Mauritania is a mostly desert country, with a population of about 3.5 million. In 2014, its per capita gross national income (GNI) stood at $1,270. The country has a wealth of natural resources, particularly in the mining sector, and has experienced sustained growth thanks to a period of high international commodity prices. The country is Africa’s second leading exporter of iron ore and also exports gold and copper, two exports with significant growth potential. In addition, Mauritania is a modest oil producer and possesses considerable natural gas deposits in the offshore Banda field. Mauritania’s waters have some of the most abundant fish stocks in the world.
After a military coup followed by a transition to democracy in 2005-2006, the country’s authorities engaged in constructive dialogue with development partners. Mauritania was granted debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). Following another military coup in 2008, the international community suspended most of its activities in Mauritania. The World Bank reengaged in September 2009, following elections that led to the formation of a national unity government and the lifting of international sanctions. In the past several years, Mauritania has enjoyed political stability with the June 2014 presidential elections taking place peacefully.
Despite robust economic growth, Mauritania’s poverty rate remains high, particularly in rural areas. The main constraints to poverty reduction are low productivity of the rural economy, a lack of human capital-intensive sectors, governance issues, the quality of public services, and vulnerability to exogenous shocks. According to a poverty assessment from 2008, the poverty rate declined from 46.7% to 42% from 2004 to 2008. In 2015, a new household survey will provide more recent data. Mauritania’s human development index moved up from 0.424 to 0.487 between 2004 and 2014, compared to an average of 0.502 for Sub-Saharan Africa.
Mauritania faces interlocking macroeconomic challenges. Annual real GDP growth is expected to decline to 3.2% in 2015, as a consequence of the sharp decline in iron ore prices in the latter part of 2014. Agriculture and fisheries are expected to grow at 4% in 2015. The fishery sector maintains its momentum, and benefits from the finalization – in July 2015 – of a long-negotiated bilateral agreement with the European Union. Services are the largest contributor to growth, followed by the primary sector. On the expenditure side, a substantial decrease in private investment has underpinned a sharp decline (by roughly 24%) in fixed capital formation over the last year. The severe terms of trade deterioration (-23% in 2014 and -11% in 2015) has compelled the Mauritanian authorities to accompany a devaluation of the national Ouguiya, which depreciated by 5% vis-à-vis 2014 although it has actually appreciated in real terms due to inflation differentials with Mauritania’s major trading partners. In spite of this, inflation has been contained at 4.5%, a slight increase over 2014.
Mauritania faces multiple development challenges. These include the efficient use of revenue derived from natural resources, competitiveness, diversification, and poor governance.
Efficient Use of Resources
The extractive industries, which drive the country’s growth, create very few jobs. Consequently, it is very important for the government to adopt an appropriate tax system that allows for both the recovery of an equitable portion of the profit from natural resources and to promote well-structured policies targeting the reinvestment of earnings as well as investments, so as to generate sustainable and better distributed returns. In the agricultural and fisheries sectors, which employ most of the labor force and have significant potential, productivity levels are low and the sectors remain vulnerable to climate change.
Diversification and Competitiveness
Mauritania’s competitiveness is hampered by a small formal economic base, a lack of diversification, and a weak legal framework. Since the 1990s, Mauritania’s exports have revolved around the mining sector and fisheries which, on average, accounted for four-fifths of total exports between 1990 and 2000. In recent years, apart from crude oil, diversification has not increased. On the contrary, exports have become even more concentrated in recent times (this concentration increased between 2012 and 2013), with iron representing more than 50% of total exports.
Reducing inequalities and tackling wealth redistribution are key challenges that Mauritania can overcome, provided that it continues its commitment to good governance, particularly in the mining sector and in the supervision of State enterprises. Good governance also plays a key role in strengthening social resilience in order to facilitate the improvement of health services, particularly in the areas of maternal health, infant and child mortality, and combating hunger.
Last Updated: Dec 07, 2015