Mauritania is mostly a desert country, with a population of about 3.5 million. In 2013, its per capita gross national income (GNI) stood at $1,060. 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 export with significant growth potential. In addition, Mauritania is a modest oil producer and possesses considerable natural gas deposits in the Banda region. 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 taken 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 the most recent poverty assessment done in 2008, the poverty rate declined from 46.7% to 42% from 2004 to 2008. In early 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’s GDP growth rate stood at 6.7% in 2013 and per capita GNI was estimated at $1,060, making Mauritania a lower-middle income country. Higher international commodity prices and a prudent economic policy helped the country stabilize its macroeconomic indicators, build up its reserves, and increase its fiscal space. The current account balance is negative but has been improving since 2013. Foreign investments exceeded $1 billion between 2012 and 2013, a factor that offsets the high current account deficits. Iron ore continues to drive the economy and production is expected to increase in the future. Offshore gas production will begin in 2015 under the Banda Gas-to-Power Project for which the World Bank is providing assistance. In 2013, the fisheries agreement between the European Union and Mauritania was ratified and negotiations aimed at concluding a new agreement were started in 2014. Mauritania’s fiscal balance declined (1.1% in 2013), but is forecasted to become positive again in 2014. The fiscal situation was buttressed by mining sector revenue, tax revenue, and greater fiscal transparency. Tax revenue doubled between 2009 and 2013, while inflation returned to a standard rate of 4.2%. Foreign exchange reserves remained high in 2013—exceeding import volume over a seven-month period. The outlook for 2014 and in the medium term is positive—GDP growth is expected to remain at over 6% in 2014 and to climb to 6.5% in the medium term. The overall fiscal balance is projected to be slightly positive during the same period.
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 10, 2014