• With growth of over 6% in 2012, a stable fiscal policy and inflation under control, Mauritania is enjoying favourable macroeconomic conditions, welcomed by the International Monetary Fund (IMF).

  • However, these achievements are not reflected in the social situation, still characterised by high poverty and high unemployment. Moreover, the crisis in Mali and the influx of refugees risk undermining the relative social and political stability of the country.

  • Mauritania is unable to build a foundation for a productive and inclusive economy with its vast mineral resources and fisheries. However, recognising the critical level of unemployment, particularly youth unemployment, the country intends to diversify and strengthen its production capacity by targeting inclusive growth driven by labour-intensive sectors.

Overview

Mauritania has had a high growth rate since 2010, estimated at 6.0% in 2012. The main drivers of growth were agriculture, following good rainfall, and particularly construction and public works. Both sectors have recorded increases in volume in 2012 of 39.6% and 23.3% respectively. Fishing is also doing well, with growth of 14.8%. The difficult international situation has, however, affected the mining industry, particularly iron, which is the country’s main export.

Macroeconomic stability has been underpinned by strong fiscal management and prudent monetary policy. The Mauritanian government is pursuing its revenue collection policy by modernising tax administration and plans better targeting of public spending and commodity subsidies. The Central Bank of Mauritania (Banque Centrale de Mauritanie, BCM) has acquired tools to control the money supply in order to manage inflation. The level of international reserves stands at USD 750 million, the equivalent of 5.3 months of imports.

Diversification of the economy, which is dependent on the mining sector, is hampered by the narrow production base and weak domestic private investment, which is constrained by a legal and regulatory framework unfavorable to business. The main weaknesses of the Mauritanian economy are corruption, slow administration and poor infrastructure; transport and electricity in particular.

Furthermore, good macroeconomic performance does not seem to have had any significant impact on employment or social protection and development indicators. Efforts to achieve some of the Millennium Development Goals (MDGs), such as the level of education, have achieved progress. But unemployment, poverty, food insecurity, poor access to health care and gender inequalities remain serious challenges for the country.

The priorities then are the promotion of the private sector to expand the production base, but also the establishment of social safety nets, the modernisation and transparency of administration, major infrastructure projects and better economic governance and social policy.

Figure 1: Real GDP Growth 2013 (North)

Table 1: Macroeconomic indicators

 2011201220132014
Real GDP growth3.966.45.5
Real GDP per capita growth1.63.74.23.3
CPI inflation5.74.96.25.6
Budget balance % GDP-1.5-3.6-1.9-3.6
Current account % GDP-7.3-18.5-21.1-18.8

Recent Developments & Prospects

Table 2: GDP by Sector (percentage of GDP)

 20072012
Agriculture, forestry & fishing--
Agriculture, hunting, forestry, fishing18.817
Construction6.66.1
Electricity, gas and water00
Electricity, water and sanitation--
Extractions--
Finance, insurance and social solidarity--
Finance, real estate and business services11.111.1
General government services--
Gross domestic product at basic prices / factor cost100100
Manufacturing4.14
Mining27.635.2
Other services--
Public Administration & Personal Services--
Public Administration, Education, Health & Social Work, Community, Social & Personal Services15.312.8
Public administration, education, health & social work, community, social & personal services--
Social services--
Transport, storage and communication11.610.2
Transportation, communication & information--
Wholesale and retail trade, hotels and restaurants4.83.7
Wholesale, retail trade and real estate ownership--

Despite the decline in iron production, the country’s main export, as a result of the slowdown in international demand, the Mauritanian economy showed some resilience with a positive growth rate for the third consecutive year; of the order of 6% in 2012 against an initial projection of 4.7%. This performance is due to the recovery of agricultural production following good rainfall, and the dynamism of the construction sector, supported by large public investment and investment by mining companies.

The economic crisis that has shaken European economies has reduced exports of iron sharply. These declined in value by 7.5% in 2012 compared with growth of 47.5% in 2011. The recession has also affected other mineral exports, especially copper (-28.2%) and gold (-9.73%), wiping out the significant recovery in exports of crude oil (29.7%). The agricultural sector recorded growth of 39.6% in 2012 following a decline of 24.3% in 2011 (at constant prices, base 1980) which caused an acute food crisis. The sector benefited from good rainfall and accompanying government measures, such as the distribution of improved seeds and an anti-locust programme co-ordinated with Senegal.

The construction sector, another engine of growth in 2012, has meanwhile maintained its momentum since 2010, with a growth rate of 23.3% in 2012 following rates of 17.6% in 2011 and 10.8% in 2010, (at constant prices, base 1980). This result is supported by an extensive programme of public investment, focused on large projects to improve internal and external access, but also by significant investment in the mining sector.

The good performance of the Mauritanian economy is expected to continue in 2013, with a projected growth rate of 6.4% driven by a recovery in the mining sector, especially gold, and good performance in the construction sector. The mining sector’s prospects in 2013 should be assured by the recovery of international demand, the start of production from the Guelbs II project by the national industrial and mining company to increase iron production, and the gradual exploitation of new copper deposits. Construction should remain dynamic, with an increase of nearly 30.0% in the state's capital expenditure and a projected rate of growth in volume of 17.2% in 2013.

In the fisheries sector, the desire to implement the terms of international agreements more fully has resulted in the recent revocation of license agreements with Chinese companies and major difficulties renewing the fisheries agreement with the European Union (EU). As a result, the projected growth in volume in 2013 is only 5.0% compared with 14.8% in 2012.

All other sectors of the economy should record steady growth, with the exception of retail, catering and hospitality, badly affected by the fall in tourist numbers due to insecurity in the country and the Sahel in general. The crisis in Mali and the French and African military interventions there give the whole region the image of a high-risk area for foreign tourists, especially Westerners.

The main challenge up to 2015 is therefore to ensure inclusive and sustainable growth. Development of the private sector, and in particular small and medium enterprises, to diversify the economy and contribute to job creation, is a central concern. Participation of civil society and local communities, sustainable management of natural resources (mining and fishing) are also central to Mauritania’s stable medium and long-term development.

Macroeconomic Policy

Fiscal Policy

The 2013 budget aims to achieve fiscal discipline by reducing public spending to 28.6% of GDP, compared with 31.6% in 2012. Current expenditure is expected to fall to 20.3% of GDP in 2013 compared to 22.5% in 2012. The Finance Act also predicts a level of capital expenditure of 7.9% of GDP compared with 8.7% in 2012. Expenditure will be financed mainly by domestic resources.

The fiscal situation in Mauritania is considered sustainable because of the good performance of the extractive industries, i.e. mining and fisheries, and to a lesser extent construction, as well as efforts to strengthen tax collection and public expenditure management.

To broaden the tax base, management systems have been modernised through: better identification and registration of taxpayers in major urban areas; computerisation of procedures (Automated SYstem for CUstoms DAta – ASYCUDA++ software); and improved communication between the customs and taxes services. Tax revenues increased from 14.4% of non-oil GDP in 2008 to 17.6% in 2012. These performances will be consolidated in 2013. The slight decrease tax income in 2013, which is expected to be 16.6%, is due to the strong contribution to growth of the agricultural sector, which does not contribute to tax revenues.

Moreover, income tax reform in 2013 should increase the tax rate of the richest to 30% (compared with 40% for neighboring countries) and decrease that of the poorest to 2.5%, and so have an almost neutral result on the total amount collected.

In addition, the government has established a system of graduated royalties in the mining sector and is considering whether to renegotiate the tax rate for extractive companies.

Management of public spending remains under control even though the use of credit is common. Commitments are in line with available revenue, current expenditure is close to that planned and budgeted, and there is no accumulation of arrears.

The Ministry of Finance is preparing a framework for overall medium-term expenditure. Modernising management and the introduction of software will allow monitoring and control of disbursements and achievements. Financial control continues to be strengthened both through existing regulatory institutions (such as the Court of Auditors and General Inspectorate of Finance) and the capacity of civil society.

The reduction in spending is based on several factors. Firstly, the payroll was stabilised at 8.2% of GDP in 2012, following the creation of a database of state officials and public companies. An audit of the five largest state-owned enterprises is also underway. Subsidies for basic commodities, energy and oil also declined following the introduction in 2012 of a new mechanism for pricing oil, taking into account changes in world prices. Finally, the government’s national solidarity programme, Emel, was designed to offset rises in the cost of basic foods and contain the food crisis. This plan to help the poorest has been strengthened by a census to help identify and target the poor, and the phasing out of charity shops in favour of cash transfers to targeted populations will eventually lead to the creation of an integrated social security system.

The fiscal deficit increased from 1.5% of GDP in 2011 to 3.6% in 2012, due to Emel programme expenditure. The major budget management challenges remain dependence on the extractive industries, the non-use of programme budgets and sectoral allocations, the frequency and reliability of financial reporting and clearing domestic arrears.

In 2013, budgetary and fiscal policy aimed to reduce economic dependence on mining. To this end, regular meetings were set up between the finance and other ministries to promote sectoral budgetary strategies. The revenue target for 2013 has been set at 16.6% of non-oil GDP. The primary balance is projected at -0.2% of GDP and the overall balance at -1.9% of GDP.

Table 3: Public Finances (percentage of GDP)

 200920102011201220132014
Total revenue and grants25.325.927.427.926.727.9
Tax revenue15.215.617.517.616.617.3
Oil revenue------
Grants0.61.10.71.10.81.3
Total expenditure and net lending (a)30.727.728.931.628.631.5
Current expenditure23.92020.922.520.321.7
Excluding interest21.518.119.42118.520.7
Wages and salaries9.78.27.58.26.97.6
Interest2.41.91.61.51.70.9
Primary balance-30.10.1-2.2-0.2-2.7
Overall balance-5.4-1.8-1.5-3.6-1.9-3.6

Monetary Policy

The state's reduced need for funding has resulted in a drop in interest rates on treasury bills, which are below 3.0%, and greater availability of resources to finance the rest of the economy. Credit to the economy was controlled at 10.2% year on year. In 2013, it is expected to grow by 14.7%. The BCM has a financial instrument, "seven day treasury bills", allowing it to control inflationary pressures by removing excess liquidity. Although banks' free reserves are high, private-sector credit is not showing excessive growth and so inflation has been kept to 6.0%.

According to the BCM, international reserves in 2012 reached a record level of USD 750 million, or 5.3 months of imports, compared with 3.6 months in 2011. This trend should continue in 2013 to reach 6.6 months of imports.

The exchange rate depreciated by 4% against the US dollar, but remained stable in nominal effective terms. In addition, the parallel market premium with the dollar and the euro remains weak, which indicates that there is no fundamental imbalance in the official market.

Economic Cooperation, Regional Integration & Trade

Mauritania is a member of the Arab Maghreb Union (AMU), and is making efforts to converge with the countries of the Economic Community of West African States, of which it is not currently a member. The country has also signed bilateral trade agreements with countries in these two regions: Algeria, Egypt, Gambia, Morocco, Senegal, Mali and Tunisia.

However, Mauritania’s share of regional trade remains very low and China is its biggest customer. In addition, Mauritania is a signatory to the Cotonou Agreement governing trade relations between the European Union (EU) and the African, Caribbean and Pacific countries, its products thus benefiting from preferential treatment on the European market.

Mauritania should also benefit from the creation by the AMU in January 2013 of the Maghreb Bank for Investment and Trade (Banque maghrébine des investissements et du commerce, BMICE). The bank’s capital is USD 100 million, for financing infrastructure projects in AMU countries, and it should stimulate investment and regional integration.

The Mauritanian foreign-trade regime is based on a pricing system similar to that of the Economic and Monetary Union of West Africa, but it maintains high tariffs without special rates, which are above World Trade Organization rates on 11% of tariff lines. Customs duties on imports of agricultural products have also been raised. The scale and complexity of bureaucracy inhibits free trade, through a lack of information, long waiting times, and the multiplicity of documents required for special permits, granted with difficulty, for some barely-profitable products. The World Bank report Doing Business places Mauritania 143rd out of 183 countries for the cross-border trade indicator.

The positive trade surplus in 2011 (USD 274.9 million or 6.6% of GDP) was due to a sharp increase in both the volume and value of exports. In 2012, the trade balance fell by 7.9% due to the increase in imports generated by the Emel programme and infrastructure-related projects. These include the construction of a new airport and the development of energy production capacity (gas, solar and thermal). In 2013, the trade deficit should improve to -0.2% of GDP. The current account balance also deteriorated to -18.5% of GDP in 2012 compared to -7.3% in 2011.

These changes are explained by the sharp decline in foreign direct investment (FDI), due to the slowdown in mining exports. Other factors include the late payment of fishing licenses by the EU, imports related to the Emel programme and investment projects. In 2013, the current account deficit is expected to be 21.1% of GDP.

Table 4: Current Account (percentage of GDP)

 2004200920102011201220132014
Trade balance-32.4-3.63.86.6-7.9-0.2-19.1
Exports of goods (f.o.b.)29.445.256.365.760.763.356.5
Imports of goods (f.o.b.)61.848.852.659.268.663.575.6
Services-13.9-13.1-14.9-12.6-10.7-15.1-0.2
Factor income4.41.7-1.9-4.2-4.1-7.4-1.1
Current transfers7.34.34.42.94.21.61.7
Current account balance-34.6-10.7-8.7-7.3-18.5-21.1-18.8

Debt Policy

In 2012, the ratio of debt contracted and guaranteed by the state is about 62.1% of GDP, and domestic debt, consisting mainly of treasury bills, is estimated at USD 183.1 million.

The analysis of debt sustainability conducted with the assistance of the World Bank in 2011 and the good performance of mining and fisheries indicate a moderate debt risk. In this context, the government's priority is to pursue a prudent debt policy focused on concessional financing.

This policy is based on the 2012 medium-term external debt strategy and on the national committee on debt management, which works in partnership with the BCM and the Ministries of Finance and Economic Affairs. It implements programmes for capacity-building, performance assessment and medium-term management. The measure prohibiting public enterprises borrowing from commercial banks has put an end to irresponsible lending behaviour, based on state guarantee.

With a view to lowering debt, the government is continuing bilateral negotiations. Discussions with the Government of Kuwait are underway to find an appropriate arrangement for its passive debt under the terms the Heavily Indebted Poor Countries (HIPC) Initiative. To facilitate negotiations, the debt has been transferred from the BCM to the Ministry of Finance in exchange for debts owed by the Department.

Finally, the commitment to avoid any new accumulation of domestic arrears was met in 2012. At the end of March that year, a report on the litigation files of the state was produced, with a plan to clear domestic arrears over the period 2012-14.

Figure 2: Stock of total external debt and debt service 2013

Economic & Political Governance

Private Sector

The World Bank report Doing Business 2012 places Mauritania 159th; far behind neighbouring countries. The business climate is hampered by numerous lengthy and costly procedures, but also by the high minimum capital required to start a business (the highest in the region), and employment law is very rigid. These are all factors that encourage the informal sector: which constitutes more than 97.6% of the primary sector, 17.1% of the secondary sector and 35.0% of the tertiary sector.

However, the country is improving; it was ranked 162nd in Doing Business 2011. Efforts are being made to remove barriers to private-sector initiative: reform of investment and mining regulations and the implementation of new public procurement regulations in 2012. A one-stop shop, operational since late 2012, is helping to ease the process of obtaining building permits and land titles.

The consolidation of public finances, which resulted in the non-accumulation and gradual clearing of state arrears, is also likely to stimulate the private sector. Finally, in 2012 Mauritania established a directorate-general for private-sector promotion with the Ministry of Economic Affairs and Development.

The business environment is very sensitive to economic and political governance, and the levels of corruption and lack of transparency of institutions are weaknesses. Implementation of laws and regulations is sometimes problematic. Nonetheless the country rose twenty places in 2012, from 143rd to 123rd, in Transparency International’s ranking of the least corrupt countries.

Steps have been taken to increase the public sector's role in the economy. These include the creation of public transport and housing companies, the creation of a public bank and the expansion of energy production. The authorities also committed to a process of opening up to the private sector in late 2012, including the preparation of a draft law on public-private partnership.

Financial Sector

The proportion of people with a bank account in Mauritania is about 4%. The banking system is underdeveloped, related in part to the international financial system and characterised by a high level of nonperforming loans (NPLs). The sector is not very competitive, despite the presence of four foreign banks. In addition, the banks' portfolio is highly concentrated, with twenty customers accounting for 80% of deposits. Finally, the absence of markets for refinancing requires banks to offer only short-term loans backed by deposits. To meet customer needs for medium- and long-term loans they have recourse to credit from international institutions.

Mauritanian banks have substantial liquidity buffers and are well capitalised. The main concern is poor asset quality, although the risks are mitigated by significant provisions, especially for legacy loans which represent the majority of doubtful debts. International audits project outstanding NPLs to be 44% of gross loans.

The government has recently developed a comprehensive strategy to reform the financial system and deepen banking intermediation. It aims to consolidate banking sector stability, to strengthen banking supervision by the imposition of higher standards of equity, and to revise the regulatory framework.

The BCM is also involved in these developments; it is responsible for enforcing the capital requirements of the Basel 1 accord and it fixed the minimum level of capital for banks at USD 18 million at the end of 2012. Steps have also been taken to improve the reliability of statistics produced by public and private sector credit agencies, and to improve information on access to financial services. Compliance by commercial banks with International Financial Reporting Standards is also under consideration. Finally, the BCM is improving its transparency by conducting international audits.

Public Sector Management, Institutions & Reform

The administration’s staffing structure makes it difficult to ensure the implementation of government policy or the effective delivery of public services. Indeed, many of the staff bypassed the legal recruitment and promotion procedures. The administration is characterised by bureaucratic complexity and slowness.

The government is also making efforts to improve the situation. In the third action plan 2011-15 of the Strategic Framework for the Fight against Poverty, it made the modernisation of public administration one of its priorities. A major programme of computerisation, automated data management and staff capacity-building has been in place since 2008, as well as improved public access to information.

Civil service salaries were raised by 34% in 2006 and 2007 in order to curb corruption. Since 2011, priority has been given to the consolidation of civil service staff files, statutory review, and the reallocation of resources across sectors. Faced with soaring prices of essential foods, an across-the-board increase in civil service and similar bodies’ salaries was made on 1 January 2013, ranging from 10% to 40%.

The government has adopted a new strategy of zero tolerance in the fight against corruption, and has developed a national strategy including steps to strengthen the judicial system. The arrest of ministers, the requirement for top officials to declare personal property and inspections of the use of state resources by civil servants are dealt with publicly and reported to the judiciary. Moreover, due to the importance of mining and fisheries in the national economy, the rights and licenses granted to foreign operators are the subject of regular parliamentary debates broadcast live on national television. In February 2012, the country was declared compliant by the Extractive Industry Transparency Initiative.

Although protected by a strong legal basis, the implementation of economic rights – including property, intellectual property and contracts – regularly faces persistent, opposing socio-cultural practices as well as corruption. Gender discrimination persists, for example when obtaining property rights, and the legal system does not provide effective protection for investors.

To encourage the involvement of local communities, a policy of decentralisation and rural development was adopted by the government in 2010. Decentralisation is being reformed at village level, a draft law on local government has been developed and funding for regional development has increased, with the goal of increasing the transfer of powers to local government.

Natural Resource Management & Environment

A desert country, Mauritania has only 4.0% forest land cover and is facing recurring droughts. According to the latest report of the United Nations Development Programme (UNDP), the 252 000 hectares of forest identified in 2010 has decreased by 39.3%.

The scale of mining and fisheries constitutes a threat to the environment if steps are not taken. In 2008, the cost of environmental degradation was valued at about 17% of GDP or USD 295 million. Ecosystem degradation has harmed rural populations, and biodiversity loss has greatly affected their income-generating activities. The country has always been characterised by weak environmental governance: Mauritania was ranked 161st out of 163 countries listed in the Environmental Performance Index 2010.

Mauritania has ratified most of the conventions relating to the environment and actively participates in international meetings on environmental issues. It is also involved in the regional project on climate change and its human dimensions in West Africa (ACCC). The country has numerous initiatives to safeguard its ecosystems after creating a Ministry for the Environment that reports directly to the Prime Minister, which now requires specific provisions for environmental conservation from each mining and fisheries operator.

In February 2012, Mauritania joined the regional project: capacity building for conservation and sustainable management of wildlife and protected areas in the Middle East. With funding of USD 450 000, the project helps support the national action plan for the environment for the five years 2012-16. As part of this plan, the government began building a green belt around the capital, Nouakchott, with the involvement of the armed forces and civil society organisations. Steps have also been taken to promote the stabilisation of sand dunes and develop serviced environmental areas.

To conserve fishery stocks, the government imposes regularly-inspected, annual, biological rest periods on foreign ships. As mining has grown, the government has strengthened the mines police.

The recent discovery of large gas fields suggests good prospects for electricity production and the expansion of domestic gas use, which will save scarce forest resources. Wood currently provides 80% of household energy. The government has created an electricity and gas production company with an initial capacity of 120 megawatts, which will enable Mauritania to export energy to neighboring Mali and Senegal.

Political Context

After a period of instability following the coup of 2008, the country returned to constitutional government supported by the Dakar agreements of 2009 and the presidential election that followed. At the end of 2011, the establishment and institutionalisation of political dialogue between the government and the opposition led to the adoption of many constitutional reforms: the distribution of powers, strengthening the independence of the judiciary, the promotion of women in political office, and good governance.

However, the absence of dates for local elections has revived tensions between the government and the opposition and weakened co-operation with institutions inherited from the previous regime (the Assembly and Senate).

Completion of the biometric population census currently underway will provide the country with a reliable electoral register, with a view to holding legislative and presidential elections in 2013 and 2014. However, registrations have sparked violence in Negro-Mauritanian majority areas to denounce its "discriminatory character".

Finally, the Islamist threat linked to Al-Qaeda in the Islamic Maghreb is felt even in the capital. The crisis in the north of Mali and the influx of refugees may have a negative impact on the country.

Social Context & Human Development

Building Human Resources

Mauritania’s Human Development Index stood at 0.453 in 2011 (below the average for sub-Saharan Africa of 0.463), compared with 0.447 in 2009. According to the latest UNDP report, spending on health and education is 1.6% and 2.9% of GDP respectively.

The health situation remains very precarious. Medical coverage, service quality and efficiency of spending all remain weak, while the food situation is worrying. According to the latest figures from World Bank’s African Development Indicators, infant mortality stood at 77.8 per thousand. The Poverty Reduction Strategy Paper’s third action plan (PRSP III) predicts a rate of 40 per thousand in 2015. Universal access to healthcare was less than 9% in 2011, while PRSP III predicts a rate of 100% by 2015. Lastly, the maternal mortality rate is 550 deaths per one hundred thousand births (compared with a PRSP III prediction of 300 by 2015).

Geographical and social disparities are very marked. The proportion of births attended by medical personnel reached 90% in urban areas in 2011 compared with only 30% in rural areas. This rate is 95% for the richest 20% while it is only 21% for the poorest 20%. A recent UNDP report indicates that the incidence of major diseases such as HIV/AIDS, tuberculosis and malaria is no longer increasing, thanks to the government’s efforts with the support of development partners. The HIV/AIDS infection rate was only 0.68% in 2011, in line with the PRSP III objective. It should be noted that pneumonia and diarrhea are the two biggest causes of death in children under five.

Progress has been made in providing access to water and sanitation related to the improvement of health conditions. The report on the Millennium Development Goals (MDGs) estimates that the percentage of the population with access to water has increased and will achieve the goal of 74% by 2015, as projected in PRSP III.

Progress has been made towards the education MDGs for early childhood development (formal and informal), education and literacy, without, however, achieving all the objectives set. According to the latest UNDP report, universal access to basic education will be achieved by 2015: the gross enrollment rate for 2011 in primary education is 95% and the net rate 73%, compared with 49% in 1990. Female/male parity was reached in 2000-01, from a ratio of 0.72 in 1990. Parity in women’s literacy (15 to 24) seems likely to be achieved by 2015. However, the level of net enrollment rates, retention rates and the quality of education must also considered. The retention rate in 2011 stood at 49.3%; in other words, more than half of children left school before their final year. The average length of schooling is 8 years and 11 months, compared with the target of 9 years set in PRSP III.

Poverty Reduction, Social Protection & Labour

Not less than 21.2% of the population lives below the poverty line (USD 1.25 per day in equivalent purchasing power). In 2008, the unemployment rate was 30.2%. Poverty in rural areas is at 60.0% compared with a projection of 35.0% in PRSP III. According to an International Monetary Fund (IMF) report, poverty in Mauritania remains a rural phenomenon, with some improvement in the urban areas of Nouakchott and Zouerate Akjoujt.

Government efforts since 2009 focus on strengthening social safety nets, on grant schemes and on targeted social protection, in co-ordination with development partners. In 2011, the government undertook free distribution of grain and "food for work." It also launched the ambitious Emel program in 2012, to cope with the consequences of the food crisis. At a cost of USD 80 million, the programme has helped more than 1 million people benefit from subsidies in food prices through charity shops. These shops are due to be removed in 2013, with a move instead towards cash-transfer programmes better targeted at vulnerable populations, and based on extending poverty research across the whole country.

In addition, an extensive programme of local development in poor areas has been started. It includes both development and access projects. The government also intends to take advantage of the boom in mining to develop second-tier cities, ensuring the provision of essential services such as health, education, drinking water and electricity. This policy has the support of mine operators because it involves local populations around the mines.

In terms of social security, pension and retirement schemes cover both government workers and formal private sector employees.

An agreement reached in 2011 between representatives of government, employers and unions has helped raise the minimum wage from USD 73 to USD 104 per month, an increase of 43%. Meanwhile, MPs adopted a bill extending health insurance to more beneficiaries. In 2012, a social protection strategy was developed in collaboration with the United Nations Fund for Children (UNICEF) to strengthen the social security system and to better target and protect the poor and vulnerable.

In January 2013, MPs insisted that priority be given to projects that mitigate the social impact of poverty and ensure the full support of the poor and needy.

Mauritania has ratified all the conventions on human rights at work: freedom of association and the right to collective bargaining, abolition of forced or compulsory labour, non-discrimination in respect of employment and profession, and the principle of equality of opportunity and conditions, as well as the elimination of child labour.

Gender Equality

The gender parity index developed by UNDP is 0.718 for Mauritania. In the field of education, female/male parity was reached in the 2000s. The female/male ratio was 1.02 in primary education, and parity in literacy for 15 to 24 year olds should be reached by 2015.

The picture in terms of employment is more mixed. Efforts to promote women have achieved progress, highlighted by the 2008 Survey on Household Living Conditions. Mauritanian women are less affected by poverty than men (19.6% compared with 21.0% in urban areas and 54.3% compared with 61.6% in rural areas). However, they suffer discrimination in access to employment and land ownership, resulting in low levels of participation in formal economic activity. The ratio of female to male participation in the labour force in 2008 was 0.728 and the unemployment rate for women is 47.3% compared with 25.2% for men. Despite laws to promote women economically, the persistence of socio-cultural discrimination is slowing their implementation.

The results are more encouraging in terms of political participation. Mauritanian women are active in political life, stand in all elections and are increasingly involved in decision making. Women made up 20% of the government in 2011 and, since 2009, have a 23% share of parliamentary seats and 16% of seats in the Senate, compared with 3% and 5% respectively in 2003. In 2009, 30% of local councillors were women, including four elected mayors.

In October 2011, the government passed a law granting the right to transfer pensions to surviving spouses and children. Having come into effect in 2012, it removes an element of discrimination against widows and aims to harmonise the law with the constitution and international charters.

In order to achieve its 2008 action plan for the advancement of women, the government began to draft a bill in 2012 focused on violence against women. The consultation process that accompanied this exercise resulted in the development of strong recommendations such as better access to justice for women victims of violence, as well as the integration of legal projects from different organisations working in the field of violence against women, to ensure their success. The action plan focuses on the two areas of discrimination against women and gender-based violence.

Thematic analysis: Structural transformation and natural resources

The Mauritanian economy depends heavily on the exploitation of natural resources, mining and fishing; which between them provide nearly 90% of tax revenue. Between 1961 and 2011, agriculture’s share of GDP declined by 27%, while industry saw its share increase by nearly 18% and services’ share grew by about 9%.

From 1976 to 1995, a period of slow growth in Mauritania, the primary sector grew in importance at the expense of the secondary sector. Then, in the mid-1990s, the secondary sector gave a boost to overall growth. Non-manufacturing activities gained a share of the country's economy between 1996 and 2012.

Growth since 2008 has relied on the secondary sector to the extent of 28.2% of GDP on average (including 15.5% from natural resources exploited by the mining industry compared with only 7.1% from manufacturing and 6.5% from construction). The tertiary sector contributed an average of 38.0% of GDP (including 10.2% from transportation and telecommunications, 7.6% from trade, restaurants and hotels, and 10.9% from other market services). The analysis of the most dynamic sectors, in terms of share of value added in gross output, reflects the rise in the relative importance of the service sector, with trading and other services being more dynamic than transportation and telecommunications.

The dynamism of mining was accompanied by growth in construction. In contrast, there was a relative decline in the contribution of manufacturing activities. In the primary sector, the slight contraction of fishing, aquaculture and fish farming was accompanied by a sharp decline in livestock, agriculture and other related services. Despite the good economic performance, there is low per capita income and high unemployment; a situation that can be partly explained by the size of the population living in rural areas. This underproductive population is unable to benefit from the growth; it is extremely vulnerable to recurrent natural hazards such as floods, drought, and locusts.

This observation justifies a closer look at the country’s employment-generating activities. The most dynamic sectors are construction, fishing and trade, which all have high employment flexibility. Manufacturing industry was also effective, with employment creation achieved at the same rate as the increase in value. In contrast, the banking and insurance sectors, farming, transport and telecommunications have created relatively few jobs compared to their increase in value. Agriculture (a major employment provider) lost proportionately more jobs than the relative decline in its contribution to GDP.

Manufacturing industry has performed relatively well, losing fewer jobs than would be expected from the fall in its added value during the period.

Among its natural resources, Mauritania has huge fishery reserves, with more than 700 km of coastline on the Atlantic Ocean. Mining, including iron, has always been one of the engines of growth. Fishery products and iron ore have in recent decades represented more than 90% of the total value of Mauritania’s exports. In the mid 1990s, fishery products accounted for 56% of total exports, and iron ore 39%. Ten years later, the balance had changed; the share of iron ore increased to 64% and that of fisheries products fell dramatically.

More recently, large deposits of gold, copper and phosphate have been discovered, leading to an unprecedented expansion of FDI. Projects have been set up by the Spanish Mauritanian Minerals Company, (10% owned by the Mauritanian government), to mine quartz in the Dhaklet and Inchiri regions. The Indian company Bofal is investing in phosphate in Gorgol and Brakna. And Kinross-Tasiast plans to invest USD 3.7 billion over the period 2012-14 in the gold sector. Following the discovery of large reserves of natural gas in the Banda area, the country has created a company producing electricity from gas, which aims to export electricity to Senegal and Mali.

In view of the strong economic growth since the return to political and institutional stability, indications are that mining and fishing will remain the engines of growth, with a strong trickle-down effect for other sectors of the economy, including construction, tourism and hospitality, as well as banking and insurance.

Unfortunately, this growth is not accompanied by the significant job creation needed to reduce youth unemployment, the scourge of Mauritania. Indeed, by limiting itself to the export of raw materials instead of processed products, the country generates little added value to its immense riches. The country is failing to develop the small- and medium-sized industries related to the processing industry. Such a policy would strengthen the industrial sector nationally and create local employment opportunities.

However, the low skill level of the local workforce is a real concern for mining operators and public authorities. For Mauritania to get the maximum benefit from its natural resources, beyond its contribution to tax revenue, the country urgently needs to adopt an effective policy of technical and vocational training. This should include proactive measures to support businesses that unemployed young people are culturally reluctant to enter. The social anthropology of the different communities living in Mauritania is based on a stratification of social classes which determines the distribution of tasks, reserving the exercise of manual trades (masonry, carpentry and plumbing) to the disadvantaged and "slaves". This popular perception discourages young Mauritanians, whether Moors or black Mauritanians from seeing training in a trade as their springboard to the future.

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