Mauritania’s mitigated prospects
Paris - Despite relatively favourable economic indicators since 2011, Coface, the French insurance company for foreign trade, and the World Bank are cautious on Mauritania.
Both institutions, whose experts have been closely following socio-economic and political developments in this Maghrebi country, say Mauritania’s chances of achieving Millennium Development Goals (MDGs) by the end of 2015 are very low.
Nevertheless, there are signs of progress, especially in education, as well as an economic growth rate of around 6.8% in 2014, which should be sustained through 2015.
Inflation has declined since 2010 and is expected to be less than 5% in 2015 due to decreases in food prices. This is highly significant in a country where the rate of poverty is around 42% (well above the 25% target for 2015) and where 53% of the workforce is classified as being in “precarious employment”.
Mauritania faces serious structural challenges, including a lack of oil and gas resources and meagre revenue from tourism. It does not benefit from the greater diversity of exports enjoyed by its peers in the Arab Maghreb Union (AMU).
The latest World Bank report welcomed the recent balance achieved in the composition of public expenditure as well as the increase in spending in key infrastructure projects. The bank also focused on Mauritania’s renewable resources, which account for around two-thirds of natural resources and could, if appropriately managed, ensure constant income and help improve standards of living for generations to come.
In addition to Mauritania’s positive growth rate, many sectors seem to be doing relatively well. The favourable outlook rests on a number of optimistic assumptions including recent discoveries of iron ore deposits, good weather conditions and the positive effects of the 2013 agreement with the European Union in the fisheries sector.
The construction and public works industries continue to be the drivers of growth with an expansion of more than 16% in 2015.
In this favourable environment, Coface recently highlighted the country’s strengths. Its main conclusions focused on donors’ and international organisations’ support, mineral and fish resources and the energy outlook (oil, gas, renewable energy). Meanwhile, public debt ratios have declined from 94,2% in 2012 to 68,1% in 2014 and foreign debt dropped from 87.2% of gross domestic product (GDP) in 2012 to 57% at the end of 2014.
Despite the progress, Mauritania faces several challenges in the long and medium term. The private sector remains the main cause for concern, especially small and medium enterprises.
The persistent threat of socio-political unrest also remains a challenge, despite elections in June 2014 keeping Mohamed Ould Abdel Aziz in power for five years. Aziz won 82% of the vote in an election that main opposition forces boycotted, allowing the government to acquire legitimacy after its coup in 2008.
Weak border control and the flow of refugees complicate the situation of a poorly diversified economy that is too centred on raw materials (iron, copper, gold, quartz, phosphates, farming and fish).
If Aziz succeeds in scoring points in the field of governance, especially in fighting corruption and terrorism, combined with rigorous management of public spending and salary increases, he should succeed to strike a balance between two powerful and demanding neighbours, Algeria and Morocco; not an easy exercise.