SUBJECT: IMF STAFF TO GIVE GREEN LIGHT TO DEBT CANCELLATION

C O N F I D E N T I A L NOUAKCHOTT 000599

SIPDIS

SIPDIS

STATE FOR AF/W; AF/EPS (A. ADLER, J. HAENI)
EB/ESC/IEC (T. PEDERSON)
EB/CBA (D. WINSTEAD)
EB/IFD (A. BESMER)
DAKAR FOR RSCO CGRIFFIN

E.O. 12958: DECL: 05/17/2016
TAGS: ECON BBSR EFIN EPET EVIN MR
SUBJECT: SUBJECT: IMF STAFF TO GIVE GREEN LIGHT TO DEBT
CANCELLATION

REF: NOUAKCHOTT 557

Classified By: AMBASSADOR JOSEPH LEBARON, REASON 1.4 (B),(D)

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(U) Key Points
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-- A visiting IMF mission has concluded that Mauritania has
generally fulfilled its obligations under MDRI and will give
a favorable recommendation for debt cancellation when the
Board meets in June.

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(C) Comments
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-- The transitional government appears to have met almost all
IMF criteria for debt relief, with one final step in June --
the publication of the Central Bank audit.


End Key Points and Comments.



1. (U) IMF Deputy Division Chief of Middle East and Central
Asia Department Jean Le Dem told heads of missions May 8 that
after a two week mission here to assess Mauritania's progress
on macro-economics and budgetary reform, the staff will
recommend to the board to cancel Mauritania's IMF debt during
its June session. Le Dem noted significant progress in good
management in public finances with the elimination of all
extra-budgetary expenses. The government has reorganized its
budget into functional classifications which will allow for a
better review of public expenditures. He also said that the
process of rectification of historical data is going well.


2. (U) The Central Bank Governor added that the transitional
government will soon make public Central Bank audits as well
as other budget reports, allowing for greater transparency.
He said the government will use the $100 million bonus from
Woodside (reftel) and a savings of about $50 million in debt
service from debt cancellation to pay down its internal debt
and increase investment in public administration.


3. (U) A representative from the African Development
announced that on May third the bank decided to cancel the
debt of 13 of the 14 African countries benefiting from MDRI,
but delayed a decision on Mauritania until June.


4. (C) IMF ResRep Philippe Callier told DCM after the meeting
that he considered the publication of an audit of Central
Bank currency reserve holdings, which will occur in June, as
the key element in safeguarding that the government does not
return to its old practices. "All other reports can be
falsified, but not this," he said. "If the government in the
future ceases to publish the audits, that will be an
extremely bad sign."

LeBaron
LeBaron