Document of The World Bank FOR OFFICIAL USE ONLY Report No. 16595 MEMORANDUM OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A COUNTRY ASSISTANCE STRATEGY OF THE WORLD BANK GROUP FOR THE ISLAMIC REPUBLIC OF MAURITANIA MAY 21, 1997 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit = Mauritanian Ouguiyas (UTM) US$1 142.2 UM (4/7/97) SDR 1 US$1.38338 (4/8/97) WEIGHTS AND MEASURES Metric system ABBREVIATIONS AND ACRONYMS AfDB African Development Bank APDF African Projects Development Facility BCM Banque Centrale de la Mauritanie BMCI Banque Mauritanienne pour le Commerce et I 'Industrie CESP Country Environmental Strategy Paper CG Consultative Group CPF Centres de Promotion Feminine ECOWAS Economic Community of West African States EDI Economic Development Institution ESAF Enhanced Structural Adjustment Facility EU European Union FDI Foreign Direct Investment FHH Female Headed Households GBM Generale des Banques de Mauritanie GDP Gross Domestic Product GIRM Govemment of the rslamic Republic of Mauritania GNFS Goods and non-factor services GNP Gross National Product HIPC Highly Indebted Poor Countries IBRD Intemational Bank for Reconstruction and Development (World Bank) IDA Intemational Development Association IFAD Intemational Fund for Agricultural Development IFC Intemational Finance Corporation IMF Intemational Monetary Fund MDRE Ministere du Developpement Rural et de I 'Environnement MIGA Multilateral Investment Guarantee Agency NGO Nongovenmmental Organization OHADA Organisation pour I 'harmonisation des droits des affaires OMVS Organisation de Mise en Valeur dufleuve Senegal ONS Office Nationale de la Statistique OPEC Organization of Petroleum Exporting Countries PDIAIM Programme de Developpement Integre de I 'Agriculture Irniguee en Mauritanie PE Public Enterprises PER Public Expenditure Review PFP Policy Framework Paper PGRNM Projet de Gestion des Ressources Naturelles en Mauritanie PIP Public Investment Program PLMCD Programme de Lutte Multi-sectorielle contre la Desertification RPTES Review of Policies, Strategies and Programs of the Traditional Energy Sector SAGA Social and Gender Analysis SECAL Sector Adjustment Loan SEF Small Enterprises Fund SEPF Secretariat d'Etat a la Promotion de la Femme SNIM Societe Nationale Industrielle et Miniere SOE Statement of Expenditures SONELEC Societe Nationale d 'Electricite SSA Sub-Saharan Africa UN United Nations UNI)P United Nations Development Prograrnme Vice-President Jean-Louis Sarbib Country Director Hasan Tuluy Technical Manager Peter Harrold Task Team Leader Miguel Saponara FOR OFFICIAL USE ONLY ISLAMIC REPUBLIC OF MAURITANIA COUNTRY ASSISTANCE STRATEGY TABLE OF CONTENTS Page No. I. INTRODUCTION .......................................................... 1l II. THE ECONOMY ...........................................................2 Recent Economic and Social Perfoirmance ...........................................................2 Regional Integration ...........................................................5 Environmental Issues ...........................................................6 III. EXTERNAL ENVIRONMENT ...........................................................6 IV. MAUR1TANIA'S DEVELOPMENT CHALLENGES AND APPROACHES .............................7 Key Elements of the Government's Strategy ...........................................................8 V. ECONOMC OUTLOOK ...................... . 10 VI. MAURITANIA-BANK GROUP PARTNERSHIP . . .11............................. 1 Lessons Learned ...................................... 12 Areas of Intervention ....................................... 13 Proposed lending program ...................................... . 17 IFC and MIGA Activities ...................................... . 18 Aid Coordination .......................................18 Collaboration with the EMF ......................................................................................................... 19 VII. PORTFOLIO PERFORMANCE AND MANAGEMENT ............................................ 19 VIII. AGE:NDA FOR BOARD CONSIDERATION . . ............................... 20 TEXT BOXES BOX 1 Mauritania - A Country Profile BOX 2 Summary Economic Indicators BOX 3 Mauritania Policy Frontier BOX 4 Major Structural Reforms BOX 5 Social Indicators: Mauritania and SSA BOX 6 A Profile of Poverty in Mauritania BOX 7 Modernization of the State and Capacity Building BOX 8 External Financing Requirements and Sources, 1996-99 - Base Case Scenario BOX 9 Strategic Partnership with Mauritania BOX 10 Working Together BOX I I Proposed ESW Program BOX 12 Triggers for Bank Assistance Program BOX 13 Portfolio Performance ANNEXES AND ANNEX TABLES ANNEX I Country Assistance Strategy Matrix, 1997-2000 ANNEX Al Selected Indicators of Bank Portfolio Performance and Management ANNEX A2 Bank Group Fact Sheet - IBRD/IDA Lending Program IFC and MIGA Program, FY94-97 ANNEX A3 Summary of Economic and Sector Work ANNEX A4 Poverty and Social Development Indicators ANNEX A5 Key Economic Indicators ANNEX A6 Key Exposure Indicators A,NNEX A7 Status of Bank Group Operations in Mauritania IBRD Loans and IDA Credits in the Operations Portfolio Statement of IF C's Committed and Disbursed Portfolio This document hag a restricted distiibution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ,. MEMORANDUM OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A COUNTRY ASSISTANCE STRATEGY OF THE WORLD BANK GROUP FOR THE ISLAMIC REPUBLIC OF MAURITANIA L INTRODUCTION 1. This report outlines a set of reforms and development actions that the Government of the Islamic Republic of Mauritania (GIRv) will implement with the assistance of the World Bank, in order to consolidate the socio-economic reform program it began at the time of the previous CAS, presented to the Board in March 1994. The present CAS emphasizes poverty-reduction policies and programs through broad-based economic growth led by the private sector. It draws extensively on the findings of the 1994 Poverty Assessment and the results of the 1995 Integrated Household Survey. The content of the CAS was discussed with Government and representatives of Mauritanian civil society in March 1997, and agreement was reached on the Bank Group's strategy as detailed below. 2. A common image of - Mauritania is one of a sparsely ... 1. iMaurit..... .-..ACimtyProrde populated country, with a nomadic oion.Ao2mion, whmiinvgiunareas (9).Rapid grWth rat (2.6 pecet.a. aidpo.atons.et ..ato population, limited resources, and and urbanization:(6.090 percent) . ...... .. poor social and economic -A -Nanow EconomicBase. Anii indusiial: sector dominatd bylminiinga.n. performance indicators, and this was fisheries actiitie s,whichJtgetherprovideall export earninsgs,and a rrl indeed the case less than a decade .....setor -Swhich enplo an-estimated6 Sper.centftheaorf . ReentTT :investments inm te Senegal River Valley offer the dpotetial: for moder ago. Less well known is the fact that . agricutue and the diversific n r ion.to ck holds potntia since 1992, Mauritania has as well, butneedstob i better integated'int the moder.oinomy.. l successfully managed a major vTheEnironment.- More than90 percent of th eland: sufcisdesert.0 Ther simultaneous transition to economic iaf mtal need to#proecarmble land.(...percent f*te.total. suae) and political liberalization. From further degradati on, and frencrachment of sand dunes. f)EN evelopment ofirgation in the Senegal Rivet Valley, on the otherhand, 1992, a technically competent and m40000Enust:balance 4:economic, 00ecological and: soal concerns:: and guarantee ithe: committed economic team designed lngI-te .ovsion of a atif.ii flood for taial flood rssion and implemented a far reaching set of agriculture.- Imrved resourcem g mcludig bsurveillne-is - macroeconomic (Boxes 2 and 3) and crtical for gu rts. LAn urban areas Ithe M mot imortat issesR o: qai,y and structural reforms (Box 4), aimed at pndin aces twaer:supplyand wvaste magent liberalizing the economy, providing MiIstooanRelatons. oThefirst Banioper.ti n iaws an for fast growti of incomes and IDA credit. of US$8 millionfo r a:: Roads ectjin 1964. Since then,there improvements in social indicators. FGhave.been.48.n Groupeaions: .43 Ards, 3 ) oas d 2.. l ICivstmens, totalng UJS$616 5.million Twev I prton r As a result of these policies, public W...dyuneipeFY96 .orginal coiniitets s finances have been stabilized, aits S$603 million ban dsursements at US$483 miionU with ans structural reforms have been largely undisbs bane of.US$ 130 mil ion... ...... completed and Mauritania's GDP has Poit6ical Oulo i992, oppositmon political opartieswere leg e ad a about 4.6 percent per nrew.;Consituin 0was- 0ratified 0iin 00a 0 national reeedm f_- llowed. by. grown by bout 4.6 percent per -presidial eleios: Mauritaniatusba hefrst annum over the past 5 years. i0emberofpfth Arab League toaholddirect presidetial electons.Legislative1 Moreover, as a result of a conscious hbwelections wIereagain held in Octer 1996ad taions are at: effort to reorient public resources to hoIld presidntial elections in Januy99. uiM 9tania sheld l the social sectors, education and el-ections f s ye_and ha b ap rai Iin th health indicators have significantly conry hsedveomnt uurwIlo oltca tbiiy Mauritania CAS 2 improved (Box 5). Overall, the Government's program contributed to a measurable decline in the incidence of poverty in Mauritania, from an estimated 57 percent in 1990 to about 50 percent in 1996 (Box 6). In the Bank's annual internal performance exercise, Mauritania was considered the second-best and the best performing IDA country in the Africa Region, in FY95 and FY96 respectively. 3. Mauritania's traditional cultural ties with the Maghreb countries to the North and with Senegal and Mali in the South and East reflect a complex dual culture that is undergoing rapid social and economic transformation. At independence in 1960, Mauritania was essentially a nomadic society and only 5 percent of the population lived in urban conglomerations. Due to heavy rural-urban migration, particularly over the last decade, more than half the population now lives in urban centers. Nouakchott, the capital city, represents one third of the total population. The working population is estimated at 680,000 people, of which the modem sector, including the civil service, employs only about 60,000. Urban unemployment, a result of rapid rural-urban migration and the inability to absorb the unskilled labor force, is estimated at 26 percent. Social indicators (nutritional levels, food security, income, access to water, housing) confirm that 50 percent of Mauritania's people continue to face difficult living standards. 4. Status of the Policy Dialogue. In the course of several years of policy dialogue preceding this CAS, the Govemment has become convinced that the role of the State must change as the economy becomes more liberalized. The Government has acknowledged that sound economic management, conducted by dynamic and competent institutions, is crucial to its ability to act efficiently as promoter of economic development and regulator of economic activities. In line with its new role, the Government is committed to taking the necessary steps to strengthen its macro-economic and sectoral management capacity, rationalize and modernize its public sector apparatus, and promote the role and development of the private sector so that it can effectively become the basis of Mauritania's development. The Government's readiness to implement the needed second-generation reforms and to claim ownership of the process was confirmed at the highest levels during joint Government-Bank discussions on Mauritania's economic and social development prospects held in Nouakchott from July 10 to 13, 1995 (Journ&es soles la Khaima), and again in April 1997, during the negotiations of the Eighth-Year Policy Framework Paper (PFP) and the preparation of this CAS. II. THE ECONOMY Box 2: Summary Economic Indicators 1992 1996 Real Growth Rates Recent Economic and Social Performance GDP 1.7 4,7 Exports (GNFS) -6.5 7.0 5. Although Mauritania's economy has become Gross domesticinvestment 20.5 22.0 substantially liberalized since the early 1980s, the Gross national savings 3.9 12.3 economic structure still presents a sharp contrast Domesticosavings 7.2 13.8 between a relatively small modern sector and Consolidated Gov. Operations (% of GDP) traditional subsistence sectors. The modern sector, Overall surplus or deficit (excl. grants) -5.4 5.3 represented by mining (10 percent of GDP), Primary balance (excl. grants) -2.4 8.6 industrial fisheries (5.4 percent of GDP), irrigated Current Account Balance: (% of GDP) Excluding official transfers -16.5 -9.7 agriculture (2.5 percent of GDP) and a small but Including official transfers -8.8 -3.8 growing manufacturing sector, consisting mainly of Debt Service : Exports (DRS Data) 16.7 18.2 light industries (4.3 percent of GDP), provides direct ( a vr ). Inflation (CPL annual average %/) 10.1 4.7 and indirect employment for about 60,000 people Gross intl. reserves/imports (mos.) 1.1 2.9 only (8 percent of the working population). The rural Debt outstanding/GDP (DRS data) 176.3 214.8 sector represents 23 percent of GDP; livestock, Source: Mauritania - Macroeconomic Update 1994; PFPs, IMrnBank Stad fReview Reports rainfed and flood recession agriculture, and to a Mauritania CAS 3 lesser extent, artisanal fisheries and forestry, constitute the main components of the rural economy. Traditional livestock is a significant but unrecorded contributor to exports. Artisanal fishing has grown rapidly since the early 1990s; today it contributes 10 percent of total fishing exports and employs an estimated 5 percent of the working populati[on. 6. Restructuring the Economy (1.985-92). In 1985, the GIRM embarked on an Economic and Box 3: Mauritania Policy Frontier Financial Recovery Program designed to redress 1991 1996 imbalances and restructure the economy to rt Overall Macroeconomic Policy Stance Poor Adequate imbalances and restructure the economy to operate Fiscal Policy Stance Very Poor Adequate under free market principles. This was followed, in Monetary Policy Stance Very Poor Adequate 1989, by a Consolidation Program (1989-92) Exchange Rate Policy Stance Very Poor Adequate Trade Policy Stance Hundreds of Liberalized designed to deepen macroeconomic reforms and the NTB & QR adjustment process. Its implementation was Marketing Control on Major Exports Full None delayed by internal and external political conditions Gov. Monopolies Several None Price iControls Full None and social unrest which slowed down the Gov. Intervention in Productive Sectors Heavy Limited adjustment effort and caused a significant decline in Gov. Intervention in Financial Markets Heavy Lin'ited GDP growth. By late 1992, however, conditions Source: Adjushent in Africa, PFPs and IMFIBank Staff Reports improved sufficiently for the GIRM to relaunch the adjustment program which formed the basis of the Fourth-Year PFP (1992-94). Under this program, the Ouguiya (UM) was devalued and key structural reforms in trade, pricing, taxation, public expenditure, civil service and the social sectors were implemented. Renewed emphasis on market forces and restrained demand management policies contained inflation and safeguarded earlier gains in competitiveness. 7. On the Road to Recovery (1993-1996). During 1993-96, the reforms set forth in the PFP were pursued and macroeconomic targets were ]largely achieved. As shown in Boxes 2 and 3, continuous good progress has been made towards macro-economic stabilization in the areas of external, fiscal and monetary policies and liberalization of the economy. Major structural reforns were implemented as planned and are summarized in Box 4. Box 41: Major Structural Reforms Agriculture. Pricing and marketing have been fully liberalized; rice-mills have been privatized; land-tenure reform has been implemented in the Trarza region; a cooperative credit system has been established and rural services have been decentralized; agricultural and extension services are being provided to farmers; community-based rangeland management is being implemented. Fisheries. The marketing board and public enterprises have been privatized; a license system for industrial fishing has been implemented; and the Oceanographic Research Center and the Surveillance Unit have been strengthened with German assistance. Fishing activities have been opened to foreign operators. Mining. The SNIM has been successfully restructured and the mining sector has been opened to private investment. Transport. Port services have been privatized. Education and Health. Services have been decentralized to the regions; cost-sharing and cost-recovery policies have been implemented and access to basic social services in underserved areas has been improved. Banking. The Development Bank has been abolished; four of the five commercial banks have been privatized;0 a new banking law has been enacted and the foundations for a stronger financial sector have been established. Public Enterprises. All but 17 of 57 public enterprises have been liquidated orprivatized; subsidies and cross-debts have been: eliminated; contract-plans have been. signed with the: remaining eleven strategic enterprises. A monitoring system has beenm established and the PE sector is now a net contributor to the budget. Air Mauritania. will be restructured wi increasetd private shareholders' participation in its capital and gmt. irinsurance. The Government-owned insurance con has been priva ized. Private Sector. Measures to promote pivate sector development have been implemented in bank,ng,foreign ech tariff, pricing,: and marketing. The] GIRM has stopped: intervening ::Ein commercial: and.: industral activities,. abolished state monopolies, re-invigorated the Chamber of Cofmmerce,and has improved telecmmunications services to6the Of heworld..l Public Administration.i Recommendations of the auditbof the civil serviceI ha-ve been impleneted Ministries o RUIral Development and Educationiireorganied; oriatioia. and operao udi f the Ministriesof .Plannin, F.Inne,l ;.Fisheries and Commerce completed; Education and Health Services :decentralized; M iipal tra onlstated. Mauritania CAS 4 8. Progress in the Social Areas. Over the past decade, the GIRM has significantly increased public spending for education and health services. Education spending was increased from 4 percent of GDP in 1987 to 7 percent in 1996. Sector reforms were started in 1987 and were designed to expand access to primary education, improve the quality of primary and secondary education, reduce illiteracy, and strengthen job-oriented vocational training. These changes have resulted in a rapid increase in primary school enrollments, from 49 percent of the 7-12 year age group in 1986/87 to 82 percent in 1996/97and with a completion rate of about 62 percent in 1996 -- an important achievement. 9. With regard to health, expenditures doubled from a low of 1 percent of GDP in 1987 to 2 percent in 1996. The sector focus has been on preventive health care and access to primary care services. Primary health care received about 40 percent of ~ :Box 5: Social Indicators: Mauritania and SSA budgetary resources in 1996, significantly higher (1994) than the SSA average of 25 percent. As a result, Mauritania SSA access to primary health care increased from 30 GNP per capita (USS) 480 460 percent i 1980 to about 75 percent in 1995-96. In Ppult ilgrwtratc(%) - 2.5- addition, the Government has increasingly provided Primary enrollment, boys and girls(%) 69 71 funding for safety nets to protect the most Prmary enrollment,girls(%) 62- 64 Life expectancy at birth (yrs) 5 1 52 vulnerable groups of society. Thus, social Infant mortality rate (per 000) 98 92 indicators in Mauritania in 1994 are comparable to Population per physician 9000 those in other Sub-Saharan countries (Box 5). Source: WDR 1996, SodalIndicators ofDevelopment 10. Poverty. The results of the 1996 Integrated Household Survey indicate that, on average, poverty is decreasing in Mauritania (Box 6). Between 1990 and 1996, the proportion of individuals estimated to be living on income below the poverty line declined from 57 percent to 50 percent. This decrease was not uniform, however, and differed among regions and geographical locations. Poverty has decreased in major urban areas, including the capital city of Nouakchott. Poverty also appears to have declined among the rural populations of the Senegal river valley, a decline attributed to the existence of irrigated agriculture and the high yields in flood recession agriculture in 1995. Much of the decline in poverty is attributed to the period of sustained growth since 1992 and the shift in public spending towards social sectors and poverty reduction programs such as micro-financing, labor-intensive public works, and food aid. On the other hand, poverty in the rural rainfed and sylvopastorial areas increased from 69 percent in 1990 to 72 percent in 1996. 11. The Role of Women. Rapid population urbanization and sedentarization has had significant impact on the role of women. In rural areas, heavy male out-migration has led women to become active farmers and responsible for crops, previously the domain of men. In the cities, former nomadic women shifted from managing camp life to informal sector trading which they now dominate in the capital, Nouakchott. These occupational changes were not accompanied by skills training, however, and this has limited the productivity of these women. Male migration also led to a high number of female-headed households (FHH); in 1996, 32 percent of rural households nation-wide were headed by women. 12. To respond to women's issues, the GIRM has created a formal government structure, the "Secretariat d'Etat a la Promotion de la Femme" (SEPF), responsible for planning and monitoring improvements of the socio-economic situation of women and coordination with line ministries on specific projects. The GIRM has established twenty "Centres de Promotion Feminine " (CPF) to provide women with non-formal education, skills training and assistance in the formation of cooperative production groups. These actions are contributing to increase the literacy rate and the level of income among women. CD~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~......... ........ o- I:3 n E 4 ' CQ ..... ... .... . .. i..) X. Zs rD ~ 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~..... ~~~~~~~~~~~~~~~~~~~~~~~~~~~~. . . . . .. . . . o r . m: ..... -t ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~..... 0 CD~~~~~~~~~~~ CD~~~ 7 V A~~~~~~~~~ ~~~..j~~ ~~. ........ E'r~~~~ CA ~ ~ ~ ~ ~ ~ 0~ .. I. U) C) 9 7~ Rr~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. qm~ -.. Mauritania CAS 6 Environmental Issues 14. Increasingly aware of the negative impact of a degrading environment on economic development, the Government has identified a range of issues which require urgent attention. These include improving the management of renewable and non-renewable resources, reducing the relatively high population growth rate, and addressing desertification and deforestation issues. The Bank assisted the Government in preparing a Country Environmental Strategy Paper (CESP) in June 1994, to contribute to the Government's environmental policy-making process and stimulate the ongoing debate on environmental issues and action programs between the GIRM and its donor partners. The CESP identified three major environmental challenges: (i) sustainable natural resource development, particularly in the Senegal River valley; (ii) coastal zone and fisheries management; and (iii) urban environmental issues. Given the importance of fisheries to the economy, the GIRM is actively pursuing resource management and reinforcing surveillance in line with the recommendations of the 1992 Fisheries Sector Review. 15. The Government is engaged in a series of planning exercises designed to improve targeting of its actions to address its environmental problems. The Multi-Sectoral Program to Combat Desertification (PLMCD) covers environmental issues other than those solely related to land degradation and natural resources management. The GIRM is also preparing a National Action Program to address key land degradation issues in a more formal way. Among the key elements of this ongoing work are: (i) establishment of a legal and institutional framework for environmental management; (ii) preparation of an environmental code; and (iii) a focus on emerging urban environmental issues. These efforts together constitute the GIRM's National Environmental Action Plan. Mauritania has undertaken to implement, with IDA support under the Rainfed Natural Resources Management project, community-based natural resources management operations in the rainfed area. In addition, Mauritania has joined the regional RPTES (Review of Policies, Strategies and Programs of the Traditional Energy Sector) program that builds local capacity through a mix of policy and operational support, to review policies, strategies and programs in the traditional energy sector. Finally, the Manantali hydropower operation opens the possibility of competitive and sustainable energy along the river valley and the westem corridor to Nouakchott with the attendant reduction in pressure on traditional sources of energy. III. EXTERNAL ENVIRONMENT 16. The variability of Mauritania's economic performance in the last twelve years demonstrates the degree to which the economy remains vulnerable to exogenous factors. Of these, the most significant are: (i) fluctuations in the world prices for its principal exports: iron-ore, and fisheries products; (ii) climatic fluctuations (rainfall) and related plagues (desert locusts); (iii) international aid, given Mauritania's high dependency on aid for investments; and (iv) Mauritania's significant debt burden. 17. World prices and trade. Mauritanian economy is highly vulnerable to both price fluctuations and changes in demand in world markets. Exports of goods and non-factor services were equivalent to about 54 percent of GDP in 1996. Iron ore and fisheries products accounted for about 97 percent of total merchandise exports. Gold which is a non-traditional export, represented only 3 percent of total exports, but this was a limited joint-venture which has now ended. Mauritania is heavily dependent on fuel and food imports which accounted for some 39 percent of total imports in 1996; their price fluctuations have a major impact on the country's external terms of trade. Over the past decade, Mauritania's terms of trade declined by some 12 percent, equivalent to an annual loss of about 0.6 percent of GDP. Mauritania CAS 7 18. Climatic fluctuations. Cereals and livestock production remain heavily dependent on rainfall. Over the past decade, the country experienced two years of serious drought (1984/85 and 1991/92) with rainfall 35 to 70 percent below mean level. As a result, cereal production declined to 48,000 tons in 1984/85 and 80,000 tons in 1991/92, compared to an annual average production of 130,000 tons. These shortfalls in production were translated into increased levels of food imports and food aid. 19. International Aid/Foreign Savings. For the foreseeable future, Mauritania will remain dependent on inflows of concessional ex:ernal assistance for its public investments. To use this assistance most effectively, the Government, donors and principal creditors will need to improve further their coordination efforts to ensure that the public investment program is sound, that it supports the policy reform program, and that appropriate levels of financing are available for investment in basic infrastructure (transport), and urban and rural development. 20. External Debt and Debt Maniagement. Mauritania ranks arnong the Highly Indebted Poor Countries (HIPC) and as mentioned in para. 16, it is very vulnerable to external shocks. Mauritania's total outstanding and disbursed external debt was estimated, at the end of 1996, at US$2.35 billion, equivalent to 215 percent of GDP. Multilateral debt, including use of IMF credit, accounted for 44 percent (and IDA alone for 15 percent), bilateral debt for 48 percent, and private and short-term debt for 8 percent. Mauritania has benefited from Paris Club rescheduling under the Naples terms. Mauritania is potentially eligible to benefit from the HIPC initiative. A detailed Debt Sustainability Analysis (DSA) is being prepared jointly with the GIRM and the IMF to address the question of Mauritania's eligibility and will be completed in the next few months. IV. MAURITANIA'S DEVELOPMENT CHALLENGES AND APPROACHES 21. As shown in Section II (Boxes 2 and 3), the stabilization and liberalization processes implemented since .1985 have reversed the decline that the Mauritanian economy experienced in the 1970s and 1980s, yielding a broad budget balance, a reasonable external position, export growth, encouraging results with respect to sectoral reforms, and a reduction in the incidence of poverty. The GIRM expects to complete its stabilization program by December 1997. However, even if the improved economic performance since 1992 were to be maintained, with real growth averaging at 4.8 percent and the average per-capita income rising at 2.2 percent, the average poor person would cross the poverty line by the year 2016, and the extreme poor only by the year 2046. 22. The central objective of the next phase of the GIRM's reform program, as stated in its report on the "Journees sous la Khaima" and in its "Priorites du Developpement pour 1997-99" document (January 1997), is to reduce poverty thlrough accelerated private sector-led growth. Specifically, the GIRM has set a baseline target of 5-6 percent annual growth of GDP for the period 1997-2000. The strategy to attain this goal consists of: (i) encouraging a stronger response from the rural sector; (ii) developing basic urban infrastructure; (iii) promoting private-sector development; (iv) improving the environment for employment creation and poverty reduction; and (v) restructuring and modernizing the public sector. 23. Sustainability. The GIRM's consistent track record on economic reforms makes it unlikely that reforms already undertaken would be reversed. However, the next phase of the reform program is more complex, politically more sensitive and therefore more difficult to adopt and implement, as it would have to take into account the social segmenitation that still exists. Reforms include: (i) implementing a comprehensive rural sector strategy which integrates the livestock sector into the economy; (ii) deepening Mauritania CAS 8 private sector development; (iii) opening basic infrastructure investment to private sector participation; (iv) completing reform of the legal framework and the judiciary system; (v) strengthening public resource management; and (vi) reducing the role of the state and consequently downsizing the Government. These need to be dealt with in a strengthened democratic environment, which in turn requires a decision-making process based on consensus-building, potentially a time-consumning process. Key Elements of the Government's Strategy 24. Creating a Dynamic Rural Sector. Despite substantial public investment, averaging about US$20 million per year during 1985-96, the agricultural sector's contribution to GDP (5 percent) remains disappointingly low. Irrigated agriculture which is the beneficiary of 75 to 80 percent of publicly funded investments in agriculture has not performed as expected. Development has been very costly, yields have been low, though improving, and the economic rate of return for irrigation investments continues to be below acceptable levels. Several problems facing the agriculture subsector have been jointly identified by the GIRM, stakeholders, the Bank and donors, including: (i) inadequate support of the poor and uneducated rural population by extension and research services; (ii) lack of access roads; (iii) inefficient credit mechanisms; (iv) inadequate market structures and pricing policies; (v) unsecure land tenure systems; (vi) lack of inter- and intra-sectoral linkages; and (vii) a relatively weak private sector focus on irrigated agriculture. Due to low and erratic rainfall and to recurrent drought conditions, rainfed agriculture continues to produce low yields (0.3-0.6 mt/ha), while attempts to increase oasis production by pumping more water has led to severe depletion of ground water. The country, therefore, remains dependent on commercial imports and food aid to satisfy demand. 25. The livestock sector, contributing an estimated 15 to 20 percent of GDP, is undergoing significant changes, although it continues to operate outside the formal channels of the economy. With increased settlement density in the southern areas, livestock is increasingly competing with agriculture for limited land and water resources, needed both for good pasture and for cropland. There is, therefore, a widely felt need for broader application of irrigation and water harvesting and management techniques, maintenance of water points, pasture improvement technologies, and marketing practices. These issues, as well as the need to satisfy increasing urban demand for meat and milk are being considered in the development strategy for the rural sector. 26. It is clear that, if the rural sector is to become a major source of employment creation and income generation, the issues defined in the preceding paragraphs must be addressed. The GIRM, with Bank and donor assistance and with active participation of stakeholders and NGOs, is developing a comprehensive rural development strategy and program with two key objectives: (i) to diversify and accelerate competitive agricultural growth; and (ii) to integrate the livestock sector into the economy. 27. Developing Infrastructure. Rapid urbanization has not been accompanied by sufficient investments in urban and rural infrastructure, hence the emergence of slums around the major cities and the isolation of most rural areas. A large part of the urban population suffers from low living standards with very poor access to basic services such as roads, water, sanitation, electricity, and waste disposal services. SONELEC, the water and electricity company, is responsible for the provision of these two utilities throughout the country. Despite significant tariff increases, SONELEC's performance remains weak, with significant technical and non-technical losses, low billing rates, and high production costs. Service delivery for water is inadequate, and the poor who are not connected on the water network pay up to ten times more per liter of water. Moreover, in order to supply electricity to the 13 regional capitals and secondary cities, SONELEC has been cross-subsidizing electricity prices. Opening public utilities Mauritania CAS 9 (telecommunications, water and electricity) to private sector investment is clearly indicated in order to improve coverage and quality of services to an increasing population, at affordable prices. 28. A new urban development policy has recently been adopted. The main objectives of this policy are to strengthen the technical, managerial and financial capacities of local government in order to halt the deterioration of existing urban infrastructure, to improve and expand basic urban infrastructure to include specific programs which promote private sector investment in this area, and to better clarify the interface between public and private sector investments. 29. Promoting Private Sector Development. The supply response to the reform measures (Box 4) has been slow and disappointing. In the 1992-96 period, private investment, including the PE sector, averaged about US$151 million per annum (15 percent of GDP), of which foreign investment amounted to about US$6 million per year. These weak results are mainly due to the inconsistent application of a strong and clear private-sector regulatory framework, a judiciary which is neither independent nor reliable, a lack of dynamism of the banking sector who finances mainly short-term commercial operations and charges high transaction fees, and the inexistence of a sound financial intermediation system that could mobilize private savings. In the absence of a strong and consistent regulatory environment, some oligopolistic commercial blocks were created. Moreover, the lack of a well developed and maintained transport infrastructure across the couniry, with roads being constantly obstructed by sand encroachment, the inadequate supply of skilled labor, high freight costs and one of the highest public utilities tariffs in the region are serious constraints to both agricultural growth and development of the private sector. Equally, a complex and distortive tax system, highly dependent on trade and production, does not make Mauritania a competitive environment for long-tenm private investment. Recognizing that these obstacles must be removed if the private sector is to become the engine of growth and employment creation, the GIRM is improving the regulatory and fiscal frameworks and plans to reduce factor costs, expand access to vocational skills development, and make the public administration more responsive to private sector needs. 30. Improving the Environment for Employment Creation and Poverty Reduction. Since 1987, the GIRM has made significant efforts to promote human resource development and has implemented targeted programs designed to alleviate poverty. This strategy has resulted in the creation of approximately 4,700 permanent new jobs per year between 1992 and 1996. The GLRM's strategy for the development of artisanal fisheries, aiming to create jobs and increase fish consumption, has resulted in a significant gain in employment, from about 10,000 in 1991 to about 60,000 in 1996. However, the high level of urban unemployment remains a critical poverty-related issue that demands further determined action. As shown in Box 6, there is evidence that the incidence and depth of poverty is much greater in rural than in urban areas; this explains in part the high levels of rural-urban migration and the growth of slums around the major cities. The strategy adopted to increase employment and reduce poverty centers around five axes: (i) accelerating economic growth and improving targeting of the extreme poor with specific interventions; (ii) encouraging private sector development as the primary source of employment creation; (iii) restructuring public expenditures and shifting resources toward education, training, health and nutrition services so as to enable the poor to increase their productivity; (iv) providing the poor with access to productive employment through labor-intensive public works; and (v) developing basic physical infrastructure to help raise living standards. 31. Restructuring and Modernizing the Public Sector. Despite encouraging results from structural reforms, downsizing of the para-public sector, and decentralization of some Government services and functions to municipalities , the GIRM's institutional apparatus has not yet adapted to its new role of Mauritania CAS 10 regulating economic activities and promoting poverty reduction in a Box 7. Modernization of the State and Capacity Building market-oriented economy. The GIRM With the first-generation reforms, GIRM concentrated its efforts on is aware that an inappropriate stabilization:and structural adjustment. Since 1991, GIRM has also been. institutional framework,. weak working towards modernizing- the State and developing local capacity to Sstltutlonal rrmeworK, weaK 1sustain the reformiprocess:-' l administrative capacity, and a civil sAin tccourntable State. Open municipal and legislative electioris have service that is reluctant to adopt up-to- been held periodically as mandated by the country's constitution :The date work practices and lacks civil '-society is organized in several political parties actively accountabili.y, have contributed to participating in the political arena. This has increasingly subjected state officials to public scrutiny. inefficiencies and mismanagement of | - . -State and Private Sector environment. Their relationship is evolving public resources. This has also from one of control to a partnership. contributed to restraining the i Regulato.y framework. The GIRM has ratified the New York development of a dynamic private | - convention on international business arbitration, and is in the process of ratifying the Vienna and the Hague conventions on sales and .contract sector and has led to an expansion of l - - - dispute settlement It is also revising the commercial code, comnercial the informal sector which currently and civil procedures, contract code, bankruptcy rules and arbitration, employs about 200,000 individuals. law. -.The judiciary system is being reformed and judges are being The GIRM is convinced that its central trained in modem business laws. objectie to r c p A Central Bank, which is independent and has fall authority in the objective, to reduce poverty through g - conduct of monetary, credit and foreign exchange policies as well as accelerated growth, needs to be banking supervision. accompanied by institutional and | Civi7 service.: Reforms. covering operations,- career streams and administrative reforrns that refocus the inprovement in the legal status of civil servants have already been: role of the State, remove inefficient and introduced. . Payroll control and management has been strengthened. -Traiing programs in economic management are being implemented forI arbitrary regulatory checks and the civil service. balances, further decentralize planning | Adapting the state apparatus to the needs of a market econom - and management of public services, Operational and organizational audits of core economic institutions and build a strong partnership betwen .have been conducted and as a result, restructuring of the Ministries of: Planning, Finance,- Fisheries,':Comnerce 'and Mining are planned the State and the civil society at large. during 1997-98. For this reason, the GIRM is pursuing * Administrative deconcentration. The services of the Ministries of. an ongoing program of reform and Rural development, Education and Health have been decentralized in restructuring of the public |-.-order to bring them closer to the population. administration in close coordinatIon * Decentralization to local govenment and communities, wbich is adninistrafion in close coordnafitons creang new opportunities for riore competitive and efficient provision: with both the civil society and its of public services, and for managing local infirastructure. development partners (Box 7). V. ECONOMIC OUTLOOK 32. As stated in the Eighth-Year PFP (1 997-99), the Government's strategy for the medium-term is to improve living standards and reduce poverty through the creation of an environment conducive to private sector development, and through broad-based, sustainable economic growth. Further progress in overcoming Mauritania's economic problems over the medium-term will critically depend on sustained implementation of sound macro-economic policies, deepening of structural reforms, and a build-up of institutional capacity in key Government services. 33. Baseline Scenario. A conservative forecast shows that in the short and medium-term, growth will continue to stem mainly from the mining, fisheries and construction sectors while the services sector will modestly increase its contribution in the early years. In line with this, the macro-economic objectives for 1997-99 comprise: (i) attaining an average GDP growth rate of 5.2 percent; (ii) stabilizing inflation at Mauritania CAS 11 about 4 percent; (iii) narrowing the Box 8: Ete inancng Requements external current account deficit, excluding and So s, 1996-99- BaseHiCase Scenario official transfers, from 9.7 percent of G.DP s ilo) in 1996 to 4.6 percent in 19i99; 196- 1997 M9 199W (iv) increasing the Central Bank's Es. Po.Prj rj interational reserves to cover 6.1 monts Tohts - eWrenen 3327,7 320.2 2 2 of imports by 1999; and (v) consolidating ..(exc.all officaltrafers); l the fiscal position by reaching a budgetary -te debtamorization due (PFP data) 83.5 89.7 90.2 93.7 surplus, excluding grants, equivalent to M r rases Increase in gross official: reserves:: ~ 60.5 890 56.4~ 63.,6:: 3.8 percent of GDP. During this period, Arasedcin65.8 67. 0.0 0D0 the GERM will continue to pursue fOffcial ttansfers payni1.7, 2.9 2.8 2.9 appropriate macroeconomic policies and Totl Resources :327.7 .320.2 230. 228 .7 start undertaking the next phase of its O4ficialtransferreeipts-66.8 81.8 83.1 54.0 reform programs. Core actions will also Net diret foreign investment 04 -30 ... 0 .0 0 .0 focus on further strengthening of IMF. pcs 2 20.5 19 19. economic management and modermization .ase in gross of.cil.... r 0 .0 00 0.000 Other cptal (net) vi 73.5 28.0 75 3. of the public sector apparatus. Acumulationa of ars 0,0 0.0 0.0 0.0 Debt reie obtained 99.9 33.4~ 0.0f :0.0: 34. High Case scenario. This F g 2 0. 104.5 55.2 84.9 gS /ncludes net short-term capital (net trade credit +,net ifabiitiesof anking indicative scenario shows the outcome system anderrors an sions from consistent implementation of good 2/Assumd &o b efille th debtreletndyofcialblatoeralcrtors ndd development strategies and econornic borowing on highlycanes/anal tes policies in the rural, financial and prnivate sectors, as well as continuous and strong public resource management which will be much needed given the increased availability of financial resources arising from the fishing agreement with the Elr as well as counterpart funds from adjustment operations. Private savings and investment should significantly improve in response to, inter alia, deregulation of the mining and public utilities sectors. In this scenario, it is also expected that private investment will significantly increase in public utilities, rural and manufacturing sectors. The fisheries sector is also expected to attract higher levels of private investment, although it is recommended to closely monitor this activity to avoid over-exploitation that could deprive the country of an important source of revenue. In contrast to historical trends, growth will almost certainly involve substantial structural change. In line with the above, it is expected that GDP growth rate would r each about 7 percent as a result of: (i) the above mentioned sector strategies; (ii) higher public and private investment; (iii) higher productivity of investment as measured by the incremental capital output ratio (ICOR); and (iv) lower Government consumption. VI. MAURITANIA-BANK GROUP PARTNERSHIP 35. The 1994 CAS for Mauritania had the following core objectives: (i) to develop human resources and reduce poverty; (ii) to promote private sector and support agriculture and infrastructure development; (iii) to strengthen economic management capacity building to consolidate adjustment, deepen policy reform, and achieve stabilization; and (iv) to ensure development is environmentally sustainable. A number of these objectives, such as the coverage of basic education, internal and external deficit, inflation, and reserve targets were quantified. As previously described, substantive objectives of the 1994 CAS were largely met and in some cases, performance targets exceeded: the economy sustained an average annual growth rate of 4.8 percent, deficits were dramatically reduced, inflation was lowered and reserves were built up (see Box 2). Significant progress was made in the areas of human resource development, Mauritania CAS 12 poverty reduction, public expenditure management, civil service reformn and Box 9. Strategic Partnership with Mauritania regulatory framework as mentioned in Mauritania's relationship with IDA over the past 5 years has matured Section II (see Boxes 5 and 6). l into a true partnership characterized by a frank, wide ranging and l constructive dialogue of the development agenda. l . Critical to building the foundations to'this relationship has been the Lessons Learned | - joint analytical work of two Public Expenditure Reviews, key economic sector work in the areas of fisheries, banking and public 36. Notwithstanding the sound enterprises policy reform programs, and the consensus building for macroeconoric fundamentals, private civil service, education and health sector reforms. sector and agricultural supply responses § . Equally important-has been the intensive, tri-partite dialogue with I .: the Bank and the IE in the context of the last five PFPs that have have been lower than expected. been negotiated and implemented since 1992. Nevertheless, reforms supported by the l The successful 1994 Consultative Group meeting and more Public Enterprise and Private Sector importantly, the joint preparatory work of the Bank-Mauritanian Development SECALs, and the Public § - .team have deepened this partnership and extended it to a number of other critical development partners, i.e. the EU, the UNDP, France, Resource Management Credit (Box 4), Germany, Japan and Arab donors. have laid the foundation for stronger . IDA fmnanced credits have increased the involvement of private supply response. For instance, the beneficianres in tlhe: preparation, design and implementation of revision of the Mining legislation | -projects. This has been particularly notable in the water sector, I social services and rural development projects. For instance, the. supported by the Pnrvate Sector l Rainfed Natural Resources Management Project (FY97) has been. Adjustment Credit, has already led to prepared with local community and beneficiary participation in the signed agreements of US$20 million in process leading to the negotiations that were held in Nouakchott. purchases of mining permits by private | . - The Resident Mission's outreach program has been enhanced; links to the active NGO community have been strengthened with the investors. Similarly, efforts in support of | recruitment of an NGO Liaison Officer; contacts with the press have rural development have drawn on the been increased to provide accurate information about the Bank achievements and lessons of the program; and a Public Infonnation Center has been established. Agricultural Sector Adjustment Credit { - - The Mission is also publishing, as agreed in the 1994 CG, a quarterly "tableau de bord- and is planning a periodic information and Agricultural Services Project, as well l bulletin, and holding an annual open house. as efforts by other donors. Our support to T The culmination of this partnership have been the discussions this sector is now better targeted at the regarding the strategic agenda with key decision-makers and the. poorest rural populations, and builds on | civil society of Mauritania. In July 1995, the Bank team held the "Joumnes sous la Khauma", a high-level retreat to discuss community empowerment. In the River Mauritania's economic and social:development challenges. This Valley development, our strategy supports 'was followed-up in 1996 and early: 1997, during the CAS rehabilitation and intensification over preparation. extension of irrigated land. Building on The Mauritanian authorities and the Bank have agreed to conduct in- pastexperie ,we are increasing support country reviews of this CAS for 1 997-2000 on an annual basis in order past expenence, we are increasing supportIto validate the strategy, measure progress made in achieving the goals and services to the rural populations set at the beginiing of this CAS (sunmnarized in Annex I) and, if through land tenure, credit, farmers' necessary, fine-tune the CAS to better respond to changes in priorities. organizations, extension and research, and rural infrastructure. These efforts will lay the foundation for more focused, sustained and rapid supply response from the rural sector. Whereas human resources development has been successful in extending coverage of basic education and health, such that Mauritania can aspire to full basic education by the end of the century, the effort over the next phase must shift to quality and relevance. In particular, the vocational, technical, and professional education sectors will take a more integrated, sectoral approach over the present inter-agency fragmentation. Poverty monitoring and the most successful targeted poverty reduction programs will be pursued. 37. The Bank's assistance has been highly relevant in supporting Mauritania's efforts towards stabilization and structural adjustmnent. The effectiveness of the Bank's support has varied among sectors. Mauritania CAS 13 It has been high in the case of adjustment operations and highly technical sectors, i.e. fisheries, banking, Boxl10.Workig together- public enterprises, while in the case of less technical The main lessons learned fothe implniono areas subject to policy changes, i.e. civil service the 1994 CAS indicate that to achieve our goas,it is necessr o h akta o reform, a stronger and more continuous Bank presence - dtem effort touild understnding may have led to better performance. Overall, the ofd rcfons and icomm itmetothese, :atboth the Mauritanian authorities consider that the efficiency of political and adinisivetlevels; the Bank's direct assistance and its active participation assessbetterthesequencing andtiming of refos; . . . i ESi :~~~~~~~*work with our3 Martan ounerats ias a -teama;gE-l- in the mobilization of other donors to support ensure a good icoorintion ;Mwith theIWFan donors.l Mauritania has been highly satisfactory. from the begmnin., and l ounertakeclosew supervision ...in...pa ip with 38. For the period 1997-99, the GIRM has asked lclatoiis the Bank Group to support its elforts towards ...These....lessons. have..defined our soerni.in M auritania. .. .... ....... achieving poverty reduction through accelerated ......._____________________________ private sector-led growth. The Bank's strategy is shifting from stabilization and adjustment to one that will assist Mauritania in moving beyond the anticipated baseline growth scenario so that it may achieve a higher, sustainable and equitable growth, create employment and thus reduce, in absolute terms, the number of Mauritanians living in poverty. The Bank is fully in accord with the GIRM's strategy which emphasizes private sector development, more dynamic growth in the rural sector, and improvement of employment opportunities in order to reduce poverty. All actions in the areas stated below would involve systematic client/beneficiary consultations as well as close donor coordination, which is crucial for the success of the second-generation reform program. A detailed matrix linking Bank Group objectives and instruments is provided in Annex I. 39. During the post-stabilization period, Economic and Sector Work (ESW) and non-lending products will become increasingly important in assisting the . B...x .. .Proposed .ESW ogra GIRM to identify new sources of growth, accelerate CORE SCENO . G SCENRIO growth in sectors with high growth potential, ..Rual.ecor.traeg Cor.sc.aro.pus enhance overall economic management, improve . Livestock.Sector . Export Markets mobilization and allocation of resources and reduce iiAtisan Fisheries * Te Education and poverty (Box 11). We will continue to be selective in :iEDevelopment' Lb or: Makts our focus and provide investment resources to PER : - ties on R -ional Fianil etoin ....t... overcome cntical bottlenecks as descnbed below. In ......Development Manufactrn Secto this endeavor, we will work closely with the GIRM, 4.:Prfivate secior ICpation StifudyS donors, NGOs, the private sector and the civil society inSees Delive .... . at large. We will also endeavor to disseminate our (telcom., elctricity, ESW/non-lending products and -to improve -. i and Regulatoi communication with the populationri regarding Refot rm economic policy reforms.DfetTxRor Ali: H ealthf Secto iPolic y ..... . . . Areas of Intervention 40. Macroeconomic Stability. During 1997-99, the Bank Group will continue to assist the GIRM in maintaining and consolidating macroeconomic stability. The key features of the Bank Group intervention will be: (i) continued macroeconomic monitoring and frequent high-level consultations with the GIRM through the PFP, mid-term reviews and supervision missions; and (ii) continued support, together with the EMF and the EU, for improving public expenditure, external debt and foreign exchange management. Mauritania CAS 14 41. ESW Together with the EMF, we will assist the GIRM in its implementation of its direct and indirect tax and tariff reforms and in revising the macroeconomic model to simulate the sources and effects of different growth scenarios as input into our macroeconornic dialogue. We will support the GIRM in the preparation of its FY98 PER and its FY2000 Poverty Profile. 42. Lending. Based on the assessment of the tariff and the direct tax reforms, we would consider an adjustment operation to offset the GIRM's revenue losses incurred from implementation of these reforms. 43. The Rural Sector. The rural sector is the largest and potentially the most critical area for private sector intervention, and is the main source of employment. If accelerated growth is to occur in the Mauritanian economy, rural sector activities must necessarily play a major part. The principal elements of our strategy would therefore be to assist the GIRM through ESW and lending, and in cooperation with France, Germany and the European Union, in order to remove the bottlenecks identified in paras. 25-26. 44. ESW The centerpiece of our support for accelerated, diversified and sustained rural development is the ongoing preparation of a Rural Sector Development Strategy. In FY98, we plan to build on this strategy and establish an analytical framework that effectively links all rural development activities and integrates the livestock sector to the rest of the economy. Our program for the agricultural sub-sector will include ESW on: (i) non-farm linkages and opportunities for growth; (ii) rice and rainfed sub-sectors; (iii) marketing channels; (iv) market-oriented crop diversification and technological transformation; and (v) the delivery of rural services. As for integrating the livestock into the economy, ESW will assist in identifying the inter- and intra-sectoral linkages of this subsector as well as more appropriate roles for the public and private sectors in veterinary research, extension and technological innovation to improve production, processing and marketing of livestock products. As for the environment, we will support biodiversity conservation and sustainable management of the natural resource base. Given the growing importance of artisanal fishing as a source of employment and economic growth, we will assist the GIRM in preparing a comprehensive development strategy for this subsector. 45. Lending. The above analytical framework will form the basis of a sectoral investment program for FY99-2000 and will support the objectives of private sector development, poverty reduction and environmental protection. In later years, depending on the above ESW and lessons learned from the ongoing Agriculture Services Project (FY94), we plan a follow-up operation in rural services. We will support the multi-donor investment prograrn for the rehabilitation of irrigated agriculture and the provision of basic rural infrastructure in the Senegal River Valley through the PDIAJM, a project we could present to the Board in FY98. In the livestock sub-sector, we will support the reform of pasture and rangeland management through the PGRNM project which is being presented together with this CAS. Based on the results of the artisanal fisheries' development strategy, we would consider supporting a project in FY99 to provide the infrastructure and services to this sub-sector. 46. Infrastructure and Urban Development. Given the importance of basic infrastructure to improve living standards and the competitiveness of the Mauritanian economy, we plan to help the GIRM to maintain and expand its infrastructure services through enhanced public sector management and the refocusing of public investment in the infrastructure sector. An important focus of the strategy will be the provision of basic infrastructure for the urban poor. We will continue to work with the GIRM and donors in the preparation of sound investment programs for water, sanitation, electricity, telecomrunications and roads, and promote the adequate allocation and efficient use of resources for basic infrastructure. 47. An urban development strategy has been agreed upon with (central and local) government. The Urban Development and Decentralization Project, currently under supervision, is a first milestone in this Mauritania CAS 15 strategy. The main objectives are to help municipalities: (a) improve management of their expenditures by providing them with simple tools to identify priority needs in terms of municipal services and infrastructure; (b) improve their technical and financial management while capitalizing on ongoing initiatives by other donors; and (c) provide a line of credit to the central government with mandatory local counterpart funding to finance some priority services and infrastructure. In parallel, reforms on inter- governmental transfers and local taxation are sought through an operational study and a subsequent action plan to be implemented in the second phase of the project. The other benefit of the project is the stimulation of small-scale public works contractors and employment generation through contracts financed under the project and managed by AMEXTIPE. It is hoped that the impact of the project will be further strengthened by the participation of other donors attracted by a coherent framework for municipal investments. 48. ESW. In public utilities, we will continue to work with the GIRM to resolve the remaining contracting issues affecting public utilities, and private participation in the production and delivery of these utilities. We will organize workshops in Mauritania to openly discuss, with the authorities and the private sector, the county's needs in public services and the private sector's role in their producton and delivery. We plan to prepare a new energy sector development policy and strategy (power, petroleum products, renewable energy, household energy) based on opening up the sector to private sector involvement in investment, ownership and management. 49. Lending. Based on ESW, we plan to prepare a second urban sector development operation in FY99, which will support further decentralization, strengthen municipal resource mobilization and management, and upgrade the urban environment (water, waste, housing, electricity), especially in poor peripheral neighborhoods. Efforts will be made to promote private sector involvement in the expansion of these services. An OMVS multi-donor regional power project, designed to provide Mauritania with a reliable source of low-cost power will be ]presented to the Board in FY98. We are also preparing, with a number of key donors, a second water project which will identify the most cost-effective and environmentally sustainable solution to Nouakchott's current and projected demand for water. The transport sector is adequately supported by the EU and Arab Development Funds and we do not foresee a financing role for IDA, except for policy advice or where critical rural bottlenecks (feeder roads, access bridges) remain to be removed. We would consider preparing a rural infrastructure project in FY2000. 50. Supply Response from the Private Sector. Recognizing that private sector activity is critical to poverty reduction, income generation and employment opportunities, our strategy is to promote a strong supply response. To implement this strategy, we intend to use a combination of ESW and technical assistance, supplemented by IFC services and lending and by MIGA advisory services. Our actions will aim at removing barriers to competition and factor mobility, by improving the legal and regulatory environment, streamlining tax regulations, facilitating access to services and credit, exploiting new market opportunities, developing financial intermediation, lowering production costs, and increasing private sector participation in the delivery of public services. We will also assist the GIRM to attract foreign direct investment (FDI) to upgrade, diversify and raise the technological base in the rural, fisheries, mining and public utilities sectors. 51. ESW. The findings of a recent study on financial intermediation will be used to address concerns regarding access to credit by small and medium entrepreneurs and the poor, and in linking interrelated issues between the regulatory/institutional framework, the financial sector and private sector development. Complementing an ongoing study on commodity transport costs, we plan to. undertake a major Private Sector Profile to identify the remaining; disincentives that prevent a vigorous supply response and Mauritania CAS 16 economic diversification. We will assist the GIRM in defining a regulatory framework that opens up and encourages private sector participation in the provision of telecommunications, electricity, water and infrastructure. We intend to continue to coordinate with MIGA, IFC and the African Project Development Facility (APDF) to identify investment opportunities, promote small and medium enterprise development, and provide technical assistance and advisory services to the private sector. In this respect, Mauritania has become eligible for the IFC Small Enterprise Fund (SEF). 52. Lending. The ongoing Private Sector Development TA Project supports this strategy. No new Bank lending is foreseen. The IFC is expanding its operations to the fisheries and banking sectors and intends to intensify its activities in Mauritania. 53. Restructuring and Modernizing the Public Sector. Our strategy in this area is to assist the GIRM, together with France, Germany, the IMF, the EU and the UNDP, to build an efficient, market- onented public sector apparatus, practice sound economic management, and efficiently deliver essential social services and basic infrastructure. The ongoing Public Resource Management Credit (FY96) and associated capacity-building programs support this strategy. No new lending is foreseen. 54. ESW. Together with France, Germany, the IMF, the EU and the UNDP, we will continue to conduct ESW and provide technical assistance on two important fronts. First, we will work towards improving economic management, including tax and tariff reforms, public expenditure management, and fiscal decentralization. In addition, the two PERs carried out by the Bank have highlighted the need to improve resource mobilization, refocus public investment and target the delivery of social and public services more effectively. We have agreed, therefore, to provide guidance to the GIRM in carrying out its own PERs, and assist in making these an integral part of the budget process. In addition, to modernize the administration, we will support the ongoing restructuring of the Ministries of Planning, Finance, Fisheries, Commerce, Mining and Industry, and Rural Development, and assist the GIRM in its efforts to implement administrative decentralization at both central and municipal levels. Annual portfolio reviews will be carried out to help identify bottlenecks in the Public Investment Program (PIP) implementation which will be an important instrument for increasing Mauritania's absorptive capacity even beyond the Bank Group financed operations. 55. Employment Creation and Poverty Reduction. In the area of employment creation, we will support the GlRM's labor-intensive public works and micro-enterprise programs and will continue to work with the Chamber of Commerce, the Federation of Employers, the ONS and the NGO community to increase the relevance of training in accordance with the signals of the labor market. We will support programs to raise the skills of the labor force, in particular for the rural and artisanal fishing population, in particular for women. Our strategy in the education sector is to achieve full primary enrollment by the year 2000, improve the quality and relevance of secondary and higher education, strengthen job-oriented vocational training, encourage private sector participation in the financing and delivery of training services, and promote efficiency in the allocation and use of resources. In the health sector, we will support expansion and quality improvements in the delivery of primary health care services, including family planning, maternal and child care, infectious disease surveillance and nutrition. Together with sustained growth, these actions should contribute to a significant reduction in poverty. 56. ESW We will strengthen the GIRM's capacity for poverty monitoring and analysis by concentrating on vulnerable groups that have not benefited from Mauritania's recent growth. 57. Lending. We are preparing a health sector investment program for presentation to the Board in FY98. This project will pay particular attention to the strengthening of health sector capacity and the Mauritania CAS 17 ongoing process of reform, aining aLt the provision of a cost-effective package of health services, improvement of service quality and efficiency. Depending on the results of the ongoing ESW in education and training, a program to restructure higher education, to improve access and quality of secondary education, and to strengthen technical and vocational training would be considered in FY99. 58. Gender Focus. We will ensure that the situation of women is fully taken into account and reflected in our ESW and in the design and implementation of investment operations. In our projected lending program, we will pursue opportunities to include gender-specific activities, particularly in the education, health, agriculture and rural, development and urban sectors. In the rural sector, the ongoing Agricultural Services project is providing women farmers with extension services and information for garden production through recruitment of specialized agents. The lessons learned have been built into the Rainfed Natural Resources Management project where investment decisions are explicit about considering benefits to women who participate in the Community Development Associations. Also, the future Valley Development project will safeguard women's access to land and credit. In the water sector, a UNICEF- designed, innovative and highly successful program of management of public standpipes by women (cited as best-practice at the Istanbul Habitat Conference) has been incorporated into the IDA supported ongoing Water Supply project. The Social amd Gender Analysis (SAGA) initiative will be implemented in cooperation with EDI, with the aim to increase the participation of women in the farming and livestock sectors, the provision of adequate extension services, and improved access to land, credit and other inputs. Proposed lending program 59. The base case assistance scenario corresponding to a lending program of about US$90-110 million is described in the preceding Section (VI) and summarized in the matrix (Annex I). 60. Triggers. A high and low case assistance package, differing in content and projected resource transfers has also been discussed in Mauritania. Movement away from the base case will be triggered by a combination of all or some of the four sets of events below (summarized in Box 13). 61. A high case assistance scenario assumes that the remaining but ongoing agenda items such as the attainment of universal primary education are completed. Under such a scenario, it is projected that the economy will generate new requirements which will need to be met at an earlier date. In addition to the base case assistance, IDA would support the country in secondary and higher education sector reforms that will improve quality and efficiency and create an effective bridge to the labor market. The main goal would be to reduce poverty by 12 percent over three years, compared to the base case scenario of only 8.5 percent. We would further support irnprovernents in urban infrastructure, especially in secondary cities. Significantly more ESW and non-lending dialogue would be conducted to support the new lending operations. Under this scenario, we will promote more active participation of IFC and MIGA in order to increase the level of Bank-Group lending to about $ 110-160 million. We have assessed at 50 percent the probability of reaching this scenario over the next 3 years. 62. A low case assistance scenario, triggered by slippages in the trigger points below has also been developed. It would result in a drastically reduced assistance program focused essentially on human capital development and targeted poverty reduction. It is proposed that we would focus primary education with a special emphasis on girls, nutrition issues and labor-intensive public works programs in secondary cities. IDA's contribution to the government's on program would be in the $35-45 million range. Given Mauritania's track record over the past 5 years, and the authorities' commitment to reforms, such a scenario is given a probability of less than 25 percent. Mauritania CAS 18 Box 13: Triggers for Bank Assistance Program HIGH BASE LOW Macroeconomic . Efficient and diversified revenue base Compliance with macroeconomic . Narrowing and concentrated revenue fundamentals Efficient and effective management and targets set out in the PFP base allocation of public resources B Iroad-based efficient and diversified . Decline in the quality of public resource revenue base management and allocation Efficient and effective allocation of public expenditures Social indicators . Primary enrollment ratio > 90% or Primary enrollment ratio >82% . Decline in primary enrollment ratio higher Vaccination rate 65-70% <80% . Vaccination of children <1 year >75% * Vaccination rate <65% Private sector response . Implementation of tariff and direct tax . Percentage increase of private . Percentage increase of private reform investment to GDP ratio 5% investment to GDP ratio 1I%/ : Opening of telecomm., water and N Number of files entered in credit risk . Number of files entered in credit risk electricity to private investment and arrears information system: 200 per and arrears information system: 150 per * Full implementation of agreed judicial year year and regulatory reform . Implementation of TVA reform . Eliminate obstacles for entry and factor mobilization in transport activities Portfolio performance . Problem projects = 1 or none . Problem projects = 2 * Problem projects > 3 and absorption . Disbursement ratio for projects <15% * Disbursement ratio for projects 15-20% . Disbursement ratio for projects <20% IFC and MIGA Activities 63. IFC has ongoing operations in agribusiness and fisheries. It has approved an equity participation in one bank (GBM), the extension of credit lines to two banks (GBM, BMCI) and is also considering possible investments in other commercial ventures (e.g. fish processing, furniture, leasing company). Although MIGA has not issued any guarantees in Mauritania, there is one preliminary application for coverage in the manufacturing sector. Mauritania has participated in all Annual African Mining, Investment and Business Opportunities Symposium organized by MIGA, and has indicated that it will participate in the next Annual Symposium to be held in June 1997. Aid Coordination 64. The Govemrnent's structural adjustment program has been supported by the Bank through a 1987 Structural Adjustment Loan (SAL), the 1990 Public Enterprise and Agriculture SECALs, the 1995 Private Sector Development SECAL and a 1996 Public Resource Management Credit, as well as through IDA-financed sector investment operations. Reforms were also supported by two IMF Enhanced Structural Adjustment Facilities (ESAFs) approved in 1992 and 1995, respectively, and under programs supported by the European Union, France, Germany and Japan. Mauritania's investment programs have also benefited extensively from external assistance provided by the Bank, the EU, the AflB and the UNDP, as well as France, Germany, Japan, Italy, a number of Arab Development Funds and the OPEC Fund. A Consultative Group (CG) meeting took place in May 1994. Donors and the GIRM agreed to strengthen aid coordination in light of the large role external financing plays in the PIP. The Group agreed to hold CG meetings every three years and to adopt new coordination measures for systematic information sharing and periodic reviews of the PIP. The next CG will be held in March 1998, after the presidential elections. 65. While interaction on a project-by-project basis with NGOs has been part of the Bank's practice, we are now increasingly coordinating our programs with national and international NGOs and are pursuing more detailed sector-specific initiatives to enhance this collaboration. 66. Collaboration with key bilateral donors, in particular, France, Germany and Japan and a number of Arab Development Funds is excellent, particularly with respect to issues pertaining to management of the Mauritania CAS 19 overall assistance program and support for specific sectors and operations. IDA also closely coordinates with the EU, AfDB, IFAD and other key UN agencies in the context of specific programs. We will continue to coordinate closely with Mauritania's development partners through regular consultations to ensure the timely implementation of policy reforms and the availability of funding for investment operations. The Resident Mission plays an active role in ensuring donor coordination in the field. Collaboration with the IMF 67. Since 1987, staff of the Bank and the IMF have worked effectively as "a team". This has led to common agreement about the course of the macroeconomic and sectoral reform programs in Mauritania. There are no outstanding issues between the Bank and the EMF regarding the scope and emphasis of the second-generation reforms and the macroeconomic policies that Mauritania should pursue during the medium-term. VII. PORTFOLIO PERFORMANCE AND MANAGEMENT 68. Portfolio Description. The relatively problem-free Mauritania IDA portfolio Bo 12. portfolio Pance of 1 active one of which ~~~~~~~FY94: FY95 FTY96 consists o12 acieoperafions, Numbr ooProect 11 4 h has closed but is still disbursing. These Commitminent value (U miIlo 190 262 229 include two adjustment operations (Private Q%:of IP-and or DO prblem prct.ject 9 7 8 Sector Development Credit, the third and last Disburements (US milion) 31 17 40 Disbuirsements as %lof undisbursed balances: 15 16.1 :16.5- tranche of which was released in March 1_97, i and the Public Resource Management Credit, approved in June 1996). There are nine investment operations in the social, agriculture, and infrastructure sectors, and a TA project for private sector development. Current IDA commitments amount to US$185.1 million with an undisbursed balance of US$94.0 million as of end-April 1997. 69. The performance of the portfolio remains basically sound. The percentage of problem projects (combined Implementation Progress (IP)/Development Objectives (DO) rating) declined from 9.1 percent in FY94 to 7.7 in FY96. However, preliminary indications for FY97 point to a slight decline in performance rating with 2 projects rated unsatisfactory on DO and 3 rated unsatisfactory on IP as of end- March 1997. This decline in performance is attributable in part to a stepped-up effort towards more realistic performance rating and timely identification and resolution of implementation issues, combined with increasing disbursement and financial. management problems experienced by the Water Supply, and Technical and Vocational Training projects as a result of slow implementation of key project features. Discussions held in the context of the CAS highlighted the fact that implementation difficulties were often also a result of insufficient consideration of cross-sectoral issues in project design. Particular attention has therefore been given to the establishment of multi-sectoral project teams to design and implement IDA projects. In all cases, remedial action plans agreed with Government and project authorities are being put in place. Mauritania's now well established willingness and ability to tum things around, as well as a more proactive Bank supervision of these projects and management of the entire portfolio should help bring performance back on track and lead to a significant improvement in IDA's Mauritania portfolio. 70. Disbursements have improved steadily. The disbursement ratio increased from 15.5 percent in FY94 to 16.5 in FY96 and is estimated to have reached 18 percent by mid-FY97. Actual disbursements increased from US$17 million in FY95 to US$40 million in FY96. The average number of staffweeks (including local staff time) spent on supervision increased to 17 in FY96, compared to 10 staffweeks in FY95. This increase in supervision is mainly attributable to intensive start-up efforts required for the new Mauritania CAS 20 operations in the portfolio and for supervision of the Population and Health, and Education projects. There is a strong consensus between Mauritania and the Bank on the continuing priority attention that needs to be given to streamlining and to improve the management of the portfolio and maximizing its development impact. Our main goal would be to attain and maintain a problem-free portfolio by mid-1998. This is a feasible goal given the track record and prevailing positive macroeconomic environment. 71. Specific targets and mechanisms for periodic reviews of the portfolio with the Government are being established. We will undertake a review of Statements of Expenditures (SOE) and assist the authorities in conducting a follow-up, participatory Country Procurement Assessment with a view to identifying changes in procedures and training needs to increase absorption. These initiatives will serve as input into a CPPR, to be held in the Fall of 1997, that will provide a framework for a stepped-up effort towards resolution of existing project implementation issues. The resident rnission in Nouakchott will play a lead role in the preparation and follow up to this CPPR: the staffing and authority of the resident mission will be upgraded to allow it to discharge adequately these increased portfolio management responsibilities. Consideration is being given to hiring additional higher level local specialists in procurement and financial management. We will aim at reducing processing time of procurement actions (from bid publication through signing of contract), about 18 months at present, to 6-9 months by end-1998. Increased training in procurement and assistance from the resident mission will also be provided. A similar effort will be launched for improving financial management and accountability. Finally, we will continue our efforts geared to strengthening the capacities of Mauritanian institutions responsible for project and portfolio management. We will identify, in the course of the coming CPPR, additional measures and inputs required to that end. VIII. AGENDA FOR BOARD CONSIDERATION 72. The main risk of implementing the proposed strategy would be the ability of the Government of Mauritania to undertake politically demanding decisions in the key areas of direct private sector investment, deregulation of public utilities, and promotion of competition. Current indications promise early action by the Government. Our proposed base case lending program is consistent with this scenario and our non-lending services program will be adjusted on the basis of the Govemment's willingness to seek assistance in developing options and implementing the chosen course of action in any or all of those areas. In the event of diminished receptivity to Bank advice on the above areas, the lending program and the level of non-lending services will be reviewed accordingly. 73. The following issues are suggested for Board discussion: * Does the Board agree with the overall focus and sectoral priorities of the CAS? * Are the efforts to reduce poverty and improve social indicators adequate? * Does the Board agree with the overall size and scenarios for IDA lending and non-lending activities? James D. Wolfensohn President by Gautam S. Kaji Washington, D.C. May21, 1997 ANNEX I Page 1 of 2 Mauritania: Country Assistance Strategy Matrix, 1997-2000 .. ........AN AS ITANCE POVERTYl Rove}l: STRATEGIC. ELEMENTS ACTIONS AND PROGRESS n ling RSW Rapid, broad- . Macro-economic stability . Fiscal policy, exchange rate: Public Resource Management .CG Meeting based growth and (i) diversity and simplify taxation; Credit (SPN) . Macro-modeling income generation (ii) maintain focus of expenditure on . PER III priority areas (basic education, health . Fiscal reforn and maintenance). . Rapid, competitive, broad- . Inprove rural services (research and . Agriculture Services Project .Audit of the Ministry of Rurai based growth in the Rural extension) and the public delivery of (SPN) Development and Sector such services (MDRE) . Priority Rural Infrastructure restructuring . Improve access to the poor (land tenure) project (FY00) . Rural Sector Strategy . Itprove rural infrastructure (roads, water . Rainfed Natural Resources . Livestock Sector Study supply) Management Project (FY97) . Artisanal Fisheries . Improve natural resource management . Integrated Valley Development . Increase functional literacy in rural areas Development Project (FY98) . Rainfed zones reduce number of poor in . Livestock Geofund rural sector and in particular rainfed area . Integrate livestock into the rural economy . Irrigated area: increase efficiency of investments . Rapid, competitive growth in . Improve overall business environment to . Private Sector Development . Study of Private Sector Profile the urban private sector encourage competition and investmnent Technical Assistance Credit .Assessment of Privatization of . Policy reforms in the public (One-stop-shop, more effective Chamber (SPN) Public Enterprises utilities sector of Commerce; legal and regulatory . Financial & Private Sector . Study of commodity transport reform) (SPN) costs Imnprove financial intermediation . Water Supply Project (SPN) . Assessment of informal sector . Reduce cost of doing business (water, . Water Sector Project (FY99) . Private Sector Participation in electricity, telecomm.) . OMVS Regional Power Service Delivery . Improve the urban environment (FY98) . Complete reform of PE (Air Mauritania, . Urban sector project (FY99) SONELEC, OPT) . PE Sector Instit. Devt (SPN) ANNEX I Page 2 of 2 Mauritania: Country Assistance Strategy Matrix, 1997-2000 -........':: .:::":::- : .....'-.: :::::: ::. ''':':,''B NKASSISTANC POVERTY STRATEGIC ELEMNTS ACTIONS AND PROGRESS : - ndin: ESW REDUCTION .B.NC . ;. ....IM..... ....._.., . ...... .. .. .... Increase in human . Raise efficiency and . Access to, quality and relevance of . General Education Project . Study of Effectiveness of capital effectiveness of educational education (SPN) Secondary and Higher achievements to increase * Increase adult literacy . Higher Education Education (ongoing) productivity . Develop basic and referral health . Vocational and Training . Health sector strategy (as . Improve access and quality of services (with emphasis on remote areas) Project (SPN) preparation of Health SIP) health services . Make available adequate reproductive . Health SIP (FY98) . Population growth rate health care and increase practice of . Population and Health project consistent with GDP growth family planning (SPN) Interventions . Generate productive . Incentive environment for employmnent . Construction Capacity . Socio-economic data base and targeted to the employment creation Building Project poverty profile (FY00) vulnerable . Improve living standards of: . Public works and food-for-work (AMEXTIPE) (SPN) (i) rural poor programs . Urban project /Slum (ii) urban poor . Land tenure, services and rural Rehabilitation (FY99) infrastructure. empowerment (farmers' organization) .Slum rehabilitation Strengthen . Reform and Decentralize . Implementation of results of audits of . Urban Development and Pilot . Study of Municipal Finances capacity to design Public Administration key Ministries (Plan, Finance, Fisheries, Decentralization project and deliver pro- . Systematically monitor living Mines and Industry, Commerce) (SPN) poor, pro-growth standards' indicators . Decentralization of authority to local . Public Resource management policies governnents Credit (TA cofinanced by . Deconcentration of public services donors - FY96) . Increased dialogue with civil society ANNEX Al Page 1 of 1 Mauritania: Selected Indicators of Bank Portfolio Performance and Management Indicator 1994 1995 1996 1997 Portfolio Performance Number of Projects under implementation 11 14 13 12 Average implementation period (years)8 3.70 3.72 3.19 3.79 Percent of problem projects rated U or HUb (for past years, rated 3 or 4) Development Objectives' 9.09 7.14 0.00 16.67 Implementation Progress (or overall 0.00 0.00 7.69 33.33 status for past years)d Cancelled dunng FY in US$m 1.93 .04 4.11 0.00 Disbursement ratio (%)e 15.46 16.15 16.48 18.14 Disbursement lag (%)f 10.36 17.65 10.19 13.17 Memorandum item: % completed projects 42.86 50.00 40.00 40.00 rated unsatisfactory by OED Portfolio Management Supervision resources (total US$ thousands) 515.26 459.20 692.50 762.10 Average Supervision (UJS$ thousands/project) 46.84 30.57 48.28 63.50 Supervision resources by location (in %)5 Percent headquarters 0.00 0.00 68.09 55.31 Percent resident nission 0.00 0.00 31.91 44.69 Supervison resources by rating category (`US$ thousands/project) Projects rated HS or S 46.84 30.57 45.43 597.70 Projects rated U or HU 0.00 0.00 82.49 164.40 Memorandum item: date of last/next CPPR a Average age of projects in the Bank's country portfolio. b. Rating scale: "HS" denotes "Highly Satisfactory", "S" denotes "Satisfactory", "U" denotes "Unsatisfactory", and "HU" denotes "Highly Unsatisfactory". c Extent to which the project will meet its development objective (see OD 13.05, Annex D2, Preparation of Implementation Summary [Form 590J). d. Assessment of overall performance of the project based on the ratings given to individual aspects of project implementation (e.g., management, availability of funds, compliance with legal covenants) and to development objectives (see OD 13.05, Annex D2, Preparation of Implementation Summary [Form 5901). The overall status is not given a better rating than that given to project development objectives. e Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year: investment projects only. For all projects comprising the Bank's country portfolio, the percentage difference between actual cumulative disbursements and the cumulative disbursement estimates as given in the "Original SAR)PR Forecast" or, if the loan amounts have been modified, in the "Revised Forecast." The country portfolio disbursement lag is effectively the weighted average of disbursement lags for projects comprising the Bank's country portfolio, where the weights used are the respective project shares in the total cumulative disbursement estimates. & Supervision resources data, by location, is only available starting in fiscal year 1996. Note: Disbursement data is updated at the end of the first week of the month. Supervision resources include Salaries, Benefits, and Travel but excludes FAO staff and PCR task costs. ANNEX A2 Page 1 of 2 Mauritania: Bank Group Fact Sheet IBRD/I)A Lending Program Past Current Planned' Category 1994 1995 1996 1997 1998 1999 2000 Commitments (US$m) 19.5 72.2 34.8 14.6 36.8 25.0 25.0 Sector (W)b Agriculture 93.3 0.0 0.0 95.9 48.9 0.0 0.0 Fisheries 0.0 0.0 0.0 0.0 0.0 0.0 12.0 Education 0.0 48.5 0.0 0.0 0.0 0.0 0.0 Electric Pwr & Engy. 0.0 0.0 0.0 0.0 13.0 0.0 0.0 Finance 0.0 10.0 0.0 0.0 0.0 0.0 0.0 Multisector 0.0 0.0 0.0 4.1 0.0 0.0 0.0 Popultn, Hlth & Nutn 0.0 0.0 0.0 0.0 38.0 0.0 0.0 Public Sector Mgmt. 6.7 41.6 59.8 0.0 0.0 0.0 0.0 Urban Development 0.0 0.0 40.2 0.0 0.0 0.0 13.0 Water Supply & Santn 0.0 0.0 0.0 0.0 0.0 100.0 0.0 TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Lending instrument (%/) Adjustment loans0 6.7 41.6 59.8 4.1 0.0 0.0 0.0 Specific investment loans and others 93.3 58.4 40.2 95.9 100.0 100.0 0.0 TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Disbursements (USSm) Adjustment loansc 6.0 12.91 17.17 10.70 5.0 0.0 0.0 Specific investment loans and others 10.9 12.5 18.7 17.5 26.6 17.8 13.0 Repayments (US$m) 14.1 3.7 4.2 2.5 0.0 0.0 0.0 Interest (US$m) 3.6 3.2 3.3 2.0 0.0 0.0 0.0 Ranges that reflect the base-case (i.e., most likely) Scenario. for IDA countries, planned commitments are not presented by FY but as a three-year-total range; the figures are shown in brackets. A footnote indicates if the pattern of IDA lending has unusual characteristics (e.g., a high degree of frontloading, backloading, or lumpiness). For blend countries, planned IBRD and IDA conunitments are presented for each year as a combined total. b For future lending, rounded to the nearest 0 or 5%. To convey the thrust of country strategy more clearly, staff may aggregate sectors. t Structural adjustment loans, sector adjustment loans, and debt service reduction loans. Note: Disbursement data is updated at the end of the first week of the month. ANNEX A2 Page 2 of 2 Mauritania: lIFC and MIGA Program, FY94-97 Past Category 1994 1995 1996 1997 IFC approvals (US$m)a 0.00 0.00 4.18 0.00 Sector (%/6) 0.00 0.00 0.00 0.00 Financial Services 0.00 0.00 100.00 0.00 TOTAL 100.00 100.00 100.00 100.00 Investment instrument (%) Loans 0.00 0.00 96.00 0.00 Equity 0.00 0.00 4.00 0.00 Quasi-Equity b 0.00 0.00 0.00 0.00 Other 0.00 0.00 0.00 0.00 TOTAL 100.00 100.00 100.00 100.00 MIGA guarantees (US$m) 0.00 0.00 0.00 0.00 M1GA commitments (US$m) 0.00 0.00 0.00 0.00 aExcludes AEF projects. 'bIncludes quasi-equity types of both loan and equity instruments. ANNEX A3 Page I of I Mauritania: Summary of Economic and Sector Work (US$ Thousands) Actual Planned Category 1996 1997 1998 1999 Agriculture .0.0 19.7 0.0 0.0 Environment 5.2 0.0 0.0 0.0 Multisector 143.4 49.8 0.0 0.0 Unidentified 71.0 1.8 0.0 0.0 TOTAL 219.6 71.3 0.0 0.0 ANNEX A4 Page 1 of 2 Mauritania: Poverty and Social Development Indicators Most Same region4nome grop Next Latestsingleyear recent Sub- higher Unit of estfimae Sakaran Lon. inc Indicator measure 1970-75 1980-85 1989-94 Afiia income group Priority Poverty Indicators POVERTY Upper poverty line local curr. .. .. .. Headcount index % of pop. .. .. .. Lower poverty line local curr. .. .. .. Headcount index % of pop. .. .. .. GNP per capita US$ 330 380 480 500 390 1,670 SHORT TERM INCOME INDICATORS Unskilled urban wages local curr. .. .. .. Unskilled rural wages Rural terms of trade Consumerprice index 1987=100 .. 86 155 Lower income Food Urban Rural SOCIAL INDICATORS Public expenditure on basic social services % of GDP .. .. 4.0 Gross enrollment rations Primary a/ % school age pop. 19 48 69 71 105 104 Male 24 58 76 77 112 105 Female 13 39 62 64 9S 101 Mortality Infantmortality perthou.livebirths 142 117 98 92 58 36 Under 5 mortality -. ,, 159 161 101 47 Inmunization Measles %agegroup .. 55.0 33.0 51.4 86.2 77.4 DPT -. 21.0 28.0 53.5 89.1 82.0 Child malnutrition (under-5) n. 31.0 - *- 38.2 Life expectancy Total years 43 47 51 52 63 67 F'emale advantage 3.2 3.2 2.9 3.5 2.4 6.4 Totalfertility rate births perwoman 6.5 6.1 5.2 5.9 3.3 2.7 Matemal mortality rate per 100,000 live births .. .. 800 Supplementary Poverty Indicators Expenditures on social security % of total gov't exp. .. .. .. Social security coverage % econ. active pop. .. .. .. Accessto safe water: total % ofpop. 17.0 36.2 65.8 Urban 98.0 73.0 66.6 Rural 10.0 16.0 65.2 Access to health care n, 30.0 ,. Population growth rate GNP per capita growth rate Development diamondb 6+ (average annual, percent) l0+ (avenge nnual, percent) Life expectancy 4- 5 . - 2 - - 1 - H s ° ~ GNP Gross 2 0 - i 'e-J." \\~~~~~~~~~~~0 capita enrolhnemA 21 -10 ._ ._. 1970-75 1980-45 1989-94 1970-75 199805 1989-94 Access to safe water 7 Mu-t Mauritania - Low-income - Low-income b. The development diamond, based on four key indicators, shows the average level of development in the country compared with its income group. ANNEX A4 Page 2 of 2 Mauritania: Poverty and Social Development Indicators Most Sameregion/incomegroup Next Latestsinglyw recent SUb higher Unit of estimate Saharan Lo- income Indicator measure 1970-75 1980-85 1989-94 Africa income group Resources and Expenditures HUMAN RESOURCES Population (mre=1994) thousands. 1,371 1,766 2,215 571,902 3,182,221 1,096,881 Age dependency ratio ratio 0.86 0.93 0.87 0.94 0.66 0.63 Urban %ofpop. 20.3 38.2 52.4 30.6 28.3 55.9 Population growth rate annual %. 2.4 2.6 2.5 2.8 1.7 1.3 Urban " 9.1 7.5 5.2 4.9 3.2 2.7 Labor force thousands 678 823 1,015 254,250 1,590,533 488,647 Agriculture % of labor force 78 63 55 6565 67 36 Industry " 5 8 10 9 14 26 Female " 46 45 44 41 39 40 Labor participation rates Total % ofpop. 49 47 46 44 50 45 Fenale 23 21 20 37 41 36 NATURAL RESOURCES Area thou. sq. km 1,025.52 1,025.52 1,025.52 24,273.83 40,391.42 40,594.43 Density pop. per sq. km 1.34 1.72 2.11 22.90 77.44 26.66 Agricultural land % land area 38.48 38.48 38.49 50.61 52.42 41.05 Change in agricultural land annual % 0.07 0.02 0.00 0.01 0.16 -1.38 Agricultural landunderirngation % 0.08 0.12 0.12 0.86 17.84 11.40 Forests and woodland thou. sq.hk .. 5.54 5.54 5,323.14 7.632.00 5,969.25 Deforestation (net) % change, 1980-90 .. .. 0.00 INCOME Household incomne Share oftop 20% of households % of income .. .. .. Share of bottom 40% of households " .. .. .. Share of bottom 20% of households .. .. .. EXPENDITURE Food % ofGDP .. .. .. Staples Meat, fish, milk, cheese, eggs Cereal imports thou. metric tonnes 113 304 286 14,051 36,922 68,936 Food aid in cereals " 48 135 42 5,079 8,516 5,771 Foodproductionpercapita 1987= 100 101 103 92 102 115 102 Fertilizer consumption kg/ha 0.0 0.1 0.1 5.3 58.5 46.3 Share of agriculture in GDP % of GDP 26.7 20.0 23.7 19.5 27.6 14.0 Housing % of GDP .. .. .. Average household size persons per household .. .. 5.3 Urban .. .. 5.4 Fixed investment: housing % of GDP .. .. .. Fuel and power %ofGDP .. .. .. Energy consumption per capita kg ofoil equiv. 120 122 103 251 373 1,602 Households with electricity Urban % of households .. .. 14.0 Rural " .. 6.0 Transport and communication % of GDP .. .. Fixed investment: transport equipment ". Total road length thou. km 7 7 7 INVESTMENT IN HUMAN CAPITAL Health Population per physician persons 18,126 8,830 .. .. .. 3,064 Population per nurse 3,748 1,204 .. Population per hospital bed 2,904 1,302 1,316 1,034 592 Oral rehydration therapy (under-5) % ofcases .. .. 54 37 38 Education Gross enrollment ratios Secondary %ofschoolagepop. 4 15 15 24 48 63 Ferale " 0 8 11 23 42 62 Pupil-teacher ratio: primary pupils per teacher 35 51 53 40 39 Pupil-teacher ratio: secondary " 24 24 20 .. 20 Pupils reaching grade 4 % of cohort 97 92 86 Repeater rate: primary % oftotal enroll. 15 18 .. Illiteracy % ofpop. (age 15+) .. 73 66 53 35 Female %offem. (age 15+) .. 84 74 54 46 Newspaper circulation per thou. pop. 2 .. 0 12 .. 236 World Bank Intemnational Econornics Department, April 1996 ANNEX A5 Page 1 of 2 Mauritania: Key Economic Indicators 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2006 ESt Proj. Proj. Proj. Proj. Proj. NATIONAL ACCOUNTS ( % of GDP at current market pnces) GDP at mLp. 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Primarysectorat fc. 25.9 23.8 23.8 22.7 23.1 23.1 .. .. Secondary sector at fc. 25.6 24.8 26.7 28.0 28.5 28.6 .. .. Tertiary sector at fc. 38.2 41.4 38.5 38.3 39.1 39.1 .. .. Net indirect taxes 10.3 10.0 10.9 11.0 9.3 9.1 9.1 9.0 8.8 8.7 8.6 Consumption 90.0 92.8 90.3 92.8 92.9 86.2 89.1 88.9 87.3 84.1 80.6 Gross domestic investment 17.9 20.5 23.5 14.5 18.1 22.0 16.1 17.7 18.1 20.5 25.0 Publicfixedinvestment 5.1 4.5 5.7 5.8 5.1 5.5 5.5 5.5 5.5 5.5 5.5 Private fixed investinent 12.8 15.9 17.7 8.7 13.0 16.5 10.6 12.2 12.6 15.0 19.5 Resowce balance -7.9 -13.2 -13.8 -7.3 -11.0 -8.2 -5.2 -6.6 -5.4 -4.7 -5.6 Exports GNFS 44.4 38.8 45.9 42.1 50.5 53.6 49.9 47.3 45.7 45.1 42.1 mports GNFS 52.3 52.1 59.7 49.3 61.4 61.8 55.1 53.9 51.1 49.7 47.8 Gross domestic savings 10.0 7.2 9.7 7.2 7.1 13.8 10.9 11.1 12.7 15.9 19.4 Grossnationalsavings 3.2 3.9 2.3 3.4 5.0 12.3 10.6 11.7 13.6 17.1 21.8 Memorandum Items: GDP atmip. (curent USS million) 1130.2 1190.6 943.7 1026.8 1068.2 1094.2 1169.4 1235.4 1310.1 1393.2 2120.4 GNP per capita (Atlas method) (current USS) 510.0 530.0 500.0 490.0 460.0 470.0 480.0 500.0 520.0 550.0 730.0 Official average exchange rate (UMIUSS) 81.9 87.0 120.8 123.6 129.8 137.2 142.1 148.6 153.7 157.6 170.3 PUBLIC FINANCE (as % of GDP at current market ncari Current revenue and special accounts (excl. grants) 21.8 19.2 25.1 22.3 23.1 28.9 26.5 25.8 25.3 26.1 29.1 Current expenditures and special accounts 22.4 18.8 21.6 18.6 18.0 17.7 16.7 15.7 14.6 13.9 11.7 Current account balance (excl. grants) -0.7 0.4 3.5 3.7 5.1 11.2 9.8 10.1 10.7 12.2 17.4 Government revenue + special accounts (exel. grants) 22.2 19.4 25.7 23.2 24.0 29.8 27.4 26.7 26.2 27.0 30.0 Total expenditurs and net lending (inel. spec. aects) 28.9 24.8 36.8 27.7 24.8 24.5 23.3 23.0 22.4 23.0 24.0 Overall surplus (+)ordeficit(-), exel. grants -6.7 -5.4 -11.0 -4.5 -0.8 5.3 4.1 3.7 3.8 4.0 6.0 Capital expenditure 5.1 4.5 5.7 5.8 5.1 5.5 5.5 5.5 5.5 5.5 5.5 REAL ANNUAL GROWTH RATES (1985 prices) (%/t RealGDPatm.p. 2.6 1.7 5.5 4.6 4.6 4.7 4.9 5.1 5.3 5.3 5.5 Real gross domestic income 5.7 -0.2 -1.9 12.9 1.9 5.2 7.8 5.9 5.5 6.0 5.5 REAL ANNUAL PER CAPITA GROWTH RATES (1985 pnces) (t/%) RealGDPpercapita 0.1 -0.8 2.8 2.0 2.0 2.2 2.4 2.7 2.8 2.8 3.1 Realtotalconsunptionpercapita -0.9 0.8 -11.7 16.4 -3.0 -4.6 11.0 2.7 1.5 0.0 1.8 Realprivateconsumptionpercapita -1.3 1.7 -12.5 17.9 -2.8 -5.3 11.7 3.2 2.0 -0.1 1.6 MONETARY INDICATORS Velocity(GDP/M2) 3.6 3.8 4.1 4.6 5.3 6.1 .. .. .. Growth rate of M2 (0%) 9.3 7.2 0.7 -0.6 -5.1 -5.0 .. .. (Continued) ANNEX A5 Page 2 of 2 Mauritania: Key Economic Indicators (cont'd) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2006 Est. Proj. Proj. Proj. Proj. Proj. BALANCE OF PAYMENTS (current US$ million) Expotts GNFS 501.5 462.4 433.3 431.9 539.2 586.5 583.8 584.5 598.5 627.8 893.7 ofwhich: Merchandise £o.b. 437.9 414.3 399.9 394.1 493.1 485.1 494.9 496.8 510.7 541.5 767.1 Imports GNFS 591.1 619.8 563.3 506.6 656.2 675.9 644.7 665.6 668.9 692.6 1012.9 ofwhich: Merchandise fo.b. 384.7 424.2 374.9 339.7 416.9 435.4 411.6 434.6 432.8 449.5 668.7 Resourc balance -89.6 -157.5 -130.0 -74.7 -117.1 -89.4 -60.8 -81.0 -70.5 -64.8 -119.1 Net factor income -61.2 -66.7 -68.7 -45.4 -52.9 -56.3 -47.1 -36.6 -34.1 -30.5 -13.6 of which: Total interest due (PFP data) 63.3 68.1 65.2 46.0 50.3 50.2 48.7 43.6 42.7 40.9 28.6 Net current transfer (private) -15.5 27.2 -1.1 6.3 30.2 39.5 43.3 43.3 45.2 47.2 65.7 Curr. aect, balance, excl. all official transfers -166.3 -197.0 -199.8 -113.7 -139.8 -106.3 -64.6 -74.4 -59.3 -48.1 -67.0 Net official transfers (current + capital) 83.0 92.7 106.3 82.5 72.8 65.1 78.9 80.3 51.2 44.1 61.6 Curr. acot. balance, incl. all o£ficial transfers -83.2 -104.3 -93.6 -31.2 -66.9 -41.2 14.3 5.9 -8.1 -4.0 -5.4 Net foreign direct investment 4.9 7.2 16.1 2.9 6.8 -0.4 -3.0 0.0 0.0 0.0 0.0 Net LT loans -25.3 11.7 17.3 36.9 -2.1 -16.4 -34.7 -34.8 -55.9 -47.1 0.8 Disbursement (PFP data) 73.1 119.9 122.5 102.8 78.7 67.1 55.1 55.4 37.7 40.1 60.8 Amortization due (PFP data) 98.4 108.2 105.1 65.9 80.9 83.5 89.7 90.2 93.7 87.2 60.0 Other capital & errrs & omissions 1/ -21.5 -9.5 5.3 -60.5 43.9 73.5 28.0 17.5 32.5 35.6 57.8 Overall balance -125.1 -94.9 -54.8 -51.9 -18.3 15.5 4.6 -11.4 -31.6 -15.5 53.2 Total financing 125.1 94.9 54.8 51.9 18.3 -15.5 -4.6 11.4 31.6 15.5 -53.2 Total change in reerves (incl.IMF) -27.2 3.1 21.8 26.6 -33.2 -49.7 -75.1 -43.8 -53.3 -47.2 -53.2 Net credits from tMF -13.2 3.5 5.7 18.3 12.7 10.9 13.9 12.6 10.3 8.2 0.0 Purchases 0.0 11.9 11.9 24.3 21.7 20.8 20.5 19.6 19.6 19.6 0.0 Repurchases 13.2 8.4 6.1 6.0 9.0 9.9 6.6 7.0 9.3 11.4 0.0 Change in gross official reserves (- increase) -14.0 -0.4 16.1 8.3 -46.0 -60.5 -89.0 -56.4 -63.6 -55.3 -53.2 Financing items, excl. reserves (net), ofwhich: 152.3 91.9 33.1 25.2 51.5 34.2 70.5 55.2 84.9 62.6 0.0 Change in arrears (+ increase) 147.4 86.8 -237.1 -33.2 -16.2 -65.8 -67.3 0.0 0.0 0.0 0.0 Debtreliefobtained 4.9 5.1 270.2 58.4 67.8 99.9 33.4 0.0 0.0 0.0 0.0 Financing gap 2/ 0.0 0.0 0.0 0.0 0.0 0.0 104.5 55.2 84.9 62.6 0.0 Memorandum Items: Gross reserves, Year-end (USS million) 71.7 65.0 49.1 39.7 89.9 150.4 239.5 295.9 359.5 414.9 584.7 Grossresves as monthsofimportsgoods&serv. 1.3 1.1 0.9 0.9 1.5 2.5 4.1 5.0 6.1 6.8 6.7 ExportsofGNFSas%ofGDP 44.4 38.8 45.9 42.1 50.5 53.6 49.9 47.3 45.7 45.1 42.1 ImportsofGNFSas % ofGDP 52.3 52.1 59.7 49.3 61.4 61.8 55.1 53.9 51.1 49.7 47.8 Resource balance as % ofGDP -7.9 -13.2 -13.8 -7.3 -11.0 -8.2 -5.2 -6.6 -5.4 -4.7 -5.6 Curr. acct bal. as % of GDP (exel. offic. transfers) -14.7 -16.5 -21.2 -11.1 -13.1 -9.7 -5.5 -6.0 -4.5 -3.4 -3.2 REAL ANNUAL GROWTH RATES (1985 vrices) (%) Real exports ofGNFS -0.1 -6.5 11.8 -14.1 14.1 7.0 -4.5 -3.6 0.5 1.1 5.0 Real imports of GNFS -4.6 1.6 -7.5 -9.7 11.9 3.0 -3.0 0.7 -1.2 1.6 4.9 PRICE INDICES (1985=100) Expowtpriceindex,goods(USSter-s) 127.8 131.4 112.0 132.4 129.6 130.0 136.7 142.4 145.1 150.8 167.0 lmport price index, goods (USS terms) 125.6 130.1 126.4 125.3 146.5 148.6 143.5 148.0 149.6 152.0 173.9 Merchandise tensoftrade 101.8 101.0 88.6 105.6 88.5 87.5 95.3 96.3 97.0 99.2 96.1 Real effective exchange rate index (IMF data) 77.0 77.6 70.9 65.2 59.6 60.2 .. .. Consumerprices(anuall%change) 5.6 10.1 9.3 4.1 6.5 4.7 5.0 4.6 4.0 3.0 3.0 GDPdeflator(anuall%change) 9.8 10.0 4.3 6.4 4.4 3.4 5.5 5.1 4.1 3.6 3.0 Nominal discountrate, Year-end ([FSX%p.a.) 7.0 7.0 11.0 11.0 11.0 11.0 .. .. 1/ Include net short-term debt (trade credit + net liabilities of banking system), and errors & omissions. 2/ Ass2umed to be filled with debt relief extended by official bilateral creditors and borrowing on highly concessional terms ANNEX A6 Page 1 of 1 Mauritania: Key Exposure Indicators 1991 1992 1993 19 19 1995 1996 1997 1993 1999 2000 2006 EIL Proj. Proj. Proj. P. P. In USS million at curreMnt rices fDRS data): Toal debt diab. & outstanding (TDO) 1/ 2198.7 209S.3 2138.0 2137.7 2320.0 2350.0 2397.9 2397.8 2392.0 2370.3 2218.5 Net disburements (net LT loans + net IMF) 9.7 34.2 87.2 99.8 55.3 80.8 25.0 -17.7 -33.2 -57.3 46.0 (ss disbuent mnusi principal repaid) Total debt sevice paid (LT+ST+IMF) (DRS data) 1/ 98.0 36.7 123.0 104.8 109.5 116.3 141.1 163.9 162.6 166.1 99.6 Debt and Debt Service Indikdtws tDRS data) (/6) 1I Total debt outstanding/GDP 194.5 176.3 226.6 213.1 217.2 214.8 205.1 194.1 182.6 170.1 104.6 Total dbtExporsofGS&WR 2/ 428.8 403.8 469.3 483.4 397.6 367.0 372.9 370.9 360.1 339.7 224.5 ToaldebtservieepaidtExpocsofGS&WR 19.1 16.7 28.1 23.2 18.3 13.2 21.9 25.4 24.5 23.3 10.1 Concesional LT debt/Total debt outtanding 63.5 67.0 74.2 75.3 75.1 75.6 75.0 74.6 73.6 72.6 65.0 World Bank Exocsnre Indicators (IBRD+IDAA) (0/%) World Bank debt service/Trotal det srvice paid 18.1 20.3 13.9 11.6 6.7 6.2 5.7 5.4 5.7 6.2 14.5 Preferred creditor debt servicTotal debt service paid 66.5 76.3 72.4 67.8 54.6 74.1 53.1 44.2 48.0 51.4 43.5 WorldBankdebtservicee/ExorofGS&WR 3.5 3.4 3.9 2.7 1.3 1.1 1.3 1.4 1.4 1.5 1.5 IFC Gress Commitments (USS milion) Loans 3.4 0.0 0.0 0.0 0.0 4.0 0.0 0.0 0.0 0.0 0.0 Equity and quasi-equity 0.3 0.0 0.0 0.0 0.0 0.2 0.0 0.0 0.0 0.0 0.0 MIGA (USS miUlion) MIGA Guarantees 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Sources: DebtorRepoting System (DRS data as of 12/31/96); Statement of IFC Investents as of December 31, 1996. 1/ Icludes public and publicly guaranteed debt, private non-guaranteed debt, use of IME credits, and short-tenn deoL Prefenred creditors are all mnltilateral lenders, including IME. 2/ Exports of GS&WR means exports of goods, services and workers remittances. ANNEX A7 Page 1 of 2 Status of Bank Group Operations in Mauritania IBRD Loans and IDA Credits in the Operations Portfolio (As of 4/22/97) Difference Last ARPP Original Amount in USS millions between expected Supervision Rating b/ Project Loan or Fiscal and actual Development Implementation ID Credit No. Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursements al Objectives Progress Number of Closed Loans/credits: 36 Active Loans MR-PE-1839 C21670 1990 GOVT OF MAURITANIA P.E. SECTOR INST DEV 0.00 10.00 0.00 .18 -1.69 HS S MR-PE-1867 C23890 1992 GOVT OF MAURITANIA WATER SUPPLY 0.00 10.50 0.00 5.25 4.69 U U MR-PE-1855 C23110 1992 GOVTOFMAURITANIA POPHEALTH 0.00 15.70 0.00 4.59 2.28 S S MR-PE-1872 C25210 1993 GOVT OF MAURITANIA TECHNICAUVOCATIONAL 0.00 12.50 0.00 8.28 5.55 U U MR-PE-1870 C24550 1993 GOVT OF MAURITANIA CONSTRUCTION CAPACIT 0.00 12.00 0.00 1.79 .23 HS HS MR-PE-1864 C25750 1994 GOVT OF MAURITANIA AGRIC SERVICES 0.00 18.20 0.00 9.99 1.77 S S MR-PE-38661 C27300 1995 GOVT OF MAURITANIA FIN/PRIV.SCTR.CAPACITY 0.00 7.20 0.00 4.69 2.52 U S MR-PE-1866 C27260 1995 GOVT OF MAURITANIA FINANCIAL & PRIVATE 0.00 30.00 0.00 0.00 0.00 HS HS MR-PE-1857 C27060 1995 GOVT OF MAURITANIA GENERAL EDUCATION PR 0.00 35.00 0.00 28.37 5.20 S S MR-PE-1874 C28870 1996 GOVT OF MAURITANIA PUBLIC RESOURCE MGMT 0.00 20.00 0.00 11.00 -3.76 HS HS MR-PE-34106 C28350 1996 GOVT OF MAURITANIA INFRAST & PILOT DEC. 0.00 14.00 0.00 12.69 3.34 HS HS TOTAL 0.00 185.10 0.00 86.83 20.57 Active Loans Closed Loans Total Total disbursed (IBRD and IDA) 89.05 421.90 510.95 Of which has been repaid 0.00 153.54 153.54 Total now held by IBRD and IDA 185.10 253.68 438.78 Amount sold 0.00 63.35 63.35 Of which repaid 0.00 63.35 63.35 Total Undisbursed 94.02 0.22 94.24 a. hitended disbursements to date minus actual disbursements to date as projected at appraisal. b. Rating of 1-4: see OD 13.05. Annex D2. Preparation of Implementation Sumnmary (Form 590). Following the FY94 Annual Review of Portfolio Performance (ARPP), a letter-based system was introduced (HS=highly satisfactory, S=satisfactory, U=unstatisfactory, HU=highly unsatisfactory); see Proposed hnprovements in Project and Portfolio Perfornance Rating Methodology(SecM94-901), August 23, 1994. Note: Disbursement data is updated at the end of the first week of the month. ANNEX A7 Page 2 of 2 Mauritania: Statement of IFC Investments Committed and Disbursed Portfolio As of 2/28/97 (In US$ Millions) Committed Disbursed IFC IFC FY Company Loan Equity Quasi Partic. Loan Equity Quasi Partic Approval 1991 MORAK 0.00 0.00 0.26 0.00 0.00 0.00 0.00 0.00 1996 AEF Mayo Fish 0.00 0.00 0.26 0.00 0.00 0.00 0.00 0.00 1997 AEF CODIPAL 0.00 0.00 0.47 0.00 Total Portfolio 0.00 0.00 0.73 0.00 0.00 0.00 0.00 0.00 Pending Commitments 1996 GBM 4.00 0.18 0.00 0.00 1997 BMCI 14.00 - -- -- Total Pending Commitments 18.00 0.18 0.00 0.00