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Mauritius: Staff Report for the 2012 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund
Published Date:
March 2012
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APPENDIX I. RELATIONS WITH THE FUND

(As of January 31, 2012)

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

II. General Resources Account:SDR Million%Quota
Quota101.60100.00
Fund holdings of currency (Exchange Rate)70.0768.96
Reserve Tranche Position31.5431.05
III. SDR Department:SDR Million%Allocation
Net cumulative allocation96.81100.00
Holdings99.91103.21

IV. Outstanding Purchases and Loans: None

V. Latest Financial Arrangements:

Date ofExpirationAmount ApprovedAmount Drawn
TypeArrangementDate(SDR Million)(SDR Million)
Stand-ByMar 01, 1985Aug 31, 198649.0049.00
Stand-ByMay 18, 1983Aug 17, 198449.5049.50

VI. Projected Payments to Fund 1/

(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.

VII. Implementation of HIPC Initiative: Not Applicable

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

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

X. 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 February 13, 2012, US$1 was equivalent to MUR 28.94.

XI. Article IV Consultation

Mauritius is on the standard 12-month cycle. The last Article IV consultation staff report (Country Report No. 11/96, May, 2011) was completed by the Executive Board on April 14, 2011. A Financial System Stability Assessment update was completed by a joint IMF–World Bank team on April 20, 2007.

XII. Technical Assistance (2004–2012)

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

Resident Representative: None.

APPENDIX II. THE JMAP BANK-FUND MATRIX (2012)

(As of February 9, 2012)

The IMF and World Bank Mauritius teams met on February 9 to discuss a Joint Managerial Action Plan (JMAP). The team from the World Bank comprised Mr. Muñoz (senior country economist) and from the IMF, Messrs. Petri, Culiuc, David and Ms. Svirydzenka (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 the Fiscal Affairs Department (FAD) and AFRITAC South (AFS); financial sector stability and government debt and asset management through the Monetary and Capital Markets Department (MCM), and enhancements to macroeconomic statistics with the support of the Statistics Department (STA).

The World Bank’s work program entails continuing work on infrastructure, competitiveness, public sector reform, social sectors and social protection. The 2007-2013 World Bank Country Partnership Strategy for Mauritius 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:

  • The Mauritius Infrastructure Project signed in December 2009 seeks to support the government investment program in transport, water and electricity. Additional support in infrastructure is envisaged through fee for services and a new infrastructure project under discussion.
  • The IFC has focused its interventions on three key sectors: infrastructure, tourism and financial services. Its activities have been targeted at: supporting the mobilization of foreign direct investment to these sectors; introducing climate change mitigation and cleaner production standards and best practices; improving access to finance for SMEs; and promoting South-South transactions.
  • The Bank is expected to approve in March 2012 two new two year Development Policy Loans of $20 million and US$15 million each per year. 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.
  • In line with the DPL agenda, a civil service policy note will be delivered in FY12, to take stock of the challenges in the sector and support the authorities in the design and implementation of the on-going civil service reform.
  • The Bank has initiated dialogue with the government to prepare a Public Expenditure Review report in FY13 to gain efficiency and effectiveness of the public sector; taking stock and propose areas of improvement in public enterprises and parastatals; benchmarking service delivery with peer countries and analyzing the redistributive impact of public services delivered.
  • The Bank envisages a series of policy notes to identify opportunities in air space cooperation, tourism, ports and fisheries between Indian Ocean Countries.
The JMAP Bank-Fund Matrix (2012)
TitleProductsProvisional timing of missionExpected delivery date
A. Mutual Information on Relevant Work Programs
The World Bank work program in the next 12 monthsPrivate Sector Competitiveness DPLNot foreseenMarch 2012
Public Sector Performance DPLNot foreseenMarch 2012
Civil Service Reform Policy NoteMarch 2012April 2012
Mauritius Infrastructure Project IIFebruary 2012FY13
Public Expenditure ReviewMarch 2012FY13
ROSC IAISNot foreseenFebruary 2012
ROSC Corporate GovernanceApril 2012March 2012
Policy notes on Indian Ocean CountriesNot foreseenFY13
A. Mutual Information on Relevant Work Programs
The IMF work program in the next 12 months2012 Article IV consultationJanuary 2012Board meeting in March 2012
TA on conglomeration risks, the regulatory structure, deposit insurance, bank resolution regime, and competition in the banking sector (MCM)Second Quarter of 2012
TA on government debt and asset management (MCM)Third Quarter of 2012
B. Requests for Work Program inputs
Bank request to FundMacroeconomic frameworkFebruary 2012
Assessment LetterFebruary 2012
Fund request to BankBackground sector information to complement Article IV report.February 2012
C. Agreement on Joint Products and Missions
Joint products
APPENDIX III. RELATIONS WITH THE AFRICAN DEVELOPMENT BANK GROUP

(As of February 13, 2012)

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. A review of the operation will be conducted in March, 2012. 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 is working with the IOC in partnership with the EU, COMESA and SADC to support the recently launched Regional Multi-Disciplinary Centre of Excellence. The Bank is also collaborating with the Commonwealth Secretariat in supporting Capacity Building for Public Debt Management. 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 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.

Table 1.Operations Summary as of February 13, 2012Operations since: 1975 Total number of operations 37: 26 projects, 3 policy-based operations; 3 studies; 5 lines of credit.
Source of financingCommitments net (UA million)Percentage shareDisbursed amount (UA million)Percentage disbursed1
ADB766.2598.28217.1027.85
ADF24.970.640.860.11
NTF38.401.083.300.42
MIC grant2.370.300.310.04
Total779.62100.00221.2628.38
Source: African Development Bank
Source: African Development Bank

Questions may be referred to Carlos Mollinedo (email: C.MOLLINEDO@AFDB.ORG)

APPENDIX IV. STATISTICAL ISSUES
MAURITIUS—Statistical Issues AppendixAs of February 10, 2012
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: Coverage and accuracy of BOP and IIP statistics have diminished as a consequence of the growth of global business license holders. 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 Surveillance February 10, 2012
Date of latest observationDate receivedFrequency of data7Frequency of reporting7Frequency of publication7Memo Items:
Data Quality-Methodological soundness 8Data Quality-Accuracy and reliability 9
Exchange RatesFebruary 201202/2012DDD
International Reserve Assets and Reserve

Liabilities of the Monetary Authorities1
December 201102/2012MMM
Reserve/Base MoneyDecember 201102/2012MMMO, LO, LO, LOO, O, O, O, LO
Broad MoneyDecember 201102/2012MMM
Central Bank Balance SheetDecember 201102/2012MMM
Consolidated Balance Sheet of the Banking SystemDecember 201102/2012MMM
Interest Rates2December 201102/2012MMM
Consumer Price IndexJanuary 201202/2012MMMO, LO, O, OO, O, O, O, O
Revenue, Expenditure, Balance and Composition of Financing3 – General Government4Q4/201102/2012QQQLO, O, O, OLO, O, O, O, NO
Revenue, Expenditure, Balance and Composition of Financing3 – Central GovernmentQ4/201102/2012QQQ
Stocks of Central Government and Central Government-Guaranteed Debt5Q4/201102/2012QQQ
Exports and Imports of Goods and ServicesQ3/201102/2012QQQ
External Current Account BalanceQ3/201102/2012QQQO, LO, LO, LOLNO, LNO, LO, LO, NO
GDP/GNPQ3/201102/2012QAAO, LO, O, LOLO, O, LNO, LO, O
Gross External DebtQ4/201102/2012QQQ
International Investment Position6Q4/201102/2012QQQ

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.

1Percentage of commitments net relative to each respective source of financing.
2African Development Fund.
3Nigeria Trust Fund.

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