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Mauritius: Staff Report for the 2015 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund. African Dept.
Published Date:
March 2016
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Information about Asia and the Pacific Asia y el Pacífico
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Relations with the Fund

(As of December 31, 2015)

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

General Resources Account:

SDR Million%Quota
Quota101.60100.00
Fund holdings of currency (Exchange Rate)69.4368.34
Reserve Tranche Position32.1731.67

SDR Department:

SDR Million%Allocation
Net cumulative allocation96.81100.00
Holdings100.01103.31

Outstanding Purchases and Loans: None

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

Overdue Obligations and Projected Payments to Fund 1/

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

Forthcoming
20162017201820192020
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 Catastrophe Containment and Relief (CCR): 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 January 29, 2016, US$1 was equivalent to MUR 36.07

Article IV Consultation

Mauritius is on the standard 12-month cycle. The last Article IV consultation staff report (Country Report No. 14/107, May, 2014) was completed by the Executive Board on April 21, 2014. A Financial System Stability Assessment update was completed by a joint IMF–World Bank team on April 20, 2007.

Technical Assistance (2006–2015)

AFRITAC South

Updating the Finance & Audit Act (2008) and drafting revised underlying financial regulations, February 2012.

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

Implementation of Basel III, September 2012

Fiscal Legal Framework, September 2012

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

The Development of Public Finance Management Act, August 201

Fiscal Law VAT/Tax Law Reform, August/September 2013

Fiscal Risks Related to Operation of SOEs, September 2013

Grant in Aid Formula for Local Authorities, September/October 2013

Customs Law, January/February 2014

Inflation Targeting, August 2014

FAD

Fiscal adjustment strategy and Poverty and Social Impact Analysis (PSIA), February-March 2006.

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

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

Refining program budgeting and performance management, September 200

Refining program budgeting and performance management, September 2010

PEFA, November 2010

Revenue administration, June 2011

LEG

AML/CFT, July 2011

AML/CFT, February 2012

Central banking legislation, February 2012

Monetary Policy Framework and Central Bank Act, June 2013

MCM/MFD

Financial sector policy and strategy, January 2006.

Financial sector policy and strategy, July 2006.

Banking supervision/monetary operations/monetary policy, October 2006.

Financial sector policy and strategy, January 2007.

Financial Sector Assessment Program (FSAP), February 2007.

Financial sector policy and strategy, March-April 2007.

Foreign exchange markets, August 2007.

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

Anti-money laundering (AML), August 2010

Macroeconomic modeling, August/September 2010

Macroeconomic modeling and forecasting, October 2011

Technical assistance needs assessment, October 2011

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

Liquidity and Debt management and Secondary Market Development, December 2012

Monetary Policy Implementation, May/June 2013

Public Debt Management, December 2013

Inflation Forecasting and Modeling, January 2014

Review of the Functioning of Supervisory College, February 2014

Compliance with Basel II Capital Adequacy Framework, March 2014

Contingency Planning for Crisis Preparedness and Management, November 2014

Bank and Insurance Resolution, June 2015

Financial Sector Assessment Program (FSAP), November 2015.

STA

Multisector statistics, November 2006.

Balance of payments statistics, March 2007.

Balance of payments module mission, October 2007.

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

The Observance of Standards and Codes (ROSC) mission, November-December 2007.

National accounts statistics, February 2008.

Phase II SDSS Government Finance Statistics, March 2008.

Phase II SDSS Multisector Statistics, March-April 2008.

Monetary and financial statistics, April 2008.

Balance of payments statistics, May 2009.

National accounts statistics, November 2009

National accounts statistics, April 2010

Balance of payments statistics, July 2010

International investment position, October 2010

Government finance statistics, January 2011

Balance of payment statistics, September 2011

STA/DFID mission on external sector statistics, October 2011

Balance of Payments Statistics and International Investment Position, November 2012

Multi-sector statistics, January/February 2013

External Statistics, September 2013

External Statistics, March 2014

Monetary and Financial Statistics, March/April 2014

Government Financial Statistics, April/May 2014

Price Statistics, August 2014

External Statistics, February/March 2015

National Accounts, April 2015

Resident Representative: None.

The JMAP Bank-Fund Matrix (2016)

(As of February 5, 2016)

The IMF and World Bank Mauritius teams met on December 3, 2015 to discuss a Joint Managerial Action Plan (JMAP). The team from the World Bank comprised of Mr. Sienaert (Senior Economist), and from the IMF of Messrs. Mecagni, Inui, Touna Mama, Ms. Newiak (all AFR) and Mr. Kerry (SPR).

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

The World Bank Group’s work program encompasses infrastructure, trade and competitiveness, public sector reform and the financial and social sectors. A Systematic Country Diagnostic (SCD), prepared by WBG staff in close consultation with national authorities and other stakeholders, was released in July 2015. The SCD assesses the priorities of Mauritius to accelerate sustainable economic growth while improving the welfare of the less well off. Drawing on SCD findings, a new Country Partnership Framework for FY 2016-2020 is under preparation. On-going and planned Bank assistance to Mauritius includes:

  • Infrastructure. Advisory services relating to energy and water sector investments are ongoing.
  • Policy reform support. The Bank is expected to approve in 2016 a new DPL series. The operation is expected to support reforms to accelerate regional economic integration through improvements in trade logistics and services.
  • Poverty and labor market analytics. The Bank has prepared a report on poverty and income disparity to analyze the impact that recent economic growth has had on income distribution in the country. Follow-up work is anticipated to inform policies to address structural labor market challenges such as large gender gaps and skills mismatches, and to better understand how Mauritius’ fiscal sector affects the income distribution.
  • Additional advisory services. World Bank analysis to inform policymaking in the strategic priority area of developing the “Ocean Economy” is ongoing. Continued World Bank support for education policy reform and implementation is also anticipated, as is advisory support as Mauritius seeks to lift its international competitiveness including through reforms aimed at increasing the ease of doing business.

International Finance Corporation (IFC). The IFC has focused its intervention in Mauritius in the financial services sector along three axes: (1) 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 regional investments mainly along the Madagascar-Mauritius axis; leveraging on Mauritius International Financial Center, this approach has provided a safe platform for investors and made possible CTT expansion in Sub-Saharan Africa or Healthcare projects in Madagascar; and, (3) providing SMEs capacity building solutions so as to improve financial institutions’ internal SMEs lending capacities and improve SME-Owner managers’ financial and managerial literacy.

The JMAP Bank-Fund Matrix (2016)
TitleProductsProvisional timing of

mission
Expected delivery

date
A. Mutual Information on Relevant Work Programs
The World Bank work program in the next 12 monthsAccelerated Program for Economic Integration DPLConducted previouslyApril 2016
Mauritius Inclusiveness of Growth and Shared ProsperityConducted previouslyFebruary 2016
Mauritius Water Sector AdvisoryNot foreseenFY16
The IMF work program in the next 12 months2016 Article IV consultationDecember 2016Board meeting in February 2017
TA missions to follow up FSAP recommendations20162016-2017
B. Requests for Work Program inputs
Bank request to FundMacroeconomic frameworkApril 2016
Fund request to BankBackground sector information to complement Article IV report.January 2016

Statistical Issues

Statistical Issues Appendix As of January 31, 2016
I. Assessment of Data Adequacy for Surveillance
General: Data provision is adequate for surveillance. However, there are important remaining gaps in offshore sector data. The GBC survey needs to cover GBC2s as well as GBC1s and collect better information on linkages between GBCs and domestic economy. Also, real estate price indices should be introduced. 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 Surveillance January 31, 2016
Date of latest

observation
Date

received
Frequency of

data7
Frequency of

reporting7
Frequency of

publication7
Memo Items:
Data Quality-

Methodological

soundness 8
Data Quality-

Accuracy and

reliability9
Exchange RatesJanuary 201601/2016DDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1December 201501/2016MMM
Reserve/Base MoneyDecember 201501/2016MMMO, LO, LO, LOO, O, O, O, LO
Broad MoneyDecember 201501/2016MMM
Central Bank Balance SheetDecember 201501/2016MMM
Consolidated Balance Sheet of the Banking SystemDecember 201501/2016MMM
Interest Rates2December 201501/2016MMM
Consumer Price IndexDecember 201501/2016MMMO, LO, O, OO, O, O, O, O
Revenue, Expenditure, Balance and Composition of Financing3 – General Government4Q4/201501/2016QQQLO, O, O, OLO, O, O, O, NO
Revenue, Expenditure, Balance and Composition of Financing3– Central GovernmentQ4/201501/2016QQQ
Stocks of Central Government and Central Government-Guaranteed Debt5Q4/201501/2016QQQ
Exports and Imports of Goods and ServicesQ3/201511/2015QQQ
External Current Account BalanceQ3/201512/2015QQQO, LO, LO, LOLNO, LNO, LO, LO, NO
GDP/GNPQ3/201512/2015QQQO, LO, O, LOLO, O, LNO, LO, O
Gross External DebtQ4/201501/2016QQQ
International Investment Position6Q3/201512/2015QQQ

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liab ilities 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 liab ilities 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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