Mauritania - Public Expenditure Review : Update

Abstract

Mauritania is a West African country
 located on the western edge of the Sahara desert, with a
 population of approximately 3 million people that is mostly
 concentrated in the urban areas. The country is in part
 desert (3/4 of the 1,030,700 square kilometers of the
 territory). Since independence in the 1960s,
 Mauritania's economy has been dependent on natural
 resources, iron ore first then combined with fisheries, and
 presently oil and other minerals. The severe droughts of the
 1960s and 1970s, which generated migration from rural to
 urban areas and created pressures on the country's
 administration through increased demand for education,
 housing, employment, health, administrative and other
 services, which continue up to today. Mauritania's
 eligibility to the multilateral debt relief initiative in
 2006, the beginning of oil exports, the successive food,
 financial and political-institutional crises, as well as the
 mining sector boom, were the major factors in the changes in
 economic aggregates over this period. Mauritania's
 economic performance deteriorated sharply in 2008-09 on the
 back of these domestic and external shocks. Real gross
 development product (GDP) contracted from 5.9 percent in
 2007 to -1.2 percent in 2009. The external positions
 weakened from a deficit of 9 percent of GDP in 2007 to 12.3
 percent of GDP in 2009, and international reserves only
 covered about two months of imports. The government launched
 the Special Intervention Programme (programme special
 d'intervention - PSI) in 2008 to reduce the impact of
 the food crisis on the population. The country faces several
 key challenges in its recovery, including a narrow
 productive base, vulnerability to external shocks, a weak
 business climate, and persistent poverty levels in the rural
 sector. While the government has an integrated reform agenda
 on Public Finance Management (PFM), this report highlights a
 number of bottlenecks that affect the planning and execution
 of expenditures affecting development goals, and offers a
 set of prioritized, sequenced measures that mitigate them.