Country Report Mauritania July 2009

Outlook for 2009-10

The postponed presidential election, rescheduled for July 18th, will be a close run contest between ten presidential candidates. A second round of voting is expected to take place, in early August, when the alliances forged between the different political leaders will be crucial in deciding whether the former leader of the junta, General Mohamed Ould Abdel Aziz, retains power. Political tension will remain high and a return to the political deadlock seen over the past year or so cannot be ruled out. The fiscal deficit is forecast to narrow to 6.8% of GDP in 2009 and 6.3% of GDP in 2010, assuming mining revenue picks up and the election outcome leads to renewed aid flows. Real GDP growth is forecast to drop to 1.5% in 2009, owing to a slowdown in construction and mining activity, before picking up to 3% in 2010. The current-account deficit is expected to widen to an equivalent of 5.8% of GDP in 2009, before contracting slightly to 5.2% of GDP in 2010.

The political scene

The presidential election scheduled for June 6th has been postponed to July 18th after an agreement, brokered by the African Union (AU), was reached between the military junta and representatives of the main political parties in Mauritania. Ten candidates, including General Abdel Aziz, will contest the July election. The AU has lifted the sanctions it imposed on Mauritania following the military coup in late 2008.

Economic policy

Data published by the Treasury indicated that fiscal spending in April and May was almost double that in March. The rise is a consequence of election-related current spending, higher subsidies for public companies and for the food distribution programme and higher capital spending through public investment programmes.

The domestic economy

Oil production fell to an average of 11,000 barrels/day in May and could decline further in the coming months as Petronas, the Malaysian company that operates the Chinguetti oilfield, has failed to announce the drilling of more wells to stabilise production levels. In contrast, the gold mining sector has received a boost from rising output and new discoveries of gold reserves.

Foreign trade and payments

Recent data from the IMF highlight the importance of China as a trade partner to Mauritania. The proportion of exports destined for the Chinese market has increased rapidly since oil production commenced at the Chinguetti oilfield, rising from 27% of total exports in 2006 to 54% in 2008.

This report covers the following industry codes:
SIC Code: 60;10
NAICS Code: 52;212