Mauritania Economic Outlook
- Mauritania’s economy grew an estimated 3.1% in 2015, down from 6.6% in 2014, primarily because of the drop in the price of iron ore, the country’s main export.
- The economic outlook remains promising in the short term, due particularly to new mining development at the Guelb II deposit, the recovery of manufacturing activity and the intensification of structural reforms.
- Transformation of Mauritanian cities into engines of growth is slow because of unplanned and unmanaged urbanisation, which has had a negative impact on local development.
The ongoing drop in world iron prices has derailed the Mauritanian economy from its high-growth track. Its gross domestic product (GDP) grew at an estimated 3.1% in 2015, down from 6.6% in 2014. In 2015, there was a significant drop in the mining industry’s share of GDP to 7.4%, from 12.8% in 2014. The slowdown in growth is also due to a decline in gross investment. The economic outlook remains promising in the short term, however, due particularly to the new mining development of the Guelb II deposit, the recovery of manufacturing activity and the intensification of structural reforms.
The country’s macroeconomic achievements were sustained in 2015. Inflation (3.5% in 2014) was contained at 1.5%, thanks in particular to a fall in international food prices. The fiscal stance remains viable, with a manageable overall balance deficit equal to 2.9% of GDP (3.7% in 2014). By the end of 2015, official foreign-exchange reserves had remained comfortable at an estimated US dollar (USD) 809 million, or 6.8% of non-extractive imports (5.5 months of imports), against USD 639.1 million in 2014, or 4.7 months of imports. The tertiary sector’s share of GDP continued growing to reach 44.8%, its highest ever. The current account deficit maintained its gradual recovery, expected to continue until 2017, falling to 22.2% of GDP in 2015 from 30% in 2014.
The encouraging results of the 2014 survey on household living conditions (EPCVM) published in 2015 show significant progress in poverty reduction, falling to 31% from 42% in 2008. In the 2015 United Nations Development Programme (UNDP) Human Development Index (HDI) rankings Mauritania was placed 156th with a score of 0.506, 5 places higher than in 2014. While other social indicators have improved, the country’s social performance remains mixed, and Mauritania is still categorised as a low HDI country. The first Millennium Development Goal (MDG), which was to reduce the poverty rate to 28% by the end of 2015, was not reached. Despite the relatively low unemployment rate (12.8% in 2014), the labour market remains highly precarious and informal, with a vulnerable-employment rate of 54.62%.
Significant among the country’s major development challenges are: managing urbanisation, as strong urban-population growth has brought the urban share of the total population to 48.3%; the persistence of districts with precarious housing; improving land management; better application of taxation; and reducing vulnerability to climate change. In this context, a well-structured and clearly-focused urbanisation process is essential to local development.