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Quick Facts
- Population:
- GDP (PPP):
- $17.3 billion
- 3.2% growth
- 3.5% 5-year compound annual growth
- $4,444 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
Mauritania’s economic freedom score is 55.7, making its economy the 119th freest in the 2019 Index. Its overall score has increased by 1.7 points, with improved scores for judicial effectiveness, fiscal health, and property rights offsetting declines in labor freedom, business freedom, and monetary freedom. Mauritania is ranked 18th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.
Although foreign investment in Mauritania’s mining and oil sectors has driven recent growth, half of the population still depends on farming and animal husbandry. Institutional weaknesses and 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. General Mohamed Ould Abdel 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, and the government has cracked down on antislavery activists. 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.
The registration system for real property has been made more efficient, but courts generally do not protect property rights well. Enforcement of contracts has been improved. The judicial system is weak, chaotic, and heavily influenced by the government. Corruption is most pervasive in government procurement but is also common in the distribution of official documents, fishing licenses, land, bank loans, and tax payments.
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 25.9 percent of total domestic income. Over the past three years, government spending has amounted to 29.3 percent of the country’s output (GDP), and budget deficits have averaged 1.3 percent of GDP. Public debt is equivalent to 91.1 percent of GDP.
Bureaucratic procedures are complex and lack transparency. Obtaining necessary business licenses is time-consuming and costly. The absence of a well-functioning labor market has led to chronically high unemployment and severe underemployment. The effectiveness of monetary policy is limited by a vast informal grey economy, and the central bank’s move to redenominate the local currency has shown little impact.
The combined value of exports and imports is equal to 109.3 percent of GDP. The average applied tariff rate is 8.7 percent. Open-market policies to promote dynamic investment have not been fully institutionalized, and nontariff barriers to trade and other restrictions inhibit entrepreneurs from participating efficiently in the global economy. About 25 percent of adult Mauritanians have access to an account with a formal banking institution.