According to the World Bank’s Report on the Economic Situation in Mauritania, the country’s economic recovery in 2021 was substantial but fell short of pre-COVID-19 levels and growth potential.
Growth is expected to return by 2.4 percent in 2021, mainly to increased private consumption and investment, as well as improved service sector performance.
Similarly, the pandemic’s detrimental impact on human, economic, and social activities lessened dramatically in 2021, demonstrating the rebound in growth and the effectiveness of the government’s mitigating measures.
According to the research, Mauritania has recently demonstrated good economic improvements such as a surplus budget balance, a drop in the overall public debt-to-GDP ratio, and a monetary policy conducive to the return of growth.
With successful COVID-19 vaccination efforts, a growing extractive sector, and an anticipated increase in public sector contribution, the country appears to be on track for more positive growth in 2022.
However, the country remains exposed to shocks such as a longer COVID-19 pandemic, security threats in the Sahel region, a lengthy conflict in Ukraine, and drought-related risks that could lead to lower activity.
In the medium term, the government should prioritize budgetary sustainability as well as inclusive growth development through a better relationship with the private sector.
Furthermore, it is critical to continue to enhance the business climate and practice careful debt management.
Cristina Isabel Panasco Santos, World Bank Country Manager for Mauritania, underlines that “medium and long-term fiscal sustainability as well as an environment conducive to economic transformation are essential conditions for private sector-led growth and therefore poverty reduction”.
Mauritania benefits from a resilient and job-creating formal private sector. However, in comparison with other economies, formal sector actors are few, representing only a small part of economic activity. These actors are held back by certain constraints such as lack of access to finance and low levels of innovation and technology adoption.
According to the survey, only 14 percent of enterprises in the country have received a loan in recent years, while 12 percent require a loan to increase their output but do not have access to it.
More than 80% of these loans were made to multinational corporations. Small and medium-sized firms (SMEs) continued to adopt technology at a low rate in 2021, particularly when it came to using technology to support general business tasks such as sales, procurement, quality control, and marketing.
Technology is being used to conduct productive duties such as administration, payment processing, and production planning, but its application is still limited.
The research suggests legislative steps to address these obstacles, such as improving SMEs’ access to finance, increasing business understanding and adoption of technology, and regulatory reform. to encourage the development of the private sector and the creation of more competitive markets