Nouakchott, August 21, 2014 — Mauritania registered a robust growth rate of 6.7% in 2013 and continues to be characterized by macroeconomic stability. At the same time, the country remains exposed to vulnerabilities related to lack of diversification, international prices volatility and reliance on foreign inflows. Sound management of natural resources is essential to foster inclusive and long-term growth, according to the World Bank’s first Mauritania Economic Update, launched today.
The key policy question facing Mauritania is how to set up a foundation for long-term growth. The report highlights the need to reinvest the revenue generated by selling natural resources into other forms of capital.
“A resource-rich developing economy like Mauritania, with its high growth rates, can become one of the success stories in Sub-Saharan Africa. The country has considerable untapped potential and, with the ongoing diversification agenda and efforts to increase productivity, can rapidly achieve sustainable and inclusive development” says Vera Songwe, Country Director for Mauritania at the World Bank Group.
The report favors the recent shift of public expenditure, which put the accent on public investments on energy and key infrastructure projects, as well as on phasing-out of subsidies and focusing on preventative rather than reactionary methods to crises.
The wealth of Mauritania is being depleted, according to current utilization patterns. However, renewable resources account for approximately two thirds of natural wealth and with effective management and adequate policies Mauritania can create a constant flow of resources and ensure the same – or higher – levels of welfare for the future generations.
”For a considerably endowed country like Mauritania, good management of natural resources is essential to ensuring that growth is shared” says Gianluca Mele, World Bank Economist for Mauritania and author of the report.
The report details major challenges facing Mauritania. While the country has succeeded in increasing per capita income over recent years, income distribution has remained relatively unchanged for the last two decades and the challenges of unemployment remain daunting. Mauritania has recorded positive improvements in fiscal consolidation, and the report encourages to continue consolidating the Public Financial Management agenda by strengthening the efficiency of medium term expenditure frameworks (MTEFs), and by streamlining public procurement procedures.
On social development, while Mauritania has registered remarkable achievements in primary enrollment and gender balance in schools, more needs to be done to improve the quality of health-related services, as the maternal and infant mortality Millennium Development Goals appear out of reach. It is also critical that the country ensures public sector selection processes follow transparent paths built on meritocracy, and that statistical intelligence is produced and disseminated regularly.