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PRESS RELEASE May 24, 2019

Mauritania Needs Structural Reforms to Support Growth Driven by the Private Sector

Improving the business climate to promote the development of the private sector

NOUAKCHOTT, May 24, 2019— Having restored macroeconomic stability, one of the challenges now facing Mauritania is to lift the structural obstacles that are hampering the private sector’s development. Such is the conclusion of the second Economic Update for Mauritania published today by the World Bank. With growth rising from 3% in 2017 to 3.6% in 2018, the economy continues to post gradual recovery associated with greater macroeconomic stability.

The report entitled “Improving the Business Climate to Promote the Development of the Private Sector” points out the role the Mauritanian Government’s fiscal prudence and reforms played in restoring macroeconomic balance. As explained by Samer Matta, World Bank economist and main author of the report, “The reforms generated tax revenue gains estimated at some 0.7% and 0.8% of GDP in 2017 and 2018.” Yet despite these positive developments, the labor market has deteriorated and remains marked by a huge gender divide, youth marginalization, and informal employment. The banking sector also suffers from certain weaknesses that the Government is endeavoring to solve.

The short- and medium-term outlook remains bright with growth projected to increase to an average of 6.2% for the 2019-2021 period, driven by a thriving primary sector, an upturn in mining production, and the development of the GTA gas project. This high growth rate will be accompanied by moderate inflation, fiscal surpluses that will bring the public debt down, and reduced external pressures. Nevertheless, these macroeconomic forecasts are subject to internal and external risks.

The report focuses a chapter on recent business climate developments and suggests reforms to promote private sector growth. The reforms conducted in recent years have propelled Mauritania up through the international Doing Business ranking from 176th place in 2015 to 148th in 2019. Yet, as explained by Théodore Anthonioz, private sector specialist and co-author of the report, “Despite this significant improvement, there remain some major challenges to be taken up if the business climate is to really stimulate the private sector’s development in Mauritania.”

In particular, the report highlights that the main constraint on Mauritanian businesses is access to credit. It therefore recommends that the Government’s future roadmaps for business prioritize access to credit, especially for small and medium enterprises. The World Bank also recommends other reforms for private sector take-off and job creation in Mauritania including action against corruption, which businesses point to as their number two constraint; competition policy reform; membership of a regional integration body; promoting gender equality in legal matters; building human capital; and improving the land policy.



Mademba Ndiaye