Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
Mauritania is principally a Saharan country – 75 percent desert. At nearly 400,000 square miles, Mauritania is slightly larger than Texas and New Mexico combined. The southern strip of Mauritania, along the Senegal River and toward the border with Mali in the east, is part of the Sahel, the semi-arid belt south of the Sahara. Culturally, Mauritania straddles two distinct regions: the Sahel countries that form the northern edge of western Sub-Saharan Africa, and the Maghreb countries of North Africa. A little more than half of Mauritania’s 4.4 million population lives in urban areas, principally the capital city of Nouakchott and the northern trade-hub of Nouadhibou. With a density of four inhabitants per square kilometer, Mauritania is one of the least densely populated countries in the world.
Mauritania has long been associated with a tradition of North-South trade and is favorable to free markets, personal mobility, and entrepreneurship. The country is seeking to overcome a history of poverty while also rekindling its relationship with the Economic Community of West African States (ECOWAS) and playing a more active role within the African Union.
Mauritania offers a small but steadily growing market to investors. With a population of 4.4 million and an average per capita GDP of US $1,672, growth has fluctuated over the years, largely due to the economy’s dependence on commodity prices. The COVID-19 pandemic severely impacted Mauritania’s previously bright economic outlook, leading to a contraction of 4 percent in 2020, according to the World Bank. The country’s budget deficit in 2021 grew to 4.1 percent because of a significant drop in tax revenues, decline in export revenues, and an increase in health spending to combat COVID-19 infections. Fueled by higher commodity exports – iron ore and gold – and relaxed COVID-19 mitigation requirements, the economy grew by about 2 percent in 2021. The annual average inflation increased to 6 percent in December 2021, driven by rising prices of essential products and increased food insecurity, which was worsened by Russia’s invasion of Ukraine.
According to the World Bank, the medium-term outlook of Mauritania is broadly favorable. Growth is projected to grow by 4.5 percent in 2022. Because the government reached its target to vaccinate 62 percent of the population by mid-2022, the spread of COVID-19 has slowed significantly. The government continues to ramp up its support of social programs and investment spending to support a resilient recovery.
Mauritania’s hydrocarbon sector continues to show promise. After U.S. company Kosmos Energy found a large deposit of natural gas off the coast of Mauritania and Senegal in 2014, several supermajor oil & gas firms arrived in Mauritania to start their own explorations. Kosmos’ discovery – now owned mostly by BP – is set to begin production of gas in 2023, and it is projected to nearly double the government’s revenue.
Since 2012, the average number of foreign tourists (mostly Europeans) visiting Mauritania hovered around 1500 people. The Mauritanian government sought to capitalize on this and had plans to bolster the tourism sector, but COVID-19 brought the sector to a halt. From November 2021 to April 2022, 1,247 tourists visited Mauritania. The industry, which hits its seasonal peak in March, is dominated by small business owners with little access to reserve credit. The sector is a source of foreign currency for the informal economy.