- Mauritania was hit hard by the global crisis, which coincided with an aid freeze due to a coup and an unexpected set-back in the short-lived dream of becoming a major oil nation. Prospects for 2010 are however very positive.
2009 was a horrible year for the Mauritanian economy, numbers presented today by Nouakchott authorities and the International Monetary Fund (IMF) clearly demonstrated. Over all, Mauritania's GDP shrunk by 1.1 percent during last year, mostly due to external shocks.
The August 2008 coup started the vicious circle. The unconstitutional order caused donors to freeze their development aid funding for Mauritania, a country still highly dependent on foreign aid. Also trade relations were severed, with the US suspending Mauritania from its African Growth and Opportunity Act (AGOA) programme of reduced trade barriers during all 2009. As of 1 January 2010, Mauritania again is eligible for AGOA benefits.
But the real shocks to the Mauritanian economy in 2009 were external. Mauritania was one of the African countries most negatively affected by the global economic downturn, through slower activity in the mining, fishing and the construction sectors
The greatest surprise was the sudden setback in Mauritania's new and promising oil industry, in which government and the private sector have invested large sums during the last decade. A commercial oil field was discovered offshore in 2001, and already in 2006, Mauritania became an oil producer. Frequent discoveries of new offshore oil deposits were predicted to propel the 3.3 million nation out of poverty if managed well.
But so far, Mauritanian oil production peaked in 2007 with 75,000 barrels per day. In 2008, production started to dwindle due to unexpected geological structures off the Mauritanian coast. Last year, it dropped to 10,700 barrels a day, and now, predictions for 2010 and 2011 are for a modest production of 7,500 barrels per day. Government's oil revenues, despite a predicted rise, thus started falling in 2008.
Mauritania thus remains a net oil importer, with periods of high oil prices adding to the economic crisis.
Strictly adhering to IMF reform programmes, Mauritania during the last decade had achieved model economic growth and a high standing among foreign donors. With the shocks in 2008-09, government suddenly found itself overspending amidst unexpectedly declining revenues. According to the IF, Mauritania currently has an account deficit of 12.7 percent of GDP, and international reserves only cover about two months of imports.
Nevertheless, the Fund in an analysis presented today is optimistic about 2010, saying the crisis has been overcome. With foreign and trade relations normalised and a global recovery from the financial crisis, authorities and the IMF predict a sound economic growth of 4.6 percent for Mauritania in 2010. In 2011, GDP growth is even predicted at 5.2 percent.
In support of Mauritanian economic reform efforts, the Fund further today announced a three-year assistance programme worth US$ 118 million. Some US$ 16.9 million were immediately available for the Nouakchott government, "with the remainder available in instalments subject to semi-annual reviews," according to an IMF statement.
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