Economy of Mauritania
Encyclopedia
A majority of the population of Mauritania
depends on agriculture
and livestock
for a livelihood, even though most of the nomads and many subsistence farmers were forced into the cities by recurrent droughts in the 1970s and 1980s. Mauritania has extensive deposits of iron
ore, which account for almost 50% of total exports. The decline in world demand for this ore, however, has led to cutbacks in production. With the current rise in metal prices, gold and copper mining companies are opening mines in the interior. The nation's coastal waters are among the richest fishing areas in the world, but overexploitation
by foreigners threatens this key source of revenue. The country's first deep water port opened near Nouakchott
in 1986. In recent years, drought and economic mismanagement have resulted in a buildup of foreign debt. In March 1999, the government signed an agreement with a joint World Bank
-International Monetary Fund
mission on a $54 million enhanced structural adjustment facility
(ESAF). The economic objectives have been set for 1999-2002. Privatization remains one of the key issues.
Current GDP per capita of Mauritania grew 82% in the Sixties reaching a peak growth of 166% in the Seventies. But this proved unsustainable and growth consequently scaled back to 14% in the Eighties. Finally, it shrank by 29% in the Nineties. Mean wages were $0.97 per manhour in 2009.
, an Australia
n company. In 2004, Woodside had agreed to invest $US 600 million in developing Mauritania's Chinguetti offshore oil project. The controversial amendments, which Mauritanian authorities declared had been signed "outside the legal framework of normal practice, to the great detriment of our country", could cost Mauritania up to $200 million a year, according to BBC News
. Signed by Woodside two weeks after the February 1, 2005 legislation authorizing the four amendments, they provided for a lower state quota in the profit-oil, and reduced taxes by 15 percent in certain zones. They also eased environmental
constraints, and extended the length and scope of the exploitation and exploration monopoly
, among other measures.
The disputed amendments were signed by former oil minister Zeidane Ould Hmeida
in February 2004 and March 2005. Hmeida was arrested in January 2006 on charges of "serious crimes against the country's essential economic interests".
Nouakchott's authorities declared that the government would likely seek international arbitration, which Woodside (which operated for Hardman
, BG Group
, Premier Oil
, ROC Oil, Fusion, Petronas
, Dana Petroleum
, Energy Africa and the Hydrocarbons Mauritanian Society) also contemplated.
Discovered in 2001, Chinguetti has proven reserves of about 120000000 barrels (19,078,475,400 l) of oil. At the end of December 2005, authorities estimated that in 2006, the oil profits would be 47 billion ouguiyas (about US$180 million) and represent a quarter of the state budget, according to RFI.
The Australian Federal Police are investigating Woodside for allegations of bribery and corruption in Mauritania (according to the Sydney Morning Herald ).
Some U.S. oil companies are alleged to be playing a part in Mauritania's oil related corruption.
Mauritania
Mauritania is a country in the Maghreb and West Africa. It is bordered by the Atlantic Ocean in the west, by Western Sahara in the north, by Algeria in the northeast, by Mali in the east and southeast, and by Senegal in the southwest...
depends on agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
and livestock
Livestock
Livestock refers to one or more domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. The term "livestock" as used in this article does not include poultry or farmed fish; however the inclusion of these, especially poultry, within the meaning...
for a livelihood, even though most of the nomads and many subsistence farmers were forced into the cities by recurrent droughts in the 1970s and 1980s. Mauritania has extensive deposits of iron
Iron
Iron is a chemical element with the symbol Fe and atomic number 26. It is a metal in the first transition series. It is the most common element forming the planet Earth as a whole, forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust...
ore, which account for almost 50% of total exports. The decline in world demand for this ore, however, has led to cutbacks in production. With the current rise in metal prices, gold and copper mining companies are opening mines in the interior. The nation's coastal waters are among the richest fishing areas in the world, but overexploitation
Overexploitation
Overexploitation, also called overharvesting, refers to harvesting a renewable resource to the point of diminishing returns. Sustained overexploitation can lead to the destruction of the resource...
by foreigners threatens this key source of revenue. The country's first deep water port opened near Nouakchott
Nouakchott
-Government:The town was first divided into districts in 1973. First it was divided into four. From 1986, the city has been split into nine districts.* Arafat* Dar Naim* El Mina* Ksar* Riad* Sebkha* Tevragh-Zeina* Teyarett* Toujounine...
in 1986. In recent years, drought and economic mismanagement have resulted in a buildup of foreign debt. In March 1999, the government signed an agreement with a joint World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
-International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
mission on a $54 million enhanced structural adjustment facility
Enhanced structural adjustment facility
The Enhanced Structural Adjustment Facility was a program of financial assistance given to poor countries from December 1987 through 1999 through the International Monetary Fund...
(ESAF). The economic objectives have been set for 1999-2002. Privatization remains one of the key issues.
Macro-economic trend
This is a chart of trend of gross domestic product of Mauritania at market prices estimated by the International Monetary Fund with figures in millions of Mauritanian Ougulyas.| Year | Gross Domestic Product | US Dollar Exchange | Inflation Index (2000=100) |
|---|---|---|---|
| 1980 | 37,211 | 45.93 Ouguiyas | 23 |
| 1985 | 60,197 | 77.07 Ouguiyas | 36 |
| 1990 | 97,819 | 80.64 Ouguiyas | 52 |
| 1995 | 158,443 | 129.76 Ouguiyas | 73 |
| 2000 | 258,245 | 240.00 Ouguiyas | 100 |
| 2005 | 514,642 | 265.55 Ouguiyas | 144 |
Current GDP per capita of Mauritania grew 82% in the Sixties reaching a peak growth of 166% in the Seventies. But this proved unsustainable and growth consequently scaled back to 14% in the Eighties. Finally, it shrank by 29% in the Nineties. Mean wages were $0.97 per manhour in 2009.
Diversification
In 2007, mining industries accounted for well over 35 per cent of the Mauritanian economy, with the fish industry so much as 54% (with big changes between these industries in the power relationship). Diversification of the economy into non-mining industries remains a long-term issue. Mauritania is a net importer of food, reportedly importing 70% of its domestic food needs.Dispute with Woodside Petroleum
In February 2006, the Mauritanian government denounced amendments to an oil contract made by former leader Maaouiya Ould Taya with Woodside PetroleumWoodside Petroleum
Woodside Petroleum Limited is an Australian petroleum exploration and production company. It is a public company listed on the Australian Securities Exchange and has its headquarters in Perth, Western Australia.-History:...
, an Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
n company. In 2004, Woodside had agreed to invest $US 600 million in developing Mauritania's Chinguetti offshore oil project. The controversial amendments, which Mauritanian authorities declared had been signed "outside the legal framework of normal practice, to the great detriment of our country", could cost Mauritania up to $200 million a year, according to BBC News
BBC News
BBC News is the department of the British Broadcasting Corporation responsible for the gathering and broadcasting of news and current affairs. The department is the world's largest broadcast news organisation and generates about 120 hours of radio and television output each day, as well as online...
. Signed by Woodside two weeks after the February 1, 2005 legislation authorizing the four amendments, they provided for a lower state quota in the profit-oil, and reduced taxes by 15 percent in certain zones. They also eased environmental
Environmental policy
Environmental policy is any [course of] action deliberately taken [or not taken] to manage human activities with a view to prevent, reduce, or mitigate harmful effects on nature and natural resources, and ensuring that man-made changes to the environment do not have harmful effects on...
constraints, and extended the length and scope of the exploitation and exploration monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
, among other measures.
The disputed amendments were signed by former oil minister Zeidane Ould Hmeida
Zeidane Ould Hmeida
Zeidane Ould Hmeida is a former politician in Mauritania. During the presidency of Maaouya Ould Sid'Ahmed Taya, Hmeida was appointed as Minister of Industry and Mines on November 4, 2001, with his responsibilities including oil; he was then appointed as Minister of Oil and Energy, a new portfolio,...
in February 2004 and March 2005. Hmeida was arrested in January 2006 on charges of "serious crimes against the country's essential economic interests".
Nouakchott's authorities declared that the government would likely seek international arbitration, which Woodside (which operated for Hardman
Hardman
Hardman may refer to:People* Ben Hardman, Australian politician* Bill Hardman, American jazz trumpeter* Brian Hardman, New Zealand soccer player* Cedrick Hardman, American football player* Chris Hardman, English singer-songwriter...
, BG Group
BG Group
BG Group plc is a global oil and gas company headquartered in Reading, United Kingdom. It has operations in 25 countries across Africa, Asia, Australasia, Europe, North America and South America and produces around 680,000 barrels of oil equivalent per day. It has a major Liquefied Natural Gas ...
, Premier Oil
Premier Oil
Premier Oil plc is an independent British UK oil company with gas and oil interests in the UK, Asia and Africa. It is devoted entirely to the 'upstream' sector of the industry - the exploitation of oil and gas - as opposed to the 'downstream' refining and retail sector...
, ROC Oil, Fusion, Petronas
Petronas
PETRONAS, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company that was founded on August 17, 1974. Wholly owned by the Government of Malaysia, the corporation is vested with the entire oil and gas resources in Malaysia and is entrusted with the responsibility of developing and...
, Dana Petroleum
Dana Petroleum
Dana Petroleum is a Korean-owned, British-based oil and gas exploration and production company. Its activities are focused on the North Sea and Africa. It is headquartered in Aberdeen and is a former constituent of the FTSE 250 Index.-History:...
, Energy Africa and the Hydrocarbons Mauritanian Society) also contemplated.
Discovered in 2001, Chinguetti has proven reserves of about 120000000 barrels (19,078,475,400 l) of oil. At the end of December 2005, authorities estimated that in 2006, the oil profits would be 47 billion ouguiyas (about US$180 million) and represent a quarter of the state budget, according to RFI.
The Australian Federal Police are investigating Woodside for allegations of bribery and corruption in Mauritania (according to the Sydney Morning Herald ).
Some U.S. oil companies are alleged to be playing a part in Mauritania's oil related corruption.