NOUAKCHOTT, July 26, 2024 - The World Bank has released the seventh edition of its Economic Update for Mauritania, which highlights a slowdown in economic growth in 2023, despite strengthened macroeconomic stability.
Economic growth declined in 2023 to 3.4% (0.7% in per capita), following a strong expansion of 6.4% (3.7% in per capita) in 2022. This deceleration is partly due to tighter monetary policy and fragile dynamics in some 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 (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%. In order to realize sustainable growth potential, it remains crucial to overcome structural challenges, including by improving public financial management, optimizing the use of existing labor, and creating a more stable tax base.
The report highlights the current 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. It is therefore paramount to address the bottlenecks that prevent the full and effective utilization of human capital, which is particularly acute in the country, and disproportionately affect youth, women, and educated workers. Closing gender gaps, lack of empowerment of women in the workforce, and access to education and economic opportunities for youth remain critical to maximizing the country's economic potential.
In response to these challenges, the report proposes priority reform options to strengthen sustainable and inclusive growth.
In this regard, the improvement of the quality of education and vocational training to meet the needs of the labor market, as well as the improvement of employment prospects and support for entrepreneurship, are reform areas proposed in the report.
The report also recommended improvements in budget programming and execution, the adoption of a prudent and transparent tax framework, and the optimization of the country's labor market information system, which offer 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.
