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- GDP (PPP):
- $15.5 billion
- 6.4% growth
- 5.4% 5-year compound annual growth
- $4,288 per capita
- Inflation (CPI):
- FDI Inflow:
The Mauritanian economy has grown significantly since 2010, mainly as a result of investments in mining, which have underpinned the country’s sustained growth rate of over 5 percent on average over the past five years. Despite the economic expansion, however, policies needed to sustain long-term economic development are lacking, and there is considerable government interference in the economy.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 54.8 (up 1.5 points)
- Economic Freedom Status: Mostly Unfree
- Global Ranking: 128th
- Regional Ranking: 25th in Sub-Saharan Africa
- Notable Successes: Monetary Freedom
- Concerns: Rule of Law, Financial Freedom, and Business Freedom
- Overall Score Change Since 2012: +1.8
Overall progress in reforming and modernizing Mauritania’s resource-oriented economy has been uneven and deficient. Lingering corruption and an inefficient judicial system continue to undermine the rule of law. Erratic governance and structural problems constrain the emergence of a more dynamic private sector.
A military junta ruled the former French colony of Mauritania from 1978 until 1992, when the first multi-party elections were held. In 2008, General Mohamed Ould Abdel Aziz overthrew President Sidi Ould Cheikh Abdallahi. Aziz won elections, which were boycotted by the opposition, in July 2009 and again in June 2014. There are recurring ethnic tensions within the mixed population of Moors and black Africans. Mauritania is threatened by the terrorist group al-Qaeda in the Islamic Maghreb, which has kidnapped and killed several foreigners. Mining and fishing dominate the economy. Mauritania is one of Africa’s newest oil producers, and offshore gas exploration was proceeding in 2015.
Corruption and fiscal transparency are serious problems, especially in bank loans, fishing license attribution, land distribution, government contracts, and tax payments. Property rights are protected under the Mauritanian Civil Code, which is modeled on the French code. In practice, however, gaining redress for grievances through the courts can be difficult. The chaotic and corrupt judicial system is heavily influenced by the government.
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 17.7 percent of total domestic income. Government spending amounts to 28.7 percent of GDP. The budget remains in deficit, and public debt is equal to about 60 percent of total domestic output.
The minimum capital requirement for launching a business is over three times the level of average annual income, and obtaining necessary licenses is time-consuming. The labor law dating from 2004 is quite strict about hiring, and the required notification process makes dismissal difficult. Recognizing the fiscal unsustainability of subsidies, the IMF is pushing the government to adopt automatic price mechanisms to depoliticize price setting.
Mauritania’s average tariff rate is 8 percent. The government screens foreign investment. Most sectors of the economy are open to foreign investment, but the undeveloped judicial system may impede investment, and many state-owned enterprises deter opportunities for private investment. Progress in modernizing the financial sector has been sluggish and limited.