Mauritania - Islamic Development Bank

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construction) accounted for 48% of GDP in 2008 and services for 42%. Mauritania had a GDP of $3.0 billion in 2009 and a GDP per capita of $975 which classifies it as an LDMC. 9. Economic Growth during 2004-2008 was moderate, averaging 5.5%, supported by prudent economic management, structural reforms and a surge in oil production in 2006. Thanks to sound macroeconomic policies— in particular fiscal reform including enhanced transparency and decentralization of financial control, and improved monetary management through Central Bank capacity building and exchange rate management—inflation dropped from 16.1% at end 2004 to 8.9% at end 2006 and to 7.3% in 2008. Structural reforms in this period included a new code for public procurement and steps to enhance the independence of the central bank. Expectations related to oil exploration drew an important inflow of foreign direct investment in 2004 and 2005 and the accompanying surge in oil helped Mauritania achieve an 11% growth rate in 2006. However, the surge in oil production proved to be short-lived and revision of these expectations downward and technical problems prevented the country from sustaining FDI inflow at a high level and lowered the growth prospects. 10. Economic performance deteriorated in 2008-10 due to domestic and external shocks and, as a result, economic growth during the PRSP II period 2006-2010, averaged 3.7%, well below plan projections of 9.4%. The global food and fuel price increases in 2008 weakened the external account--the current account deficit in 2008 reached 15.5%--and kept inflation at 7.3%. The external shocks coincided with the last coup d’état in August 2008 and an associated drop in donor financing--the IMF program in the form of a Poverty Reduction and Growth Facility was also interrupted following the military coup- -weakening economic activity in the mining, fishing, and the construction sectors. The global economic slowdown in 2009, and the unexpected decline in oil production, contributed to further fiscal and balance of payments pressures. There was a decline in the prices of and the demand for Mauritania’s main export commodities (iron, copper, and fish). The anticipated shift to an oileconomy also did not take place and by 2009, the average oil production was only 10,740 barrels/day instead of the initial estimate of 75000 barrels/day in 2006. Because of these developments, average GDP growth slowed to 3.7 percent during 2006-10 (based on updated official figures contained in PRPS III) well below projections of 9.4 percent contained in PRSP II. 11. Mauritania imports most (70%) of its food requirement and international food prices increases in 2008 directly affected national prices. For example, the share of food expenditures in total households’ expenditures increased from 51.9% in 2004 to 57.8% in 2008. In response to this situation, the government adopted the Special MCPS for Mauritania, 2011-2015 3
Intervention Program (SIP) amounting to about US$ 194.2 million. The SIP, representing 15% of total public spending, increased the public deficit by 1% and helped to avoid social unrest although its effectiveness in alleviating food insecurity is not clear—see Section V—and inflation fell to 3.9% (by yearend) in 2008, in comparison with 7.4% in 2007. 12. Poverty declined between 2004 and 2008 but remains high and is mainly a rural phenomenon. Poverty incidence has declined from 47.6 percent in 2004 to about 42 percent in 2008 (Figure 3). The percentage of population living in extreme poverty in rural areas increased from 39.1% in 2004 to 40.8% in 2008. Recent domestic and external shocks have likely slowed progress on poverty reduction, highlighting the need to protect social spending and develop appropriate safety nets for the most vulnerable segments of the population. In fact, the poverty rate increased marginally in rural areas over the period 2004 - 2008 (from 59% in 2004 to 59.4% in 2008). 13. Poverty is more pronounced among households headed by persons employed in the agriculture sector and is increasing with the household size 1 . Data show that households headed by people employed in agriculture (including livestock) are the most affected by poverty, followed by those employed in the transport and communication sector. However, households headed by public sector wagesearners are less exposed to poverty. 1 According to the EPCV 2008. 4 14. There was a progress in the social sectors, but the achievement of the Millennium Development Goals (MDGs) remains a key challenge. Mauritania ranked 154 out of 182 countries according to the Human Development Index in 2009. Overall, the most important deficiencies in the progress toward the achievement of the MDGs in Mauritania are related to health, environment, employment and some gender indicators (UNDP 2010). Table 1 shows that although Mauritania is likely to meet its MDG relating to access to water, it faces challenges in meeting the MDGs particularly related to maternal and child mortality. 15. As in other countries, food insecurity is associated with poverty and remains one of the most important causes of malnutrition in Mauritania. Based on FAO estimates, 29% of Mauritanian households were food insecure in 2008. Almost half of households do not have access to safe drinking water and diarrheal diseases, malaria and acute respiratory infections still claim the lives of many young children. The underperformance of the agriculture sector, characterized by an under exploitation of arable lands and slow progress of irrigation, is an important cause of food insecurity. In addition to the hard climate conditions, weak productivity of rural sector has exacerbated the threats of food insecurity on the Mauritanian economy. Land degradation, weak mechanization, high production costs, low access to agricultural loans, absence of loans devoted to livestock activities and lack of supports to commercialization are among the main factors contributing to these low productivity of the rural sector. 16. More recently, lower food and fuel prices accompanied by the normalization of relations with the international community have helped cushion the impact of the global economic slowdown on the external position. The current account deficit was 12.7 percent in 2009, down from 15.7 percent in 2008. The decline in exports was more than offset by a marked reduction in imports, reflecting the contraction in economic activity, lower world food and fuel prices, and the foreign exchange rationing. The resumption MCPS for Mauritania, 2011-2015
Page 2: MCPS for Mauritania, 2011-2015 ISLA
Page 6 and 7: CURRENCY US$1 = 283.500 UM Euro 1 =
Page 8: Country Department (Coordinator) AC
Page 12 and 13: As part of its new Vision, the IDB
Page 14 and 15: I. INTRODUCTION 1. As part of its n
Page 18 and 19: Reduce child mortality TABLE 1: Mil
Page 20 and 21: the vulnerability created by the de
Page 22 and 23: gold, copper, oil and deep-sea fish
Page 24 and 25: Box 1: Lessons Learnt from the Impl
Page 26 and 27: TABLE 7: High Growth Scenario 2010
Page 28 and 29: 3. Other Donors Involvement in Maur
Page 30 and 31: • The current rate of progress of
Page 32 and 33: strategy giving priority to strengt
Page 34 and 35: Integrated Rural Development progra
Page 36 and 37: Figure 13: Survey of Constraints Fa
Page 38 and 39: (e) the conservation of the environ
Page 40 and 41: 3. The flexibility to finance other
Page 42 and 43: Human Development (Primary Healthca
Page 44 and 45: ANNEXES MCPS for Mauritania, 2011-2
Page 46 and 47: MAURITANIA AT A GLANCE Selected Mac
Page 48 and 49: PILLAR 2 -- RURAL DEVELOPMENT AND F
Page 50 and 51: PILLAR 2 -- RURAL DEVELOPMENT AND F
Page 52 and 53: PILLAR 3 -- ENHANCING AND DIVERSIFY
Page 54 and 55: Cross-cutting Theme: CAPACITY BUILD
Page 56 and 57: Cross-cutting Theme: CAPACITY BUILD

Mauritania - Islamic Development Bank

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