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 offshore. 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. A new household survey took place in 2015 and 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 ranks 156th among 188 countries on the United Nations Human Development Index.
Mauritania faces interlocking macroeconomic challenges. With the end of the commodity super-cycle in the second half of 2014 and the collapse of iron ore prices, pressures on growth have started to appear in Mauritania. With a 10.3% drop in mineral production, economic activity continued to slow down in 2015. Real GDP growth fell to 3% by the end of the year, down from 6.4% in 2014. Moreover, all non-tradeable domestic sectors that had previously benefited on the back of the mining boom, such as utilities, transport, and telecom, showed signs of deceleration. Even the construction sector was impacted despite benefitting from public investment spending, with imports of construction materials dropping by 3.8%. The terms of trade deterioration (-11 percent in 2015) has compelled Mauritanian authorities to devalue the Ouguiya, which depreciated by 5% vis-à-vis 2014. Following the decision to raise VAT (from 14 to 16%), core inflation has accelerated from 1.2% in 2014 to 2.6% in 2015. Nevertheless, headline inflation remained largely subdued over the year at 0.5%, following a 1.1% decline in food prices. Figures for January 2016 confirm this trend.
Mauritania faces multiple development challenges. These include the efficient use of revenue derived from natural resources, competitiveness, diversification, and poor governance.
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.
Furthermore, 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: Apr 21, 2016