The Economy

The Economy

AT INDEPENDENCE IN 1960, Mauritania embarked on an ambitious but ill-conceived development plan to construct large-scale industrial projects in the mining, energy, and manufacturing sectors. The failure of many of these projects left the nation saddled with one of the largest foreign debt burdens in the world in proportion to the size of its economy. In the late 1980s, Mauritania's economy continued to rely heavily on the earnings derived from the export of iron ore and fish. The economy also remained seriously hampered by a structural inability to feed the country's population. Even in nondrought years, large amounts of food aid were needed to supplement domestic production and commercial food imports.

Until the mid-1980s, iron ore mining was the motor of economic development in Mauritania. Exploitation of rich, highgrade iron ore deposits began in 1963. In the 1960s, mining directly provided almost one-third of the gross domestic product (GDP) and contributed more than 80 percent of the country's export earnings. Mauritania also began mining copper deposits in 1973; the mine closed in 1975, however, because of falling world copper prices. The worldwide recession that caused a fall in demand for copper also affected iron exports. Iron mining stagnated during the later 1970s. By the mid-1980s, the mining sector had lost its predominance in the economy, accounting for between 10 and 11 percent of GDP in fiscal year (FY) 1984, and by 1985 export earnings from mining had fallen to around 40 percent.

The waters off the coast of Mauritania are among the richest fishing grounds in the world. Before 1979, however, the government exercised little control over foreign fishing operations, and Mauritanians took little part in fishing. Fishing and fish processing accounted for less than 5 percent of GDP in 1975, and virtually the only revenues obtained were in the form of royalties on fishing licenses paid by foreign fishing companies to the government. In 1979 Mauritania established its New Fisheries Policy and a 200-nautical-mile exclusive economic zone (EEZ). The industry underwent rapid growth under the new policy, which required foreign operators to form joint ventures with Mauritanian companies and resulted in the development of a national fishing fleet.

Although in 1984 fishing contributed less than 10 percent to GDP at current market prices, the volume of reported fish exports rose rapidly. In 1983 fishing became the number one foreign exchange earner with some 54 percent of export revenues. Fishing, together with mining, employed about 9 percent of the economically active population.

Through the 1970s, agriculture, including herding, continued to deteriorate. Serious droughts combined with economic neglect to cause a severe decline in farm production. Both herding and agriculture were hard hit by the droughts: their combined contributions to GDP dropped from about 40 percent in the 1960s to about 25 percent in 1986.

In the early 1960s, Mauritania produced about half of its grain needs. After dropping to an all-time low of about 3 to 5 percent of its grain needs during the drought years of 1983-85, production rebounded somewhat to about one-third of need in 1986. Although the vast majority of the people remained attached to the traditional agro-pastoral life of the countryside, this life was becoming extremely difficult. Desertification advanced in some areas at a rate of six kilometers per year. Increasingly, refugees from the countryside began to migrate to urban centers such as Nouakchott. With the exception of a few scattered oases, farming was limited to the narrow band along the Senegal River.

As recently as the mid-1970s, only 20 percent of Mauritania's total population were sedentary farmers. Between 1975 and 1980, their contribution to GDP averaged 3 to 5 percent. During the same period, the pastoral herding sector of the economy constituted about 20 percent of GDP and engaged 60 to 70 percent of the total population. Of the states in West Africa, Mauritania had the highest ratio of cattle to people, a ratio of three to one. The livestock-to-crop ratio of GDP also was the highest for West Africa, as animal husbandry contributed four times as much to GDP as did farming.

The cumulative effects of drought and weak demand for Mauritania's iron exports, along with the heavy expenses of the war in the Western Sahara during the mid-1970s, curtailed the rapid growth of the 1960s that had been marked by an average rise in GDP of 8 percent a year. During the late 1970s and the 1980s, the economy stagnated, and financial instability supplanted an earlier ability to meet foreign debt obligations. From 1974 to 1984, GDP growth averaged 2.3 percent, barely keeping pace with population growth. In 1986 GDP per capita income was estimated at US$410, no higher in real terms than a decade earlier, placing Mauritania at the lower end of low- to middle-income developing countries. Real per capita income for the vast majority of the population outside the small modern sector was much lower, estimated in the range of US$100 to US$150 per year.

ROLE OF THE GOVERNMENT
FISHING
MINING
THE RURAL ECONOMY
INDUSTRY
BANKING

https://en.wikipedia.org/wiki/Mauritania
https://en.wikipedia.org/wiki/History_of_Mauritania


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