ISLAMIC TRADE FINANCE CORPORATION GIVES $40

UNCLAS NOUAKCHOTT 000405


DAKAR FOR RFFP
STATE FOR AID/W
ACCRA FOR USAID/WA

E.O. 12958: N/A
TAGS: EAGR EAID ECIN PREL
SUBJECT: ISLAMIC TRADE FINANCE CORPORATION GIVES $40
MILLION TO IMPROVE FOOD SECURITY AND AGRICULTURAL
PRODUCTIVITY IN MAURITANIA


1. Summary. The Islamic Trade Finance Corporation (ITFC)
signed a $40 million agreement with the Government of the
Islamic Republic of Mauritania (GIRM) to improve food
security, agricultural productivity, and land management. Of
the $40 million package, $14 million will be for increasing
food stocks and improving agricultural productivity and $26
million will be used to expand agricultural lands by 7900
acres. A mission from the ITFC will visit Mauritania in
August to conduct an assessment of the agricultural sector
and further develop the plan to increase agricultural lands.
End Summary.


2. The ITFC signed a $40 million agreement June 9 with the
GIRM to improve food security, agricultural productivity, and
land management. The package for Mauritania is part of a
larger $1.5 billion Islamic Develop Bank program to address
food security in 26 of the least developed Islamic countries.
The $40 million for Mauritania comes in the form of a loan
made on very concessional terms to the GIRM. The $40 million
package will be divided into two parts: $14 million for food
security and $26 million for land management. For the food
security portion, $2 million will be devoted to increasing
food stocks and the remaining $12 million will be used to
improve agricultural productivity. To increase agricultural
productivity, the money will be used specifically to provide
agricultural inputs, pesticides, fertilizers, and mechanized
equipment.


3. The remaining $26 million will be for longer-term land
management programs to bring more land into cultivation. It
will be implemented over a five year period. The program
aims to increase agricultural lands by 3200 hectares (7900
acres) during this period. Much of the money will be spent
on developing water sources, installing irrigation systems,
and fencing. The land management program is being
co-financed by the ITFC and the Islamic Development Bank.
Hassan Ould Boukhreiss, Director of Financing and Project
Supervision at the Ministry of Economy and Finance, told
EconOff that the GIRM has asked the Saudi Fund for
Development for additional funding to expand the program.


4. A mission from the Islamic Development Bank and ITFC will
be in Mauritania in August. The mission will be conducting
an assessment of the agricultural sector in Mauritania and
visiting different sites to further develop the details of
the land management program. It will also be looking for
ways to enhance cooperation between the public and private
sectors to improve agricultural development.


5. The loan from the ITFC comes at a critical time for
Mauritania. A joint GIRM-World Food Program (WFP) study
shows that rural food insecurity has increased 30% over the
past year and estimates that over 650,000 people among a
population of just three million are food insecure. To
combat food insecurity President Abdallahi announced a $110
million food emergency program in April and WFP has increased
operations in Mauritania, budgeting over $30 million for
2008-2009. The money from the ITFC will be a supplement to
the GIRM's food emergency program and WFP's programs, not a
part of them. The funds from the ITFC to increase land under
cultivation are especially important because Mauritania must
import 70% of its foodstuffs, rendering it extremely
vulnerable to soaring international commodity prices. While
Mauritania will likely never be food self-sufficient, it can
certainly produce more than it is now by improving
agricultural techniques and productivity and bringing more
land into cultivation.

Boulware