International Trade in Mauritania

News Related to International Trade in Mauritania

Business outline for Mauritania

Main Industry Sectors

Mauritania has been a market economy only since the last decade. It is currently going through a deep transformation. The country possesses iron mines and maritime coasts which count among the richest in fish in the world. The country's production is dominated by iron ore and industrial fishing. Livestock cattle farming is the traditional Mauritanian sector practiced by the nomads and it also represents an important field of activity. 
The country also counts with significant mining and oil resources, which constitute an emerging market in full development.

Economic Overview

The recent discovery of offshore oil fields and their exploitation, which began in February 2006, has deeply modified the profile and the economic dynamics of the country. The GDP's growth rate, which since 2000 had  a tendency to run out of steam, oscillating between 2 and 5%, experienced an exceptional growth in 2006.  As a consequence, the GDP per capita almost doubled between 2004 and 2006.  However, the growth rate dropped again in 2008 and the country entered into recession in 2009.  As a fact, the decrease of foreign demand along with a national political crisis, had a negative impact in the country's economy and made it more vulnerable to foreign economic shocks.  Also, the global economic crisis has deeply affected Mauritania's mining exports as well as the tourism sector.

The new government had already a heavy political agenda (consolidation of democracy, stabilization of public spending, debt reduction, stabilization of inflation) and to this list, the need of using the income expected from oil production in the best possible way, had to be added. The government will need to modernize the country, to support education and industrial diversification in order to limit its economic dependence on the fluctuation of the price of oil barrels.

Mauritania obtained encouraging results in 2010 and expects a growth of  about 5% in 2011, counting on the high price of mining products (iron and copper) and the economic revival of its main clients and trade partners.

FDI in Figures

Mauritania remains relatively on the margin of investments in a global plan and, in a long term, a good political stability could contribute to improve its attractiveness. The inflow of foreign investment in Mauritania has not been constant in the last four years. Thus, although in 2005 the country saw a record investment inflow of USD 814 million, the following year 2006,  this figure  fell to USD 155 million and then to USD 153 million in 2007. This decreasing trend has continued in 2009 and 2010 due to the global economic crisis and the political instability of the country. 
The majority of the investments have been involved in the sectors of oil exploration and exploitation, mineral mining of iron ore and gold, telecommunications with the acquisition of mobile phone licenses, and the construction sector.

FDI Government Measures

The government has set up a system of a single office in order to facilitate the administrative work of foreign investors. It deals with the submission of files in order to obtain permits, administrative procedures, establishment of businesses and issuing work permits for foreign workforce. The government has revised the Investment Code in order to make Mauritania more attractive. In particular, this code allows the free repatriation of foreign capitals and the salaries of foreign employees. The government has also established duty-free points or incentives to increase exports. Companies which benefit from this regime do not pay any tax or customs duty. Finally, the Mauritanian government has revised its laws on the Oil Code in order to facilitate foreign investment in this field.

Country Strong Points

The main strong points of the country are:
- Its geographical location, at the crossroad between Maghreb and Black Africa;
- An oil market in full expansion;
- The establishment of  privatization policies and trade liberalization with the collaboration of the International Monetary Fund;
- FDI has become easier and there is an equal treatment between foreign and domestic investors.

Country Weak Points

The main weak points of the country are:
- Its political instability, as shown during its last coup d'etat which took place in August 2009;
- Security problems with the development of armed groups claiming being part of Al Qaeda;
- Inadequate infrastructures which hamper the economic development of the country;
- A very young population (more than 64% of the population is under 25 years old) and they do not have an adequate level of qualifications for management positions;
- An increase in desertification phenomena;
- A high level of poverty (40% of its population);
- Corruption, which affects all the sectors of the economy. 

Foreign Trade Overview

In 2006, Mauritania experienced a turnaround change. Although, its current transactions balance had been registering a serious deficit for several years, in this year, it displayed a surplus of 6 to 9% of its GDP.  Its foreign trade had reached EUR 1.471 billion, which means an increase of 34% in relation to the year before.  Exports represented EUR 923 millions, which means a growth of 66%, notably due to the rise in oil prices.  Imports also had a growth of 27%. In 2008, the trend continued since Mauritania exported EUR 1.60 billion and imported a total of  EUR 1.67 billion.  However, this rise on the trade balance did not resist the effects of the crisis.  After a drop of exports in iron and mineral ores in 2009 and 2010, the country's trade balance will remain negative in 2011 due to an increase in imports.

Iron ore and fishing products constitute its two main exports, representing 36.8% and 14.1% respectively, while crude oil represents 5.2%. Mauritania's main clients are China, Italy, France, Belgium and Spain. Its main imports are: equipment for mining and oil extractive industries, capital goods, vehicles and food products. Its main suppliers are France, China, the United States, Belgium and Spain. Mauritania has little commercial contact with other African countries, Egypt being its 19th supplier on the list.