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WEEKLY NEWSLETTER
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Mauritania
Index
In the mid-1980s, Mauritania's monetary and banking structure
consisted of the Central Bank of Mauritania (Banque Centrale de
Mauritanie--BCM) and six commercial banks established with the
participation of the government or of the BCM. Other major
shareholders included various Arab interests, which included
Saudi and Libyan participation.
By the early 1980s, Mauritania's banking sector was
deteriorating, chiefly because of an accumulation of
nonperforming loans that constituted some 50 percent of
commercial bank assets. Between 1981 and 1983, government
borrowing from the BCM and commercial banks rose to statutory
limits. The private sector and public enterprises were thus
forced to borrow increasingly from foreign banks to cover their
severe liquidity problems.
As a result of this spiral of debt, in 1985 the government,
with IMF and World Bank support, undertook measures to
restructure the banking system. Measures taken under the 1985-88
Economic Recovery Program instituted a monetary and credit policy
favoring the private sector and an austerity program for the
public sector. Furthermore, in 1987 the government, in
cooperation with the World Bank, adopted a reform program that
focused on three areas: reforming credit policies and banking
regulations, strengthening the BCM, and restructuring four of the
six commercial banks, including the International Bank of
Mauritania (Banque Internationale pour la Mauritanie--BIMA), of
which the BCM held 91 percent.
Data as of June 1988
At independence, Mauritania became a member of the West
African Monetary Union (Union Monétaire Ouest Africaine--UMOA)
but withdrew in 1973 to demonstrate its independent economic
identity. When it withdrew, the government also relinquished
membership in the African Financial Community (Communauté
Financière Africaine--CFA), whose currency--the CFA franc--was
freely convertible to French francs. Mauritania then created its
own currency, the ouguiya, and an independent central bank.
Banking
In the mid-1980s, Mauritania's monetary and banking structure
consisted of the Central Bank of Mauritania (Banque Centrale de
Mauritanie--BCM) and six commercial banks established with the
participation of the government or of the BCM. Other major
shareholders included various Arab interests, which included
Saudi and Libyan participation.
By the early 1980s, Mauritania's banking sector was
deteriorating, chiefly because of an accumulation of
nonperforming loans that constituted some 50 percent of
commercial bank assets. Between 1981 and 1983, government
borrowing from the BCM and commercial banks rose to statutory
limits. The private sector and public enterprises were thus
forced to borrow increasingly from foreign banks to cover their
severe liquidity problems.
As a result of this spiral of debt, in 1985 the government,
with IMF and World Bank support, undertook measures to
restructure the banking system. Measures taken under the 1985-88
Economic Recovery Program instituted a monetary and credit policy
favoring the private sector and an austerity program for the
public sector. Furthermore, in 1987 the government, in
cooperation with the World Bank, adopted a reform program that
focused on three areas: reforming credit policies and banking
regulations, strengthening the BCM, and restructuring four of the
six commercial banks, including the International Bank of
Mauritania (Banque Internationale pour la Mauritanie--BIMA), of
which the BCM held 91 percent.
Data as of June 1988
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