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Quick Facts
- Population:
- GDP (PPP):
- $16.4 billion
- 1.9% growth
- 4.0% 5-year compound annual growth
- $4,328 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
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Mauritania’s economic freedom score is 54.0, making its economy the 134th freest in the 2018 Index. Its overall score has decreased by 0.4 point, with lower scores for the tax burden and fiscal health indicators outpacing an improvement in judicial effectiveness. Mauritania is ranked 24th among 47 countries in the Sub-Saharan Africa region, and its overall score is below the regional and world averages.
Recent GDP growth has resulted from foreign investment in Mauritania’s mining and oil sectors, but half of the population still depends on farming and animal husbandry. Institutional weaknesses and ongoing political instability undercut regulatory reforms implemented to enhance the entrepreneurial environment. Pervasive corruption undermines the rule of law and is exacerbated by an inefficient and politically vulnerable judicial system. Open-market policies to promote investment are not fully institutionalized, and tariffs and other restrictions prevent entrepreneurs from participating efficiently in the global economy.
Background
Amid tensions among Arabic-speaking descendants of slaves, Arabic-speaking “White Moors,” and sub-Saharan ethnic groups, a military junta ruled Mauritania until the first multiparty elections, held in 1992. In 2008, President Sidi Ould Abdallahi was overthrown by General Mohamed Ould Abdel Aziz. Aziz was elected president in a 2009 race boycotted by the opposition and reelected to a final five-year term in 2014. In 1981, Mauritania became the last country in the world to outlaw slavery, but as much as 20 percent of the population remains enslaved. Terrorist groups affiliated with Al-Qaeda threaten the mostly desert country. Extractive industries (oil and mines), fisheries, and agriculture dominate the economy, and large offshore fields could become a significant source of natural gas.
Property rights are protected under the Mauritanian Civil Code, but gaining redress for grievances through the courts can still be difficult. Although the constitution and law provide for an independent judiciary, the executive branch exercises significant influence by appointing and removing corrupt and unskilled judges. Corrupt practices exist at all levels of government, most pervasively in procurement.
The top individual income tax rate is 30 percent, and the top corporate tax rate is 25 percent. Other taxes include a value-added tax. The overall tax burden equals 29.7 percent of total domestic income. Over the past three years, government spending has amounted to 30.1 percent of total output (GDP), and budget deficits have averaged 2.3 percent of GDP. Public debt is equivalent to 99.6 percent of GDP.
Business freedom has stagnated in Mauritania. Complicated labor laws and employment regulations encourage temporary labor contracts rather than permanent employment. Companies are limited in their ability to hire or dismiss employees. Illegal, de facto slavery continues to exist. In an era of lower commodity prices, the government needs to make more progress in streamlining subsidies.
Trade is extremely important to Mauritania’s economy; the combined value of exports and imports equals 103 percent of GDP. The average applied tariff rate is 11.7 percent. Nontariff barriers impede trade. Government openness to foreign investment is below average. The presence of numerous state-owned enterprises deters opportunities for private investment. Modernization of the financial sector has been sluggish and limited.