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Country name: Islamic Republic of Mauritania
Population: 3,270,000 (July 2007 estimate)
Land Area: 1.04 million km²
Major Languages: Arabic and French
Currency: 1 ouguiya = 5 khoums
Main Cities: Nouakchott (capital), Nouadhibou, Kaedi, Zourate
Visa Requirements: Required
Mauritania lies mainly in the Sahara Desert belt of West Africa and shares borders with Morocco, Algeria, Mali and Senegal. The capital city and major port is Nouakchott while other major towns are Kaedi and Zouerate and the port of Nouadhibou. The country possesses a 700km Atlantic coastline and in total is approximately twice the size of France, although some 60% of the land mass is desert.
The constitution of the Islamic Republic of Mauritania which was approved in 1991 provides for a multi-party system with an elected president. It is based on the French presidential model. Voting takes place on the basis of universal adult suffrage of all citizens over the age of 18 years. Legislative power is vested in a National Assembly (al Jamiya al-Wataniyah) and Senate (Majlis al-Shuyukh). Mauritania is divided into twelve regions (régions) and one capital district, which in turn are subdivided into forty-four departments (départements).
As stated in the constitution, the official language is Arabic and it is also one of several national languages officially recognised. The transitional government which assumed power in August 2005 was carrying out a democratic transition. In a constitutional referendum held on 25 June 2006, strong backing was received for the strategy of return to democratically elected institutions, which culminated in presidential elections in March 2007, following the parliamentary and local elections that were held in November and December 2006.
Mauritania’s major export industries are iron ore, fish and fish products, while its most important imports are machinery and equipment, petroleum products, capital goods, foodstuffs and some consumer goods.
Reflecting difficult conditions in a number of sectors -oil, but also agriculture, fishery and construction- growth in 2006 was less buoyant than projected, and the supplementary budget law adopted in July has not yet shown significant impact on activity. Non-oil growth is now estimated at 4.3% over 2006 against an original target of 6%.
"The transition government has achieved important progress in structural reform,” stated the IMF in a briefing in February 2006. “Key steps included the passing of an ordinance that will increase central bank autonomy in the conduct of monetary policy, and the successful launching of the foreign exchange market in January 2007. In addition, a banking ordinance approved by the council of ministers in December 2006 is expected to take effect soon. This ordinance will limit loans to related parties and ensure separation between bank managers and owners,” the IMF continued.
"Some delays were experienced in the structural reform agenda, notably with respect to the introduction of a new money market instrument, the adoption of a computerized execution of the budget, and of balanced budgets in 2007 for the water and electricity companies,” the IMF concluded.
Mauritania’s 2007 budget proposes some important reforms on customs, tariffs and taxation. The budget projections are based on prudent non-oil revenue assumptions, in particular the likely impact of the import taxation reforms introduced in 2007, as well as on comprehensive and realistic expenditure projections. Owing to the low taxation of new mining projects and the stability of fishing receipts, non-oil revenue is projected to increase only moderately in 2007.
A new customs tariff, which is largely in line with the tariffs applied in the West African Economic and Monetary Union region, took effect in 2007. A number of exceptions to the tariff classification principles will be gradually eliminated. With regards to rice, where production is heavily protected and subsidized, the present tariff rate (20%) will be revised in the 2008 budget law at the latest as part of the implementation of a restructuring plan for the sector, in the context of a new strategy for the development of rain-fed agriculture. Moreover, the rate of the presumptive corporate income tax will be lowered by half a point, from 4% to 3.5%; the statistical tax will be extended to all imports and its rate reduced to 1%; and value-added tax exemptions on 11 products (meats and some dairy products) will be eliminated. Mauritania is also to introduce a 7.5% excise tax on sugar. Overall, the measures are expected to generate about 0.4% of non-oil GDP in additional revenue. The government is also intending to improve the taxation of the country’s informal sector.
The development of Mauritania’s oil and mining exports should result in a notable improvement of the external position in the medium to long term. While the level of oil exports is now expected to plateau during the next three years, the country will benefit from the projected increase in the national industrial and mining company (SNIM) production and the impending start-up of gold and copper mining activities at Akjoujt (copper and gold) and Tasiast (gold). In the fishing sector, the new agreement with the EU should translate into large and steady revenue flows, while recent measures in favour of the national fleet should support fish exports.
Mauritania is receiving increased international attention as a new player in the global oil industry and began pumping its first supplies from the Chinguetti field in 2006 following the conducting of successful offshore explorations. Owing to unexpected technical difficulties, however, oil production gradually declined from a level close to 75,000 barrels per day (bpd), the maximum installed capacity, in March 2006 to about 30,000 bpd in the third quarter. It was expected to remain at that level at least throughout 2006.
Nevertheless, in recent years international commercial interest in the country raised considerably, following the discovery of offshore oilfields in May 2001. Little over five years ago there were no known oil reserves in Mauritania, but this has now changed. Since 2004 German companies are involved in oil activities in Mauritania.
The country's potential is now regarded as significant and economically viable with one oil operator on record as estimating the possibility that there will be several billion barrels of oil found offshore Mauritania over the next 5-10 years. International investors are convinced that Mauritania has sufficient reserves and is well located to become a transport route to eventually supply LNG to the US and Europe. Companies have been impressed by the highly co-operative approach adopted by Mauritania in its encouragement given to investors.
Oil revenues are now expected to rise substantially after 2006 once production begins, the EIU says in a recent report. Eventually, the new found oil wealth may allow the country to become less reliant on international donor funding giving it greater resources to invest in development projects needed in order to diversify its economy away from the traditional dependence on agriculture, fishing and mining. The most recent positive news regarding Mauritania’s emerging oil sector came when developers on the Tiof 6 site announced that it could contain 1 billion barrels of oil.
The successful discovery of oil offshore of Mauritania comes from deep water exploration which has been permitted by recent advances in seismic drilling and production technology. The 3D seismic technology now available to the industry has transformed the prospects of oil exploration in the whole of West Africa. The region once seen as remote and high-risk is now regarded as an attractive proposition.
Advances in industrial technology are not the only important factor; the others are recent and continuing high oil prices and ongoing uncertain world events, particularly in the Middle East.
Progress towards realising Mauritania's potential as an oil exporter can be traced back to the activities of companies like the small Australian company Elixir run by Max de Vietri, who was the first to acquire rights to some of the then unlicensed oil exploration areas in the country. The company moved in during the mid-90s when the prevailing mood among the industry was that Mauritania's potential was too high a risk. Obviously, with higher oil prices on the international market, reserves like those of Mauritania become necessarily more attractive. In 2001 Sydney's Roc Oil Company purchased Elixir's shares in the Mauritanian fields. The principal shareholder in these sites is Woodside Petroleum. The country's previous involvement in the oil industry has been in refining where it is one of the four refining countries in West Africa making the downstream oil industry a significant element in the economy. Oil derived products supply 95% of the country’s commercial energy needs.
In addition to the offshore activities, international interest seems to be growing in the country's onshore potential. Moves are currently being made onshore with French company Total set to start exploring in two sites in central Mauritania, blocks TA7 and TA8, covering an area of almost 58,000km2.
German company Wintershall started exploring in two sites in North-East Mauritania, blocks TA5 and TA6, covering an area of around 68,000km2.
In March 2004, the UK's BG Group, formerly British Gas, acquired a 13.084% interest in Production Sharing Contract (PSC) A which covers Block 3 and shallow water Blocks 4 and 5 and an 11.63% interest in another, PSC B, covering deep water Blocks 4 and 5. Both PSCs are operated by Woodside. BG is the only large international company operating in the country at present.
Woodside Petroleum is presently looking to establish a new LNG liquefaction plant in the country, the authoritative MEES reported on 18 April 2005. To this end, the company has formed a business group to look at options for the development.
Two oil fields, Chinguetti and Tiof, have been discovered in PSC B, and a gas field, Banda, has been discovered in PSC A with an estimated potential of between 1 and 3 trillion cubic feet (cf). With multiple additional prospects, several additional exploration and appraisal wells are being drilled.
Since the discovery of Chinguetti field three appraisal wells have been drilled there, of which one was subject to an extended production test. Full development of the field commenced in June 2004, with first production expected in 2006. The development consists of sub-sea completed wells tied back to a leased floating production, storage and offloading tanker. A total of ten wells are planned, with six production wells expected to be available at start-up in first quarter 2006. Four water injection wells are planned. Associated gas disposal of 50 to 60 billion cf will be through a single injection well into the undeveloped Banda gas field about 22km to the east. Gas has also been discovered elsewhere at Pelican in Block 7.
BG Group's plans include investigating the possibility of developing an LNG export project in the country depending upon economic viability, discovery of sufficient gas reserves and agreement on fiscal and contractual terms that would make such a project economic.
The country's location is regarded as a key factor adding to its attractions as supplier of oil. Mauritania is conveniently positioned for exporting to the US market as it enjoys a stretch of Atlantic coastline some 750km long.
Apart from the burgeoning oil and gas sectors, Mauritania's economy depends on traditional agriculture, fishing off its rich coastal waters and a modern mining industry that developed in the 1960s following the discovery of high-grade iron ore. Raising crops and pasturing livestock remain the main economic activities. Major agricultural products, produced chiefly near the Senegal River on irrigated lands and in scattered oases, are millet, dates, sorghum, and yams. Livestock such as sheep, goats, cattle, and camels are raised.
The important fishing industry is based on the Atlantic coastal waters and on the Senegal River. Fishing contributes around 10% of the country’s GDP and 45% of its export earnings. The main kinds of fish that can be caught are deep sea species and shellfish, such as shrimp for the markets like Japan. Since 1980, all foreign commercial fishing in its territorial waters must be carried out jointly with Mauritania; this policy has significantly increased export earnings since the nation’s coastal waters are among the richest fishing areas in the world. The European Union reached a four-year agreement with Mauritania in 2001, which has been renewed in 2006, to allow European trawlers to fish in Mauritania's waters.
Iron ore sales account for about half of the country's export earnings. Gypsum and salt are also mined. Mauritania has large copper ore reserves, but difficult mining conditions and low world commodity prices have resulted in mine closures. The country's few manufactured goods are made up principally of processed food (especially frozen fish) and clothing. Smaller industries include brewing, dairy processing, oil and sugar refining.
Mining of mainly iron ore is a major economic activity accounting for around 12% of the country's GDP and is the leading employer after the public service. Activity in the sector is dominated by the leading mining company, Societe nationale industrielle et miniere (SNIM). The IMF estimated that Mauritania's overall exports increased from $303 million in 2003 to $408 million in 2004, which is in the main attributed to increased iron ore export earnings.
The country's other commercially exploitable mineral deposits consist of copper and cobalt. Gold and diamond rich sites have also recently been discovered through prospecting and they may prove economically viable. De Beers and other leading diamond companies are currently exploring the country's potential in this regard. On the strength of the deposits that have so far been discovered, the World Bank reported that Mauritania could become a diamond producer in the medium term.
Manufacturing, handicrafts and fish-processing together contribute about 7% of the country's GDP. Food processing is the main manufacturing activity, while non-food manufacturing activities include chemicals and plastics, building materials, paper and packaging. However, these are all conducted on a small scale and are not particularly attractive to foreign investors.
Expansion of the tourism sector offers new and promising potential, if it were to receive a significant investment boost, particularly to improve facilities and infrastructure. It is currently very underdeveloped with annual revenues estimated at only $20 million and visitor numbers are currently only in the thousands. Most of the country’s visitors are business travellers to the capital Nouakchott, where the international standard hotels are located. Tourism in Mauritania at present consists mainly of desert holidaying, which has seen demand increase steadily over recent years, but other niche tourism activities are emerging, such as fishing, hunting and bird watching. The tourism potential definitely extends well beyond the desert areas, as the government recognised when it launched its tourism promotion policy in 1998.
In addition to its extensive coastline, Mauritania possesses a rich and ancient heritage which includes the old trading and religious centres of Ouadane, Chinguetti, Tichitt and Oualata. These areas would attract visitors if marketed more imaginatively and if the essential support infrastructure was improved. These ancient settlements were founded in the 11th and 12th centuries to serve the caravans crossing the Sahara and became focal points of Islamic culture. They have preserved an urban fabric that evolved between the 12th and 16th centuries. Typically, houses with patios crowd along narrow streets around a mosque with a square minaret. The four ancient cities have been designated UN World Heritage Sites, while the nature reservation of Banc d'Arguin is also protected. Mauritania is trying to balance preservation of its natural environment with development of tourism and increasing the number of visitors.
The Mauritanian authorities expressed the intention of developing tourism in the official 1994 declaration on general tourism policy. In 1996, this objective was given material expression with the adoption of Law No. 96.023 organizing tourism activity in Mauritania. At present, tourism is being promoted primarily by the Tourism Directorate of the Ministry of Trade, Craft Industries and Tourism.
Tourism also benefits from specific provisions of the Investment Code. Under the 1996 Law, the exercise of any tourism activity is subject to the approval of the tourism ministry, which consults an approvals committee. The obligations on tourism establishments are those relating to the conformity of the services provided with the standing of the establishment; respect for the cultural and religious values of the Islamic Republic; an obligation to communicate information to the Tourism Directorate; the declaration obligation; new tax obligations; and the obligation to have advertising approved by the Ministries of Trade, Craft Industries and Tourism.
One factor hampering the growth in tourism is the fact that international flights into the country are infrequent and expensive. The part privatised national airline, Air Mauritanie, flies to Paris and countries in West Africa. Three international airports at Nouadhibou on the coast, the main airport serving the capital Nouakchott, also on the coast, and a third airport at the inland city of Atar, have connections to 13 national airports and an additional 20 airstrips.
An underdeveloped financial system is regulated by the country's central bank, the Banque Centrale de Mauritanie. Several commercial banks operate in the sector, including the Chinguetti Bank, which is 50% government owned. These are joined in the sector by a non-commercial bank, the Banque Al Amana pour le Developpement et l'Habitat. There is room for future expansion in Mauritania's banking sector under IMF advice and supervision.
Mauritania adopted a new investment code in 2002 in a bid to encourage both local and foreign investors; the latter are to be given greater security and offered exemptions on customs duties on equipment and goods imported for start-up, export-oriented projects. A "one-stop shop" to advise companies and assist in negotiations with government ministries has also been established. Foreign investors are in addition offered an attractive package of incentives including the free transfer of convertible currencies earned from new investments, the right to international arbitration in the event of disputes arising and a free-zone status for start-up companies geared towards exporting finished goods.
Chief exports, in addition to iron ore, are processed fish, gold, and cattle, the latter sent mainly to Senegal; leading imports are foodstuffs, machinery, transportation equipment, consumer goods, and refined petroleum. The country's principal trade partners are France, Japan, Italy, and Algeria. Iron ore is exported to steel manufacturers in the EU countries such as Belgium, France, Italy, Spain and the UK. The US has been growing in economic importance to Mauritania over recent years, but the European Union looks set to remain the most important economic and financial partner at least for the present.
Central Bank of Mauritania
Avenue de l’Independence, Nouakchott, Mauritania
P.O. Box 623, Nouakchott, Mauritania
Tel: + (222) 52 20 6
Mauritanian Bank for International Commerce
M.C.I Nouakchott, Mauritania
Tel: + (222) 25 28 26
Fax: + (222) 25 20 45
Air Mauritanie
Siège NKC, Avenue Gamal Abdel Nasser, P.O. Box 41, Nouakchott
Tel: + (222) 525 2721
Email:
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Quelle: Ghorfa, Arab-German Chamber of Commerce and Industry e.V.
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