using UNCTAD’s DMFAS software since 1996 to manage the country’s external debt, which is mainly concessional but highly exposed to exchange rate risks, since 85% of Mauritania’s public debt is denominated in foreign currencies.
If the national currency, the Ouguiya, devalues, foreign currency debt payments become more expensive, leaving less money for the government to invest in development spending – such as investments in roads, hospitals and education.
The main indicator of external debt sustainability – the ratio of total external debt to exports – shows that the country’s ability to repay its medium- and long-term external debt has improved since 2015.
According to the World Bank, Mauritania’s debt-to-GDP ratio remained stable in 2022, at around 49%.
In January 2023, a joint assessment by the International Monetary Fund and the World Bank suggested that the risk of debt distress relating to overall and external public debt is moderate for Mauritania.
This change in risk, identified during the various debt sustainability assessments, towards “moderate” is positive, thanks to the recent debt restructuring and the continuous improvement of the country’s fiscal risk management.
In addition to Mauritania, UNCTAD’s DMFAS software is currently used by more than 80 institutions in 61 countries.
For more effective debt management practices
In order to continue to build Mauritania’s capacity and knowledge in debt data quality and debt sustainability analysis, UNCTAD and the United Nations Economic and Social Commission for Western Asia ( ESCWA) organized a atelier national in the country’s capital, Nouakchott, on June 19 and 20.
The workshop was organized within the framework of the joint project of UNCTAD and ESCWA “ Develop debt optimization strategies to improve fiscal space“, of which Mauritania is a pilot country.
The project supports countries in the region in adopting effective debt optimization practices, including improving debt transparency and reporting.
