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Mauritius: Staff Report for the 2013 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund. African Dept.
Published Date:
April 2013
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Relations with The Fund

(As of February 28, 2013)

Membership Status: Joined: September 23, 1968; Article VIII

General Resources Account:

SDR Million%Quota
Quota101.60100.00
Fund holdings of currency (Exchange Rate)67.9866.91
Reserve Tranche Position33.6533.12

SDR Department:

SDR Million%Allocation
Net cumulative allocation96.81100.00
Holdings99.95103.25

Outstanding Purchases and Loans: None

Latest Financial Arrangements:

TypeDate of ArrangementExpiration DateAmount Approved (SDR Million)Amount Drawn (SDR Million)
Stand-ByMar 01, 1985Aug 31, 198649.0049.00
Stand-ByMay 18, 1983Aug 17, 198449.5049.50

Projected Payments to Fund1/

(SDR Million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20122013201420152016
Principal
Charges/Interest0.000.000.000.000.00
Total0.000.000.000.000.00

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

Implementation of HIPC Initiative: Not Applicable

Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable

Implementation of Post-Catastrophe Debt Relief (PCDR): Not Applicable

Exchange Rate Arrangement

Starting in July 1, 2010, Mauritius intervened occasionally in the foreign exchange market to smooth excess volatility and the de facto exchange rate arrangement was reclassified from free floating to floating. Mauritius has accepted the obligations of Article VIII, Section 2, 3, and 4. It maintains an exchange system free of multiple currency practices and of restrictions on the making of payments and transfers for current international transactions. Mauritius also maintains a liberal capital account. On March 8, 2013, US$1 was equivalent to MUR 30.65.

Article IV Consultation

Mauritius is on the standard 12-month cycle. The last Article IV consultation staff report (Country Report No. 12/62, March, 2012) was completed by the Executive Board on March 14, 2012. A Financial System Stability Assessment update was completed by a joint IMF–World Bank team on April 20, 2007.

Technical Assistance (2004–2013)

FAD mission on revenue administration and tax policy, February 2004.

MFD mission on banking supervision and legislation, October 2004.

MFD mission on banking supervision during 2005: the first mission in January 2005, and the second in March-April 2005.

FAD mission on revenue administration and tax policy, January 2005.

MFD mission on financial sector policy and strategy, January 2006.

FAD mission on fiscal adjustment strategy and Poverty and Social Impact Analysis (PSIA), February-March 2006.

MFD mission on financial sector policy and strategy, July 2006.

MFD mission on banking supervision/monetary operations/monetary policy, October 2006.

STA mission on multisector statistics, November 2006.

MCM mission on financial sector policy and strategy, January 2007.

MCM primary mission on Financial Sector Assessment Program (FSAP), February 2007.

FAD mission on Public Financial Management (PFM) and Medium-Term Expenditure Framework (MTEF), March 2007.

MCM mission on financial sector policy and strategy, March-April 2007.

STA mission on balance of payments statistics, March 2007.

MCM mission on foreign exchange markets, August 2007.

STA balance of payments module mission, October 2007.

STA mission on Phase II SDSS balance of payments statistics, October-November 2007.

STA Report on the Observance of Standards and Codes (ROSC) mission, November-December 2007.

FAD mission on Public Financial Management (PFM): Implementing Program-Based Budgeting: Next Steps, February 2008.

STA mission on national accounts statistics, February 2008.

STA mission on Phase II SDSS Government Finance Statistics, March 2008.

MCM mission on Central Bank-FSAP follow-up, March 2008 (2 missions).

STA mission on Phase II SDSS Multisector Statistics, March-April 2008.

STA mission on monetary and financial statistics, April 2008.

STA mission on balance of payments statistics, May 2009.

FAD mission on refining program budgeting and performance management, September 2009

STA mission on national accounts statistics, November 2009

STA mission on national accounts statistics, April 2010

STA mission on balance of payments statistics, July 2010

MCM mission on anti-money laundering (AML), August 2010

MCM mission on macroeconomic modeling, August/September 2010

FAD mission on refining program budgeting and performance management, September 2010

STA mission on international investment position, October 2010

FAD mission on PEFA, November 2010

STA mission on government finance statistics, January 2011

FAD mission on revenue administration, June 2011

LEG mission on AML/CFT, July 2011

STA mission on balance of payment statistics, September 2011

STA/DFID mission on external sector statistics, October 2011

MCM mission on macroeconomic modeling and forecasting, October 2011

MCM mission on technical assistance needs assessment, October 2011

LEG mission on AML/CFT, February 2012

LEG mission on central banking legislation, February 2012

AFRITAC South mission on updating the Finance & Audit Act (2008) and drafting revised underlying financial regulations, February 2012.

MCM multi-topic mission on financial sector reform, April/May 2012

AFRITAC South multi-topic mission on PFM Legal framework and developing a new PFM Act, May/June 2012

AFRITAC South mission on Implementation of Basel III, September 2012

AFRITAC South mission on Fiscal Legal Framework, September 2012

STA mission on Balance of Payments Statistics and International Investment Position, November 2012

MCM mission on Liquidity and Debt management and Secondary Market Development, December 2012

STA multi-sector statistics mission, January/February 2013

AFRITAC South multi-topic mission on revenue mobilization and on the finalization of the Tax Administration Act, February/March 2013

Resident Representative: None.

The JMAP Bank-Fund Matrix (2013)

(As of February 7, 2013)

The IMF and World Bank Mauritius teams met on January 21 to discuss a Joint Managerial Action Plan (JMAP). The team from the World Bank comprised of Mr. Muñoz (Country Representative), Mr. D’Hoore (lead Economist), Mrs. Mobasher (Research Analyst) and from the IMF of Messrs. Petri, David, Gitton and Xiong (all AFR).

The IMF’s work program entails continued engagement through the Article IV consultation process as well as technical assistance in: public financial management provided through AFRITAC South (AFS); financial sector stability, monetary policy frameworks, and central bank legislation through the Monetary and Capital Markets Department (MCM) and Legal (LEG) Departments, and enhancements to macroeconomic statistics with the support of the Statistics Department (STA).

The World Bank Group’s work program entails continuing work on infrastructure, competitiveness, public sector reform and social sectors. The World Bank Country Partnership Strategy for Mauritius up to 2015 aims at helping the Government to deal with (i) short-term trade shocks and (ii) the transition to a more competitive and diversified economy, while minimizing negative social impacts along the transition. On-going and planned Bank assistance to Mauritius is:

  • Infrastructure. The Mauritius Infrastructure Project signed in December 2009 seeks to support the government investment program in transport, water and electricity. The Road Asset Management and Safety Project investment lending under preparation will seek to reduce transport costs and improve maintenance on the primary and secondary road network in two pilot regions over a 7 year period, whilst strengthening the management of road safety in Mauritius. This is expected to be realized by the following components: (a) the piloting of output and performance based road contracts for a seven year period in two pilot regions of Mauritius; (b) the improvement of the management of road safety; (c) the strengthening of the institutional framework for transport; (d) institutional assistance and implementation support.

  • Preparation of a Grid Code, Feed-in-Tariffs & Model Energy Supply Purchase Agreements for Renewable Energy Systems Greater than 50kW through a SIDS DOCK Grant will seek to promote investment in renewable energy infrastructure, contribute to energy security, reduce GHG emissions, and encourage household-private sector investment in renewable energy technologies.

  • Policy Reforms. The Bank is expected to approve in March and April 2013 the Second Public Sector Performance Development Policy Loan of US$20 million and the Second Private Sector Competitiveness Development Policy Loan of US$15 million respectively. The Public Sector Performance DPL aims to support improvement in the performance of the public sector in Mauritius by assisting the government to implement reforms within the following three pillars: (i) strengthening services that support and empower the most vulnerable; (ii) streamlining trade regulation and processes; and (iii) improving human resource management in the civil service and monitoring of SOE performance. The Private Sector Competitiveness DPL aims to support competitiveness and enterprise development in three areas: (i) improving competitiveness and growth of enterprises; (ii) improving access to finance; and (iii) promoting ICT and e-Gov for enhancing competitiveness and transparency.

  • Analytical support. The Bank is preparing a Public Expenditure Review report in FY13 to increase efficiency and effectiveness in the public sector through a detailed review of the education and health sectors. The Improving Competitiveness technical assistance will aim to improve competitiveness and economic diversification.

  • Strengthening Public Sector Performance. The Strengthening Governance and Anti-Corruption in Mauritius technical assistance will aim at strengthening governance and anti-corruption in Mauritius through support to performance management, M&E and institutional strengthening across the public sector, with a focus on strengthening M&E at the MoFED.

  • International Finance Corporation (IFC). The IFC has focused its intervention in Mauritius along three axes: (i) supporting the banking sector with access to long term funding to offset local banks’ difficulty in accessing long term foreign exchange to support trade finance, cross-border south–south initiatives and long term investments in key infrastructure; (2) investing in regional private equity funds to increase regional integration with investments mainly along the Madagascar-Mauritius axis; and, (3) supporting IFC clients to improve internal capacity by providing specialist training to bank’s SME loan officers and SME-Owner managers to improve financial and managerial literacy.

The JMAP Bank-Fund Matrix (2013)
TitleProductsProvisional timing of missionExpected delivery date
A. Mutual Information on Relevant Work Programs
The World Bank work program in the next 12 monthsSecond Private Sector Competitiveness DPLNot foreseenApril 2013
Second Public Sector Performance DPLNot foreseenMarch 2013
Public Expenditure ReviewMarch 2013FY13
Mauritius Infrastructure ProjectFebruary 2013FY14
Road Asset Management and Safety Project preparationFebruary 2013FY14
Strengthening Governance and Anti-CorruptionMarch/April 2013FY14
Improving CompetitivenessNot foreseenFY14
Preparation of a Grid Code, Feed-in-Tariffs & Model Energy Supply Purchase Agreements for Renewable Energy Systems Greater than 50ksMarch/April 2013FY14
A. Mutual Information on Relevant Work Programs
The IMF work program in the next 12 months2013 Article IV consultationJanuary 2013Board meeting in April 2013
Multi-sector statistics mission (STA)January 2013
Central Banking Law and Monetary Policy Frameworks (LEG, MCM, AFR)Second Quarter of 2013
B. Requests for Work Program inputs
Bank request to FundMacroeconomic frameworkJanuary 2013
Assessment LetterJanuary 2013
Fund request to BankBackground sector information to complement Article IV report.January 2013

Relations with The African Development Bank Group

(As of February 7, 2013)

The African Development Bank (AfDB)’s 2009–2013 Country Strategy Paper (CSP) for Mauritius provides the framework for its partnership with the country. The CSP has two pillars (i) reducing bottlenecks to competitiveness and trade and (ii) Enhancing public sector efficiency and social service delivery. The Bank’s assistance to Mauritius combines lending and non-lending activities. Within the first pillar, the lending program currently focuses on infrastructure development particularly transport, ports and energy. The lending program within the second pillar focuses on an operation supporting water and sanitation services. The largest on-going lending operation is a policy-based lending in form of direct budget support that supports both pillar I and II. About US$200 million has been disbursed. The Bank is currently reviewing the Government’s request to extend the operation for another two years to allow disbursement of the outstanding balance to finance its infrastructure program. The Bank is also providing MIC grants to support policy reforms, capacity building and studies in specific areas within the framework of the two strategic pillars. These include support to public debt management, public sector investment program, preparation of the sewerage master plan, review of outline planning, statistical capacity building and preparation of sector strategies for health, gender and ICT to improve the Performance based budgeting (PBB). In line with its Regional Integration Strategy for Southern African, the Bank is supporting the country’s vision of becoming a regional center of excellence. In this area the Bank has collaborated with the IOC in partnership with the EU, COMESA and SADC to support the Regional Multi-Disciplinary Centre of Excellence. The Bank also partnered with the Commonwealth Secretariat in supporting Capacity Building for Public Debt Management. Other past collaboration with the World Bank (and other partners) has included the following sectors: water, sewerage, and sanitation (the Plaines Wilhems Sewerage Project) and transport (Southeastern Highway). The Bank also collaborates very closely with other development partners including the World Bank, EU, AFD and UNDP in supporting structural reforms through its policy based lending. The CSP Mid Term Review Report of 2011 envisages continued collaboration on the policy based lending, MIC Grants and studies. The Bank will in 2013 prepare a new CSP for Mauritius for period 2014–2018.

Statistical Issues

Mauritius—Statistical Issues AppendixAs of March 12, 2013
I. Assessment of Data Adequacy for Surveillance
General: Data provision is adequate for surveillance. However, balance of payments (BOP) and international investment position (IIP) statistics could be further improved. The authorities are aware of this situation and are continuing work in this regard.
Balance of Payments and International Investment Position Statistics: The authorities are in the process of reinforcing the statistical framework. Already, there were significant improvements in reducing the errors and omissions category in the BOP statistics.
II. Data Standards and Quality
Participant in the GDDS since September 2000, Mauritius subscribed to Special Data Dissemination Standard (SDDS) on February 28, 2012. Mauritius is the second Sub-Saharan African country to subscribe to the SDDS.A data ROSC report was published in August 2008.
Mauritius: Table of Common Indicators Required for SurveillanceMarch 12, 2013
Date of latest observationDate receivedFrequency of data7Frequency of reporting7Frequency of publication7Memo Items:
Data Quality-Methodological soundness 8Data Quality-Accuracy and reliability9
Exchange RatesMarch 201303/2013DDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1January 201303/2013MMM
Reserve/Base MoneyJanuary 201303/2013MMMO, LO, LO, LOO, O, O, O, LO
Broad MoneyJanuary 201303/2013MMM
Central Bank Balance SheetJanuary 201303/2013MMM
Consolidated Balance Sheet of the Banking SystemJanuary 201303/2013MMM
Interest Rates2January 201303/2013MMM
Consumer Price IndexJanuary 201302/2013MMMO, LO, O, OO, O, O, O, O
Revenue, Expenditure, Balance and Composition of Financing3 – General Government4Q4/201202/2013QQQLO, O, O, OLO, O, O, O, NO
Revenue, Expenditure, Balance and Composition of Financing3– Central GovernmentQ4/201202/2013QQQ
Stocks of Central Government and Central Government-Guaranteed Debt5Q4/201202/2013QQQ
Exports and Imports of Goods and ServicesQ3/201201/2013QQQ
External Current Account BalanceQ3/201201/2013QQQO, LO, LO, LOLNO, LNO, LO, LO, NO
GDP/GNPQ3/201202/2013QQQO, LO, O, LOLO, O, LNO, LO, O
Gross External DebtQ4/201202/2013QQQ
International Investment Position6Q3/201202/2013QQQ

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); Weekly (W); Monthly (M); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA).

Reflects the assessment provided in the data ROSC published in August, 2008, and based on the findings of the mission that took place during November 29–December 7, 2007 for the dataset corresponding to the variables in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 8, except referring to international standards concerning source data, assessment and validation of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); Weekly (W); Monthly (M); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA).

Reflects the assessment provided in the data ROSC published in August, 2008, and based on the findings of the mission that took place during November 29–December 7, 2007 for the dataset corresponding to the variables in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 8, except referring to international standards concerning source data, assessment and validation of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

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