NOUAKCHOTT, July 26, 2024 - The World Bank has released the seventh edition of its Economic Update for Mauritania, highlighting a slowdown in economic growth in 2023 despite strengthened macroeconomic stability.
Economic growth declined in 2023 to 3.4% (0.7% in per capita terms), following a strong expansion of 6.4% (3.7% in per capita terms) in 2022. This deceleration is partly due to tighter monetary policy and fragile dynamics in key sectors such as rainfed agriculture and extractive industries. However, Mauritania's growth performance remains higher than the world average of 3 percent and that of sub-Saharan Africa at 2.9%.
In 2023, inflation declined faster than expected, reaching 5% compared to 9.6% the previous year. The current account deficit narrowed, supported by lower international food and energy prices as well as a reduction in capital goods imports. The fiscal deficit also declined to 2.5 percent of GDP, supported by lower capital expenditure.
The medium-term outlook remains favorable with growth projected at 5.4%. To realize sustainable growth potential, it is crucial to overcome structural challenges by improving public financial management, optimizing labor use, and creating a more stable tax base.
The report highlights the challenge of low human capital utilization in Mauritania: children born in 2024 can expect to utilize only 15% of their human capital potential by age 18. Addressing bottlenecks that prevent the full and effective utilization of human capital is paramount and particularly acute for youth, women, and educated workers. Closing gender gaps, empowering women in the workforce, and improving access to education and economic opportunities for youth are critical to maximizing the country's economic potential.
In response to these challenges, the report proposes priority reforms to strengthen sustainable and inclusive growth.
Improving the quality of education and vocational training to meet labor market needs as well as enhancing employment prospects and support for entrepreneurship are among the reform areas proposed in the report.
The report also recommends improvements in budget programming and execution, adopting a prudent and transparent tax framework, and optimizing the country's labor market information system as real opportunities.
“Although Mauritania has made important strides in macroeconomic stability, it is fundamental to address the structural challenges that constrain long-term growth. By continuing its efforts to maximize human capital and optimize public finance management, Mauritania will not only be able to consolidate its gains but also promote more sustainable and inclusive growth,” said Ibou Diouf, World Bank Resident Representative in Mauritania.