The World Bank's 5th edition of the economic report highlights the country’s substantial economic recovery in 2021. However, it didn't surpass pre-COVID-19 levels and expected growth potential. Nevertheless, according to the report, growth in 2021 in the pandemic disruption on humans, the financial state, and social activity was significant.
The report acknowledged Mauritania's positive economic growth to overcome the post-pandemic situation, including budget surpluses, the country’s debt-to-GDP ratio reduction, and monetary policy to support a return to growth. Moreover, with a successful vaccination campaign against COVID-19, a thriving mining industry, and expectations of increased contributions from the public sector, the country is expected to have a better outcome in 2022.
Despite the efforts, the country remains vulnerable to the effects of COVID-19, the Russia-Ukraine conflict, a coup in the Sahel, and drought, which could reduce economic activity. Therefore, the government must develop sustainable public finances and inclusive growth by strengthening partnerships with private organizations. Also, improvements in the business environment and debt management are necessary.
Cristina Isabel Panasco Santos, President of the World Bank in Mauritania, stressed that "medium- and long-term fiscal sustainability and an enabling environment for economic transformation are necessary for private sector-led growth and poverty reduction." Mauritania also reaps the benefits of a robust private sector that is job-creating. However, in comparison to other sectors, formal business entities are a few and account for a small fraction of essential economic activity. Moreover, these sectors are held back due to a lack of access to financing and lower-grade innovation and technological deployment.
As per the report, only 14% of companies in Mauritania had obtained loans in the last few years, and 12% required loans to expand production but could not obtain them. Out of these, 80% of loans went to large corporations. Adopting SMEs technology remains on the downside through 2021, especially in general business functions such as sales and purchasing, marketing, and quality control. On the other hand, adopting technology to perform production functions is relatively common. Still, its use remains limited to areas including administration, production planning, and payment processing is relatively common, although its use remains limited.
The report also suggests measures to address Mauritania's constraints, including strengthening SMEs' access to finance, raising business awareness and technology adoption, and policy reforms. Promote the development of the private sector and enter competitive markets.