Mauritania’s economic growth has beenlargely driven by high commodity prices, leaving the countryvulnerable to shocks. From 2009 to 2015, real gross domesticproduct (GDP) grew by an average of 4.2 percent a year,primarily driven by rising commodity prices. The value ofits exports more than doubled between 2009 and 2013. Themining boom and extensive foreign investment in the sectorhave boosted growth in the construction, utilities,transport, and communications sectors while agriculture andfisheries have fallen behind. Budget execution has improvedas actual spending has started to match budgeted amountsmore closely in recent years. However, the overall figuresdisguise much greater discrepancies in individual lineitems, with significant variance even in relativelystraightforward areas such as debt servicing. Publicspending on social sectors remains below regional levels,health and social affairs grew, while the share of justiceand sector ministries declined. However, a large share ofexpenditure remains discretionary and unidentified: 30percent of total expenditures are reported as ‘unspecifiedexpenses’ and are not classified by economic category, whichgreatly complicates public expenditure monitoring and properexpenditure recording. Mauritania should enhance thetransparency and quality of its fiscal data by: (i) auditingthe national oil fund, (ii) increase budget credibility anddiscipline by minimizing ‘unspecified expenses’ and byproperly recording all expenditures (iii) reviewingpublic-sector staffing (iv) keeping its public financialdatabase (BOOST) up to date to reflect its original andrevised budgets, and (v) strengthening financial oversightof SOEs through regular performance monitoring andpublication of annual financial audits. The government hasbecome dependent on external assistance for investment,creating problems of planning, coordination and insufficientconsideration of ongoing maintenance costs. A very smallproportion of the investment has benefited ruralelectrification. Reforms of the sector should concentrateon: (a) urgently reducing SOMELEC technical and commerciallosses, (b) reducing reliance on imported fuel oil byinvesting in alternative energy sources and pushing aheadwith the Banda gas to power project, (c) revising SOMELEC’stariff structure, (d) targeting subsidies to mitigate theimpact of revised tariffs on the poor, (v) promoting ruralelectrification, (e) developing electricity networksparticularly in the Senegal River Valley, (f) improvingSOMELEC’s governance and management, and (g) encouragingpublic-private partnerships for investments in new infrastructure.
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