Report No. 53241-MR Mauritania: Restarting the Reform Program Sector Policy Notes May 2010 AFTP4 Africa Region World Bank Report Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
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Report No. 53241-MR
Mauritania: Restarting the Reform Program
Sector Policy Notes
May 2010
AFTP4 Africa Region
World Bank Report
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EXCHANGE RATES
(as of April 16, 2010)
United States Dollar = Mauritanian Ouguiya
USD 1 = MRO 261
FINANCIAL YEAR
January 1–December 31
TABLES OF ABBREVIATIONS AND ACRONYMS
AAAID Arab Authority Cooperation Accord for Agricultural Investment and Development
(Accord de Coopération avec l’Autorité Arabe pour les Investissements et le
Développement Agricoles)
ADER Rural Electrification Development Agency (Agence pour le Développement de
l'Electrification Rurale)
AEP Agricultural Economics Program
AFD French Development Agency (Agence Française de Développement)
AfDB African Development Bank
AFRITAC African Regional Technical Assistance Center
AIDS Auto-immune Deficiency Syndrome
AMEXTIPE Mauritanian Agency for the Implementation of Employment-related Public Works
(Agence Mauritanienne d'Exécution des Travaux d'Intérêt Public pour l'Emploi)
ANAPEJ National Agency for the Promotion of Youth Employment (Agence Nationale de
Promotion d’Emploi des Jeunes)
ANEPA National Safe Drinking Water and Sanitation Agency (Agence Nationale d’Eau Potable
et d’Assainissement)
AOP Annual Operational Plan
APAUS Agency for the Promotion of Universal Access to Basic Services (Agence pour la
Promotion de l’Accès Universel aux Services)
ARE Economic Regulation Authority (Agence de Régulation Economique)
PRECASP Public Sector Capacity Reinforcement Project (Projet pour le Renforcement des
Capacités du Secteur Public)
PRISM Mining Sector Institutional Strengthening Project (Projet de Renforcement Institutionnel
du Secteur Minier)
PRSP Poverty Reduction Strategy Paper
PST Transportation Sector Plan (Plan Sectoriel de Transport)
RACHAD Expenditure Chain Automated System (Réseau Automatisé de la Chaîne des Dépenses)
RESEN State Report on the National Educational System (Rapport d'Etat sur le Système Educatif
National)
RGPH General Population and Habitat Census (Recensement Général de la Population et de
l'Habitat)
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SAE Environmental Affairs Department (Service des Affaires Environnementales)
SAMIA Arab Mining and Metallurgy Company (Société Arabe des Mines et des Industries
Metallurgies)
SAMMA Mauritanian Unloading and Handling Corporation (Société d’Anconage et de
Manutention en Mauritanie)
SDSR Rural Development Strategy (Stratégie de Développement du Secteur Rural)
SIGE Environmental and Geological Information Service (Service d'Information Géologique et
Environnementale)
SIGM Mining Information and Management Service (Service d'Information et de Gestion
Minière)
SMCP Mauritanian Fishing Commercialization Organization (Société Mauritanienne de
Commercialisation de la Pêche)
SME Small and Medium Enterprise
SMH Mauritanian Hydrocarbons Agency (Société Mauritanienne des Hydrocarbures)
SNAAT National Agriculture Planning and Works Agency (Société Nationale d'Aménagement
Agricole et des Travaux)
SNDE National Water Utility (Société Nationale de l'Eau)
SNFP National Drilling Company (Société nationale de forages et de puits)
SNIM National Industrial and Mining Company (Société Nationale des Industries Minières)
SNIS National Health Information System (Système National d’Information Sanitaire)
SOMELEC Mauritanian Electricity Company (Société Mauritanienne d'Electricité)
SOMIR Mauritanian Refining Company (Société Mauritanienne des Industries de Raffinage)
SONADER National Rural Development Agency (Société Nationale pour le Développement Rural)
SPO Socio-professional Organization
SRH Regional Water Services (Services Régionaux de l’Hydraulique)
STD Sexually Transmitted Disease
TFP Technical and Financial Partners
TIQ Transferrable Individual Quota
TML Tasiast Mauritanie Limited
TNS National Enrollment Rate (Taux National de Scolarisation)
TOR Terms of Reference
TPT Technical and Professional Training (Formation Technique et Professionelle)
UAE United Arab Emirates
UBS Union Bank of Switzerland
UNCACEM National Agricultural Credit Union Network (Union Nationale des Coopératives
Agricoles de Crédit et d'Epargne de Mauritanie)
UNCTAD United Nations Conference on Trade and Development
UNDP United Nations Development Program
UNESCO United Nations Educational, Scientific, and Cultural Organization
UNFPA United Nations Population Fund
UNICEF United Nations Children's Fund
UNIDO United Nations Industrial Development Organization
USD United States Dollar
USGS United States Geological Survey
WAEMU West African Economic and Monetary Union
WFP World Food Program
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Vice-President: Obiageli K. Ezekwesili (AFRVP)
Country Director: Madani Tall (AFCF1)
Sector Director: Sudhir Shetty (AFTPM)
Interim Sector Manager: Philip English (AFTP4)
Team Leaders: Manuela Francisco and Philip English (AFTP4)
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TABLE OF CONTENTS
PREFACE ............................................................................................................................................................... XI
EXECUTIVE SUMMARY: ........................................................................................................................................ XII
PART I: STRENGTHENING PUBLIC INSTITUTIONS .................................................................................................... 1
1. PUBLIC FINANCE MANAGEMENT ....................................................................................................................... 1
A. CONTEXT .................................................................................................................................................................. 1 B. MAJOR CONSTRAINTS .................................................................................................................................................. 3 C. RECOMMENDATIONS ................................................................................................................................................... 8 D. CHALLENGES TO IMPLEMENTATION .............................................................................................................................. 11 E. ANALYTICAL GAPS ..................................................................................................................................................... 12
2. CIVIL SERVICE ................................................................................................................................................... 13
A. CONTEXT ................................................................................................................................................................ 13 B. MAJOR CONSTRAINTS ................................................................................................................................................ 13 C. RECOMMENDATIONS ................................................................................................................................................. 15 D. CHALLENGES TO IMPLEMENTATION .............................................................................................................................. 16 E. ANALYTICAL GAPS ..................................................................................................................................................... 16
PART II: IMPROVING THE FACTORS OF PRODUCTION: HUMAN CAPITAL ............................................................. 18
A. CONTEXT ................................................................................................................................................................ 18 B. MAIN CONSTRAINTS .................................................................................................................................................. 20 C. RECOMMENDATIONS ................................................................................................................................................. 22 D. CHALLENGES TO IMPLEMENTATION .............................................................................................................................. 25 E. ANALYTICAL GAPS ..................................................................................................................................................... 25
A. CONTEXT ................................................................................................................................................................ 26 B. MAJOR CONSTRAINTS ................................................................................................................................................ 27 C. RECOMMENDATIONS ................................................................................................................................................. 29 D. CHALLENGES TO IMPLEMENTATION .............................................................................................................................. 30 E. ANALYTICAL GAPS ..................................................................................................................................................... 30
5. PROFESSIONAL TRAINING ................................................................................................................................ 31
A. CONTEXT ................................................................................................................................................................ 31 B. MAJOR CONSTRAINTS ................................................................................................................................................ 31 C. RECOMMENDATIONS ................................................................................................................................................. 33 F. CHALLENGES TO IMPLEMENTATION ............................................................................................................................... 35 G. ANALYTICAL GAPS ..................................................................................................................................................... 35
6. LABOR REGULATIONS AND SOCIAL WELFARE .................................................................................................. 37
A. CONTEXT ................................................................................................................................................................ 37 B. MAJOR CONSTRAINTS ................................................................................................................................................ 37 C. RECOMMENDATIONS ................................................................................................................................................. 38 D. CHALLENGES TO IMPLEMENTATION .............................................................................................................................. 39
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7. HEALTH ............................................................................................................................................................ 41
A. OVERVIEW .............................................................................................................................................................. 41 B. MAJOR CONSTRAINTS ................................................................................................................................................ 44 C. RECOMMENDATIONS ................................................................................................................................................. 47 D. CHALLENGES TO IMPLEMENTATION .............................................................................................................................. 50 E. ANALYTICAL GAPS ..................................................................................................................................................... 50
8. WATER AND SANITATION ................................................................................................................................ 51
A. OVERVIEW .............................................................................................................................................................. 51 B. CHALLENGES TO IMPLEMENTATION .............................................................................................................................. 62 C. RECOMMENDATIONS ................................................................................................................................................. 63 D. ANALYTICAL GAPS .................................................................................................................................................... 64
PART III: IMPROVING THE FACTORS OF PRODUCTION: INFRASTRUCTURE ........................................................... 65
A. CONTEXT ................................................................................................................................................................ 65 B. MAJOR CONSTRAINTS ................................................................................................................................................ 66 C. RECOMMENDATIONS ................................................................................................................................................. 69 D. CHALLENGES TO IMPLEMENTATION .............................................................................................................................. 72 E. ANALYTICAL GAPS ..................................................................................................................................................... 72
10. ROAD AND MARITIME TRANSPORTATION ..................................................................................................... 75
A. CONTEXT ................................................................................................................................................................ 75 B. MAJOR CONSTRAINTS ................................................................................................................................................ 76 C. RECOMMENDATIONS ................................................................................................................................................. 78 D. CHALLENGES TO IMPLEMENTATION .............................................................................................................................. 79 E. ANALYTICAL GAPS ..................................................................................................................................................... 80
PART IV: DEVELOPMENT OF THE PRIVATE SECTOR AND GROWTH SECTORS ........................................................ 81
11. THE INVESTMENT CLIMATE ............................................................................................................................ 81
A. CONTEXT ................................................................................................................................................................ 81 B. MAJOR CONSTRAINTS ................................................................................................................................................ 82 C. RECOMMENDATIONS ................................................................................................................................................. 88 D. CHALLENGES TO IMPLEMENTATION .............................................................................................................................. 91 E. ANALYTICAL GAPS ..................................................................................................................................................... 91
12. RURAL DEVELOPMENT ................................................................................................................................... 93
A. CONTEXT ................................................................................................................................................................ 93 B. MAJOR CONSTRAINTS ................................................................................................................................................ 95 C. RECOMMENDATIONS ............................................................................................................................................... 100 D. CHALLENGES TO IMPLEMENTATION ............................................................................................................................ 103 E. ANALYTICAL GAPS ................................................................................................................................................... 105
A. CONTEXT .............................................................................................................................................................. 107 B. MAJOR CONSTRAINTS .............................................................................................................................................. 108 C. RECOMMENDATIONS ............................................................................................................................................... 112 D. CHALLENGES TO IMPLEMENTATION ............................................................................................................................ 112 E. ANALYTICAL GAPS ................................................................................................................................................... 113
14. THE MINING SECTOR .................................................................................................................................... 114
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A. CONTEXT .............................................................................................................................................................. 114 B. MAJOR CONSTRAINTS .............................................................................................................................................. 117 C. RECOMMENDATIONS ............................................................................................................................................... 118 D. CHALLENGES TO IMPLEMENTATION ............................................................................................................................ 119 E. ANALYTICAL GAPS ................................................................................................................................................... 120
A. OVERVIEW ............................................................................................................................................................. 121 B. MAJOR CONSTRAINTS .............................................................................................................................................. 123 C. RECOMMENDATIONS ............................................................................................................................................... 124 D. CHALLENGES TO IMPLEMENTATION ............................................................................................................................ 125 E. ANALYTICAL GAPS ................................................................................................................................................... 125
Tables
TABLE 2.1: COMPARISON BETWEEN PAYROLL AND PERSONNEL FILES ....................................................................... 14
TABLE 7.1: HEALTH AND SOCIOECONOMIC INDICATORS ............................................................................................ 42
Annexes
ANNEX 1: MAURITANIAN FINANCIAL SECTOR ASSESSMENT PROGRAM ................................................................... 126
ANNEX 2: FISHERIES – SUMMARY OF KEY ACTIONS PROPOSED OVER THE NEXT FIVE YEARS .................................. 129
ANNEX 3: 2010-2012 THREE-YEAR ACTION PLAN FOR THE MINING SECTOR ........................................................... 131
This document has a restricted distribution and may be used by recipients only in the performance of
their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
xi
PREFACE
World Bank support to the preparation of these sector policy notes is part of the recommitment
process that followed the July 2009 presidential election. The Mauritanian authorities'
appreciation of the the World Bank's proposal led to its adoption and extension to other sectors.
Primarily as a result of ties that developed between the various technical committees during the
process that began under United Nations supervision, other technical and financial partners
quickly decided to participate in it. The number of notes thus increased from seven to 15,
including some for sectors in which the World Bank lacks extensive experience in Mauritania.
The preparation process for these policy notes has evolved over time. Drafts prepared by the
World Bank were taken up by the Mauritanian authorities and distributed to the ministries
concerned. While in some cases the substance of the sector notes was retained (with
modifications), in others the ministries concerned chose to redraft the documents. In some cases,
another partner conducted the drafting and writing process, particularly in the water and
sanitation sectors, to which the French Development Agency (AFD) contributed. An iterative
process has now been launched to find a consensus between the Mauritanian authorities, the
World Bank, and the country's technical and financial partners.
This collaboration has resulted in a more extensive and more appropriate report being made
available to the authorities. Prior to its being finalized and validated, it became apparent that the
policies of the Mauritanian government were already being influenced by this document.
Obviously, we are delighted. Furthermore, the recommendations contained in this report are
more numerous and less focused than initially planned, with only a few important issues not
being fully addressed. While the recommendations contained in the report form an excellent
basis for dialogue between the Mauritanian authorities and the country's partners, they will no
doubt be refined in the course of a validation workshop, the preparation of the new poverty
reduction strategy, and the subsequent process of program and project definition.
We would like to thank the Minister for Economic Affairs and Development, Mr. Sidi Ould Tah
and his Director of Policies and Strategies, Mr. Mohamed Ould Djié for the orientations they
gave to this reflection process and for the quality of their collaboration with the World Bank. We
would also like to thank all the members of the Mauritanian public administration services who
contributed to writing these notes for the quality of their work and for their commitment. Support
from development partners also made a significant contribution to the success of the process.
These include the UNDP and other United Nations agencies based in Nouakchott, the European
Commission, the IMF, and the French, Italian, German, and Spanish development aid agencies.
Finally, the authors would also like to thank all their World Bank colleagues in Mauritania for
their tremendous teamwork.
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EXECUTIVE SUMMARY:
Principal challenges to economic growth in Mauritania
1. Even though Mauritania’s real GDP recorded an average growth rate of 4%
between 2005 and 2009, the country’s economic growth remains unstable and vulnerable to
external shocks. At the same time, the distribution of profits through benefit sharing
continues to be very unequal. Growth is dependent on a few raw materials (oil, ore, and fish)
and development assistance, with very limited processing activity. Due in part to the availability
of income or resource rent generated by the exploitation of these raw materials, other sectors
have been neglected, especially agriculture, cattle farming, and the urban private sector in
general. The impact of this resource rent on the exchange rate and the high cost of living also
contributes to making other sectors uncompetitive. Yet, these are the sectors in which most of the
population is trying to make a living. The country’s development is therefore distorted, with
persistent poverty, even though poverty has been reduced from 47% in 2004 to 42% in 2008,
representing an annual fall of about 1.2 percentage points.
2. Since Mauritania’s independence in November 28, 1960, it has experienced several
periods of political and institutional instability that have strongly hampered its economic
and social development. The country has had no fewer than seven military coups since the fall
of the first civilian Mauritanian President in July 1978. Between 2005 and 2007, an initial
transition period put an end to the 21-year rule of Maaouya Ould Sid Ahmed Taya and opened
the door to legislative and presidential elections, which resulted in Sidi Ould Cheikh Abdallahi
becoming the country's President. After a year and a half in power, he was ousted in August
2008 in a military coup. The High Council of State then appointed General Mohamed Ould
Abdel Aziz as Head of State. Following a one-year-long political crisis, General Mohamed Ould
Abdel Aziz won the July 18, 2009 presidential election, which followed consensus being reached
among the divergent political opinions that had agreed to sign the Dakar agreement.
3. The management of a rent-based economy creates huge challenges. The public
finances must be managed efficiently to promote diversification, share wealth more equitably,
and fight transparently against the corruption that often accompanies resource rent. In addition,
resources must be used to stimulate the rural sector, where the majority of poor people operate,
and invested in human resources in order to improve their competitiveness. At the same time, the
business climate must be sanitized and infrastructure improved to promote investment and thus
create employment. The strengthening of institutions thus becomes critical, especially in order to
control abuse.
4. The impact of the recent economic and financial crisis on global demand and
particularly on the price of iron and copper in addition to the reduction in oil production
highlight the urgent need to identify new income generating sectors other than the
traditional exploitation of natural resources. The direct impacts of the global crisis have been
limited in Mauritania because the country is barely integrated in the international financial
system. However, the low price of raw materials, political instability, the reduction in foreign
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aid, and the fall in oil production1 were contributing factors in the decline in real GDP growth in
2009 (-1%, compared with 3.7% in 2008, 1% in 2007, and 11.4% in 2006). At the same time,
prospects for income from oil are not encouraging. It is anticipated that the export of gold will
overtake that of oil until 2012 (with an average share of GDP of 7.2% and 5.2%, respectively, for
the period 2010-2012). New mining projects2 could help strengthen the economy but these would
not be adequate on their own. The diversification of the economy should reduce vulnerability to
outside shocks, create a favorable environment for growth, reduce the impact of price volatility
for oil and iron ore, and create employment.
5. In general, the economic crisis and political instability have delayed critical reforms
crucial to the development of a strong productive environment. In particular, the
implementation of economic reforms in the financial sector and the business environment as well
as the strengthening of governance have been delayed. This has slowed improvements in the
competitiveness of the private sector and strengthened over-dependence on income from the
exploitation of natural resources. With a very small and fragmented market and a limited
manufacturing sector, the domination of a few large business groups has slowed the emergence
of small and medium enterprises (SMEs). This is why trade, transport, communications, and
other services are the only sectors – excluding mining and oil – that have contributed to growth
over the past twenty years (with an average of 10.7%, 4.9%, and 11% of GDP, respectively, over
the period 1991-2008). Meanwhile, agriculture (excluding cattle farming) has accounted for only
a modest part of GDP (3.7% on average for the period 1991-2008). Despite its significant
contribution to growth in the early 1990s, industrial fishing has fallen back because of the age of
the national fleet and increased competition from foreign fisheries. Meanwhile, manufacturing
has not yet managed to position itself as an engine of growth.
Options for Policies Aimed at Accelerating Economic Diversity
6. After the presidential elections of July 2009, the government of Mauritania
launched a program of reforms aimed at accelerating economic growth by improving the
institutional framework to reduce the constraints on private sector development. The
viability of growth in Mauritania remains strongly tied to the country’s competitiveness and to
the diversification of its industrial fabric, particularly through value-added activities. Even
though some progress has been achieved in social sectors such as education and health, only an
ambitious program of reforms aimed at improving public institutions, the yield of production
factors including human and financial capital and infrastructure, the investment climate, and
support programs for future development sectors will speed up economic growth, promote
employment, and improve social indicators.
7. With this in mind, the Government has prepared notes on sector policy in order to
promote a consensus over the priority actions to be undertaken in 15 critical areas.
Developed with the support of the World Bank and other technical and financial partners, these
1 Oil reserves have been estimated at 310 million barrels. It is anticipated that oil production will stabilize at about
75,000 barrels per day (b/d) and cease after 15 years. Unforeseen geological problems have reduced the volume
extracted from the oldest deposit to only 36,000 b/d in 2006 and to 10,700 b/d in 2009, far less than was previously
predicted. 2
For example, the Guelb II project aims to increase iron production to 11 million tons in 2009 and to 13.5 million
tons in 2013. The financing for this project is now in place.
xiv
notes set out the state of affairs in each area, identify the main challenges and constraints,
determine objectives and strategic directions, and identify short- and medium-term reforms. This
process will facilitate the preparation of a new Strategic Framework for Fighting Poverty (SFFP)
for the period 2011-2015 and the World Bank’s future Strategic Aid to Mauritania. The priority
reforms identified in these notes will also be part of the dialogue between the Mauritanian
Government and the World Bank, the IMF, and the country's other technical and financial
partners.
Crosscutting Issues
An examination of sector policy notes reveals a number of crosscutting issues that remain a
hindrance to many emerging sectors.
8. Progress is often not about identifying but rather about implementing what needs to
be done. Many recommendations in the sector notes in effect reflect proposals that have been
made for some time. In many cases, even though significant financial and technical assistance (in
the area of privatization, for example) was provided, project implementation was weak and did
not lead to expected results. This reflects the difficulties associated with current economic
policies, on the basis of which the unbridled pursuit of income-maximizing activities coupled
with the weight of economic interest groups constitutes a hindrance to deployed efforts. Future
efforts toward reform should therefore attend to the current economic policy context and
concentrate on sectors that offer reasonable chances that projects will be successfully
implemented by taking into account the interests of all and by building partnerships suitable for
these reforms.
9. In addition to economic policy constraints, many sector policy notes highlight the
lack of capacity as a severe constraint on reform implementation. In the policy note on the
public sector, for example, there are significant recommendations for capacity building in the
public service. Generally, however, it is important to focus future capacity building and technical
assistance efforts on areas where current economic policies are conducive to reform.
10. Given that the public sector is lacking in financial and human resources, it is
important that its scope of activities be reviewed and that areas in which it can play a role
be identified. For example, although the public sector currently manages commercial activities,
the private sector may be more efficient in playing that role. Similarly, the private sector could
be involved in providing infrastructure services, particularly in the energy sector. In many
countries, the private sector is already playing a crucial role in providing services in the
education, health, and water sectors. This ensures that the public sector intervenes only where its
role is clearly justified. Among the advantages offered by such an approach are improvements in
public service delivery, more room to maneuver in the financing of basic government activities,
and a positive impact on the development of Mauritania’s highly dynamic private sector.
11. Poor decentralization of public services constitutes a significant obstacle to their
effective operation. This is the case in social sectors as well as in infrastructure and local
investment. Bringing services closer to those concerned would allow for greater public service
accountability as well as increased adaptation. Meanwhile, it is obvious that any successful
decentralization process requires deep political commitment. Similarly, significant efforts will
xv
need to be made to ensure that adequate capacity and suitable accountability mechanisms are set
up locally.
12. As regards infrastructure, the lack of adequate financing for maintenance is a
serious handicap. This results in the rapid deterioration of equipment and increased costs for the
rehabilitation of infrastructure. In this respect priority should be given to maintenance costs
during budget planning and implementation by paying sufficient attention to the recurring costs
related to investments.
13. The obsolete nature of the legal and regulatory framework in Mauritania is a
catalyst for informal practices, corruption, and inefficiency. Better governance therefore
primarily depends on a fundamental revision of this framework.
14. Finally, many sector policy notes emphasize the need to give special attention to
issues relating gender and young people. As in many other countries in the region,
Mauritania’s long-term development and continued social stability clearly depend on education
and job creation for young people.
Strengthening Public Institutions
15. Improving public institutions requires better management of public finances and a
modernized and better organized civil service. In particular, the management of public
finances currently suffers from specific malfunctions requiring improvement in budget
preparation and execution, human resources management, and monitoring and auditing. Budget
preparation is carried out on a short term basis without a multi-annual approach and no
objectives assigned to specific government programs. Despite some efforts being made to
implement a medium term budget framework for the period 2008-2010, this was not carried out
for 2008-2009 because of a lack of capacity in the technical ministries involved. The redrafting
of legislative and regulatory texts, the training of personnel in institutions responsible for budget
preparation, and the improvement of human resources remain essential. Budget execution suffers
from too many derogations, which should remain strictly limited, and from inadequate
monitoring at the decentralized level. The devolution of purchasing procedures and financial
control should be accompanied by the strengthening of audits and inspections, including the
publication of reports. Procurement procedures should be reviewed in depth to increase
transparency and insure separation between bodies responsible for tendering and those
responsible for monitoring and regulation. Furthermore, good governance also requires an Audit
Office staffed with specialized personnel to ensure the regular publication of reports.
16. The civil service currently suffers from organizational dysfunction. Staffing levels
are quite high. Various problems weigh on personnel management, recruitment, staff
remuneration, training, career management, and working conditions. Despite efforts made over
recent years, the lack of a management planning policy for staff entails a lack of control over
staff and future requirements. Thus, while Mauritania has about the same number of civil
servants as Benin, the population of the latter is more than twice that of the former. The total
payroll/GDP ratio also confirms the excessive number of civil servants in Mauritania. Human
resources management, in particular, suffers from problems linked to the lack of knowledge on
the part of the public service regarding legislation and procedures governing State personnel,
mediocre staff management at the ministerial level, the lack of monitoring of attendance at work,
xvi
instability in personnel responsible for the management of human resources, and low salaries.
Other dysfunctions are linked to the general status of the civil service, whose function is
compromised by informal procedures and unclear responsibilities. Corruption in the civil service
is also an obstacle to fair access to public services. Priority actions should lie principally in: i)
completing a census of staff; ii) implementing a more flexible system for managing human
resources based on management focused on results; iii) promoting good governance and fighting
corruption; iv) revitalizing the National School of Public Administration; v) adapting training
programs to the needs of administrative services, and vi) management planning for staff.
Improving Production Factors: Human Capital and Infrastructure
Human Capital
17. Overall, the strengthening of human capital is fundamental to the sustainability of a
qualified workforce. However, the Mauritanian educational system continues to perform
poorly in terms of retention, quality, and efficiency. The situation arises from a series of
internal structural problems at the level of pre-school, basic education, general secondary
education, and technical and vocational training as well as from external factors. Despite an
improvement in quantitative indicators such as the enrollment rate in schools over the past
decade, qualitative indicators for education remain poor. The student retention rate and the
knowledge acquisition rate in primary education are both low. Teacher training is inadequate,
teacher motivation is poor, and the distribution of teachers across regions is uneven. In addition,
there is almost no bilingual staff, and infrastructure is inadequate. There is also a lack of teachers
capable of meeting requirements at the basic, secondary, and higher education levels.
Accordingly, to remedy these constraints, it is necessary to target the strengthening of human
resources (quality and motivation of teachers, quality of training, strict compliance with school
hours) and infrastructure (refurbishment of schools, completion of unfinished schools, provision
of teaching materials). However, training must also be better adapted to needs. At the pre-school
level and in basic education, improving access to education and the quality of that education as
well as the restructuring of the provision of education should also be prioritized. Finally, the
restructuring of secondary education should diversify its syllabus and strengthen the teaching of
science.
18. Employment and vocational training are closely linked in that recent economic
growth has not generated enough jobs while the inadequacy of professional training
relative to the requirements of the national market has increased the number of
unemployed. The employment situation is very worrying, with a high unemployment rate
(31.2%)3 that particularly affects women and the young, as shown by the 2008 survey on
household standard of living (EPCV). Since the capacity of the Mauritanian economy to create
jobs is not sufficient to absorb increased demand, a significant portion of the population works in
the notoriously precarious informal sector. In addition, the level of training and professional
qualification of the active population remains low. In general, public policy has long ignored
employment as a priority development objective, which explains, among other things, the
absence of structured public dialogue, the low level of financing for employment programs, and
the lack of an information system on employment. The main strands of a policy promoting
3 Slightly lower than estimated in 2004 (32.5%).
xvii
employment should consist of: i) the implementation of public programs for creating
employment; ii) the revitalization of assistance for job seekers and for placing job seekers in
employment; and iii) the promotion of SMEs through microfinance.
19. At the technical and vocational training level, the challenges are enormous
especially in view of the number of young people who leave the education system every year
and could be candidates for vocational training. Responding to this situation requires: i)
improving careers advice, better governance of vocational training, and strengthening
management capabilities to achieve results; ii) mobilizing financing resources; iii) improving the
quality of training including creating a structure for training trainers; and iv) extending and
diversifying training opportunities by creating new institutions providing short-term training
adapted to local realities in unrepresented sectors and in the regions.
20. The employment and social welfare sector is an important element, particularly as
regards the definition of objectives assigned to public employment services as well as their
expertise and responsibilities in the strengthening of social dialogue and support for
reforms in this area. The migration of workers, which is a challenge in Mauritania, has forced
the administrative services in charge of employment to acquire expertise in the field of
employment law in order to ensure that implementation conforms to international conventions.
In addition, priority reforms should target: i) adapting the regulatory framework to the
socioeconomic context; ii) the renewal of trade union federations through elections; iii)
strengthening public employment services to enable regulations to be applied; iv) updating
legislation regulating social security and the National Agency for Occupational Health (Office
National de la Médecine du Travail); v) adapting the legal framework of the National Social
Security Fund (CNSS) to the country’s socio-economic context by analyzing the potential for
extending social cover to workers in the informal sector given that social security cover currently
extends to only about 7% of the active population.
21. The quality of human capital is also conditioned by the health of the population.
Current trends point to the risk that the Millennium Development Goals on child and maternal
mortality will not be reached. Nutritional imbalance also remains worrying, particularly for the
mother-child pair. The main problems in the health sector particularly involve the country’s
epidemiological profile, the state of the sanitation system, and the environment (hygiene, access
to drinking water, sanitation, food security, people’s level of education). Sanitation remains
inadequate in some areas and personnel (nurses, midwives, doctors) is often qualitatively and
quantitatively inadequate. In addition, some hospitals have become degraded, there is a lack of
some types of specialized care as well as poor coordination between the decentralized health
centers and regional hospitals, and the use of resources made available to the sector is inefficient.
Priority action must target, among other things: i) expanding health provision to give every
citizen local access to health and nutrition services; ii) strengthening medical and paramedical
staff training; iii) providing medical expertise nationwide; and iv) improving access to medical
equipment and financing.
22. The development of the drinking water and sanitation sector is also crucial to
human capital development and to the attainment of the Millennium Development Goals. Urban and semi-urban population growth limits progress in extending the coverage rate for
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drinking water. The restructuring of this sector carried out between 2001 and 2008 has improved
the framework for intervention by creating specialized institutions. The water code has
established a framework for a partnership between the State, local communities, and private
operators. However, reform implementation remains incomplete either at the legislative level or
as regards accompanying measures. Weak civil service capacity remains a major constraint on
the sector. The sector strategy priorities outlined in the 2006-2010 Strategic Framework for the
Fight against Poverty (CSLP)4 must be strengthened through an annual program of hydraulic
infrastructure construction. Information on water resources must be improved, surface water
upgraded, sanitation measures in urban and rural areas reactivated, the public-private partnership
promoted, and stakeholder capacities strengthened at both central and local levels.
Infrastructure
23. To encourage the diversification of its production base, Mauritania must address a
lack of capacity in the electricity sector. Demand for electricity has greatly increased,
particularly in urban areas, and rural electrification remains limited. The situation in the sector is
worrying, given the precarious financial position of the sole operator, SOMELEC, whose
accumulated losses exceed its capital and reserves. Furthermore, the Economic Regulation
Authority (ARE) does not regulate SOMELEC’s activities, which means that questions
concerning incentives, how the operator is remunerated, and how the sector is performing remain
unexamined. There is an urgent need for change, particularly in the area of strengthening
SOMELEC’s management (collecting bills, fighting fraud, reducing technical loss, and
eliminating State-SOMELEC cross-debts), increasing its production capacity, and strengthening
rural electrification within the framework of a public-private partnership.
24. Another significant challenge for the country is upgrading transport infrastructure
to improve national competitiveness, including opening up agricultural production areas. The main constraints on transport development are linked to the country’s size, the poor
absorption capacity of public investment, high transport costs especially for marine freight, an
obsolete fleet of road transport vehicles, an inadequately maintained road network, the need to
upgrade infrastructure and port and airport equipment, the lack of staff training, difficulty in
applying legal and regulatory texts, and the absence of a framework for public-private
partnerships. As regards land transport, the road network is poorly developed and improved,
unpaved roads are rapidly becoming unusable. It is therefore necessary to strengthen the
management of the road fund, implement prioritized programs for road investment that will
promote the main axes of regional integration, build local tracks, and support road haulers in
modernizing their pool of vehicles. As regards port infrastructure, the two ports, Nouakchott and
Nouadhibou, are experiencing severe capacity constraints. Nouakchott's port is in urgent need of
an expansion program because it cannot handle a larger volume (two million tons per annum
compared to the predicted one million). Its costs are high (twice those of Dakar), as is the
waiting time for unloading onto docks. The structures of Nouadhibou's port do not meet security
requirements especially for the processing of oil cargoes, and do not allow for the development
of fishing to be stimulated. In Nouakchott, a public-private partnership should make possible the
construction of a new dock for container ships as well as of new docks for processing bulk cargo.
Similarly, Nouadhibou's port needs in-depth restructuring and rehabilitation so that it can better
contribute to the development of the fisheries sector and provide for the export of ore.
4 The Mauritanian authorities adopted the CSLP in October 2006.
xix
25. The development of the water supply and sanitation sector is also a priority for the
development of human capital and to attain the Millennium Development Goals. The
growth in the urban and semi-urban population has constrained progress in the coverage rate for
drinking water. The restructuring of the sector carried out between 2001 and 2008 has improved
the framework for intervention by creating specialized institutions. The water code has
established a framework for a partnership between the State, local communities, and private
operators. However, the implementation of reforms is not yet complete either at the legislative
level or in accompanying measures. The weakness of civil service capacity remains a major
constraint on the sector. The sector strategy outlined in the 2006-2010 SFFP priorities must be
strengthened by an annual program of hydraulic infrastructure construction. Information on
water resources must be improved, surface water upgraded, sanitation measures in urban and
rural areas reactivated, the public-private partnership promoted, and stakeholder capacities
strengthened at both central and local level.
Development of the Private Sector and Sectors with Future Potential
The Investment Climate
26. The investment climate is generally unfavorable to the development of the private
sector and therefore requires further sustained reform to stimulate the creation of jobs and
the diversification of the productive fabric. Despite reforms in various areas, these have not all
produced the results anticipated due to a lack of appropriate accompanying measures. The main
barriers5 to the development of the private sector are linked to the under-development of
financial markets, limited access to credit especially for SMEs, an overly burdensome tax
system, the anticompetitive practices of enterprises, the unreliability of the infrastructure, the
cumbersome nature of administrative procedures, customs and foreign trade regulations, the lack
of qualified workers, corruption, the poor operation of the legal system, and the lack of public-
private consultation and of a framework for a public-private partnership. In this context,
intervention should focus on: i) finalizing the Investment Code; ii) assessing the possibility of
creating a special economic area; iii) promoting financial intermediation and access to credit; iv)
simplifying tax procedures and lightening the tax burden for SMEs; v) promoting a policy of
competition; vi) easing procedures for creating and closing businesses and improving
information service in customs administration; vii) strengthening the legal system; and viii)
reforming the public market system and adopting a strategy for fighting corruption.
Development of Sectors with Future Potential
27. Despite its potential, the rural development sector is experiencing a profound crisis.
5
According to the 2007 Assessment of the Investment Climate (ECI), approximately 45% of businesses
believe that the main obstacles to carrying out their activities are the under-development of financial markets,
limited access to credit, and the high cost of financing for businesses working in the formal sector. In addition, about
37% of businesses blame taxation and the administration of fiscal policy, while 34% stress that they are negatively
affected mainly by the anticompetitive practices of businesses working in the informal sector. Among obstacles to
the development of the private sector, mention is also made of poor access to electricity (30%), customs and foreign
trade regulations (24%), the lack of qualified workers (22%), corruption (18%), and the unreliability of the
infrastructure (16%).
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The policy for the sector is incomplete and its organization is inefficient and marked by
improvisation in programming and the implementation of agricultural campaigns. Managers are
poorly motivated, the level of poverty of those dependent on agriculture and cattle farming is
high, technical capital remains insufficient, and the implementation of land regularization is
slow. The production of irrigated agriculture is on the whole inferior to anticipated results, rain-
fed agriculture lacks support, and cattle farming suffers from limited productivity and processing
activity. It is therefore urgent to update the 2001 strategy for rural development, the acceleration
of land regularization, and the implementation of the pastoral and cattle farming codes. Priority
measures should focus in particular on: i) increasing production in irrigated areas; ii) supporting
rain-fed agriculture more efficiently; iii) rationalizing production in oases; and iv) modernizing
the cattle farming sector. This requires a series of actions targeting, among other things, the
revitalization of marketing channels at every level, increasing crop intensity in irrigated areas,
diversifying production, increasing the quality of seeds, improving the environment for foreign
private investment, facilitating access to credit, and encouraging public-private partnerships.
Institutional reforms are necessary to strengthen the information system at the level of the
Ministry for Rural Development (MRD) and to focus the activities of research agencies.
28. The fisheries sector has reached a critical stage of development in that fish resources
have been heavily exploited while benefits to the national economy are largely generated by
foreign companies and a large part of the benefits generated by the fisheries sector is
exported. The main challenges in the sector are protecting over-fished demersal species and
increasing the country’s added value by creating upstream and downstream processing capacity
on Mauritanian territory and by increasing the value of unloaded catch through preservation,
processing, and the promotion of sanitation. The absence of a strategic vision for the sector is
also a significant issue. In view of its obsolescence, the national fleet must be modernized.
However, financing is inadequate. Short-term priority actions should focus on: i) fixing
objectives for fishing catch and effort (initially targeting cephalopod fishing within an approach
that can be later transferred to other types of fishing); ii) setting up management mechanisms and
measures (records of all fishing vessels, completion of technical and regulatory audits, rules
governing the entry and removal of records); iii) setting up a fishing authorization program; and
iv) creating conditions for locating catches and promoting the products in Mauritania in the best
way possible including the adaptation of current infrastructure.
29. The mining sector can increase its contribution to the national economy in a
framework of transparency and the good management of the environment while promoting
mining exploitation that generates added value and jobs. Some challenges are linked to the
inadequacy of the human and material resources available to the central government, which is
responsible for the promotion and framing of the sector, the lack of diversification in mining
production, weaknesses in current mining exploration, security issues affecting both people and
installations, and the lack of basic infrastructure. Key reforms should focus on: i) improving the
legal and regulatory framework; ii) strengthening and ensuring the sustainability of the structures
created; iii) promoting mining among foreign investors; iv) creating a mining school to train
engineers; v) strengthening coordination at the administrative level; and vi) preventing the
negative impacts of mining activity on the environment. Proceeding with the implementation of
the Extractive Industries Transparency Initiative (ITIE),6 which was delayed because of political
6
Mauritania is a candidate country for ITIE. The deadline for validation is March 9, 2010.
xxi
instability in 2008, is important for the good governance of resource rent.
30. Finally, although Mauritania is at the embryonic stage of its petroleum experience,
the sector remains strategic. The discovery of oil and gas deposits offshore and the operation of
the first oil field at Chinguetti in 2001 attracted oil companies, increasing revenues from the
2006 fiscal year. Although the industry has very high growth potential, it faces structural
constraints that, combined with the recent fall in oil production from the Chinguetti field and
rising servicing costs, led to a slow-down in exploration activities. Moreover, to date, there is no
strategy for promoting and exploiting oil blocks and the legal framework is unsuitable. In
addition, the Ministry of Energy and Petroleum does not have a competent operational
directorate, resulting in skill overlaps between the Ministry and the Mauritanian Hydrocarbons
Agency (SMH). Finally, since oil contracts are awarded without competition, oil exploration and
production are affected. Priority actions should focus on: i) adopting a hydrocarbon code and an
oil strategy and establishing a call for tenders mechanism for applicants to acquire oil blocks; ii)
improving the performance of the hydrocarbons department in the Ministry of Energy and
Petroleum; iii) reviving exploration activities, increasing production activities, and creating a
stable business and work environment; iv) starting production in the first gas pool; v) promoting
public-private partnerships; and (vi) closing audit records of recoverable oil costs on some
exclusive exploration licenses.
31. The matrix below presents a synopsis of recommendations for short- and medium-term
8.34 The strategic guidelines for an integrated surface water management program are:
Improved understanding of the national hydrographic network and development of a
database and an Information Management System (IMS) containing all necessary
hydrological data;
Increasing investment in the area of surface water use (dams, lakes, retention basins, etc.)
59
in order to meet current and fluctuating demand for water;
Encouraging the artificial renewal of groundwater resources through the implementation
of specific operations;
Implementing the Nouakchott Declaration of May 2003, which was adopted by the
Senegal River Development Agency (OMVS/CCEG), in order to continue promoting
subregional cooperation through the integrated, egalitarian, and joint management of the
Senegal river water resources.
8.35 These guidelines will result in the implementation of action strategies that will focus
on:
Studies concentrating on surface water resource listings;
Developing and setting up a database and an IMS focusing on surface water resources as
well as collecting hydrological and hydrographic data;
Carrying out structural work in order to promote the use of surface water resources
(dams, retention basins, etc.);
Monitoring of surface water resources.
Objective 4: Increasing access to sanitation services
8.36 The goal in terms of wastewater treatment is to increase access to sanitation services
from a rate of 55% to 77% in urban areas in accordance with the MDGs.
8.37 The strategic guidelines for wastewater treatment in urban areas are:
Modernizing and expanding Nouakchott’s central sanitation network in the short term;
Promoting the improvement of on-site sanitation technology in Nouakchott and other
urban areas;
Granting priority to low-lying areas that are prone to flooding;
Granting public investment priority to the realization of basic sanitation infrastructures.
8.38 These guidelines will result in the implementation of action strategies that will focus
on:
Developing a strategy for urban sanitation;
Completing the study concerning sanitation technology solutions;
Mobilizing the funding of a master sanitation plan for Nouakchott, Nouadhibou, and
Rosso;
Implementing the Nouakchott sanitation master plan;
Completing the Rosso and Nouadhibou sanitation master plans in order to develop
wastewater and stormwater treatment in these areas.
8.39 The rural and semi-urban wastewater treatment objective is to increase the rate from
20% in 2005 to 60% in 2015.
8.40 The strategic guidelines contained in the PNAR are:
Assessing user demand;
60
Promoting sanitation and hygiene;
Decentralizing activities by establishing memoranda of agreement with municipalities
and other deconcentrated health departments in order to promote sanitation and on-site
water treatment solutions;
Allowing users to finance family sanitation by investing at a maximum rate of 40%,
which may very according to the type of equipment being selected for use. The remaining
funds will be provided in the form of a grant for which the maximum rate is set at 90%;
Public sanitation in schools and health centers will be financed by the Government and
the municipalities;
Encouraging relevant associations to participate by funding equipment, sanitary
infrastructures, markets, bus terminals, meat-packing plants, and other local or public
income-generating facilities;
Maintenance costs will be fully covered by the network’s users, local authorities, or other
benefiting structures such as schools, healthcare centers, bus terminals, markets, etc.;
Updating the PNAR to match current demand in the sector.
8.41 These guidelines will focus on developing the following actions:
Creating a catalog of technical and financial options for the installation of sanitation
systems;
Carrying out promotional campaigns focused on hygiene and sanitation. The
implementation of Hygiene Code regulations will in turn allow for the easier
implementation of hygiene strategies. Initiatives promoting hygiene constitute a
necessary and complementary step toward building sanitation infrastructures;
Strengthening collaboration between various ministerial departments in order to: i)
reduce the risk of flooding or rain-associated nuisance in urban and semi-urban settings;
ii) regulate the construction of flood prevention structures; and iii) build the structures
listed above.
Objective 5: Encouraging partnerships between the private and public sectors
8.42 The following strategic guidelines have been selected with a view to stimulating
private investment in the sector and improving performance in the management of
structures:
Creating a suitable environment for the implementation of laws regulating the water
sector. This may be achieved mainly through closer monitoring of delegated public
organizations;
Selecting one institutional public-private sector partnership for the management of
drinking water operations in urban areas. In accordance with the provisions of the Water
Code, the ownership of facilities, the management of public investment projects, and the
setting of official water pricing continue to fall under the Government’s exclusive
authority. The selected partnership with the private sector must be in compliance with the
objective of reducing poverty;
Improving the management of structures in rural and semi-urban areas through the
gradual development of new methods of delegation, thus aiming to entrust greater
responsibility for maintenance and rehabilitation to private operators;
61
Establishing a framework for concerted action between the public and private sectors.
8.43 These guidelines will result in the implementation of the following main action
strategies:
Strengthening the capacity of structures in charge of monitoring the delegation of public
services;
Providing detailed specifications including factual performance objectives (private
connections, extensions) for private operators. The new contractualization method will be
tested in a few centers located in rural and semi-urban areas and followed by publication
of test results;
Establishing a transparent and collaborative investment schedule (publishing an annual
schedule for the physical implementation of projects);
Defining performance indicators used to monitor system operators;
Carrying out training initiatives to enhance the professional capacity of private sector
operators.
Objective 6: Strengthening the capacity of stakeholders in the sector
8.44 Achieving the goals stated in the Millenium Declaration depends on the ability to
strengthen the capacity of stakeholders in the sector. The strategic guidelines that have been
set to improve performance and strengthen project management capacities are:
Establishing the necessary means that will allow the central offices of the Ministry of
Hydraulics and Sanitation and municipalities to fulfill their role as project managers;
Increasing the amount of qualified staff working for deconcentrated services;
Tackling the reorganization of multiple and unskilled staff working within the various
structures of the Ministry of Hydraulics and Sanitation;
Developing the ability of functional regional departments to offer advisory support to
municipalities involved in project implementation;
Encouraging the collaboration of deconcentrated services and municipalities in charge of
project management with a view to achieving the sustainable management of drinking
water supplies;
Strengthening national borehole and well-drilling capacity;
Enhancing water treatment capacity (including desalination);
Strengthening the capacity to manage surface water resources (Senegal River, dams,
small lakes, permanent lakes, and oases) in order to improve water distribution to the
population wherever possible;
Strengthening capacity to promote and build on-site sanitation systems.
8.45 These guidelines will result in the implementation of action strategies that will focus
on:
Consulting departments affected by staff reorganization measures;
Hiring a sufficient workforce with profiles corresponding to the requirements of
municipalities (planning, monitoring actions, developing standards, regulations and
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programs for implementation) as well as those stated by central and deconcentrated
departments;
Strengthening the capacity to advocate and explain sanitation technology among staff
working for central departments, deconcentrated health and sanitation services, and
municipalities;
Strengthening the capacity to advocate and understand sanitation technology among
private sector operators, drinking water supply network operators, and NGOs;
Creating adequate central, deconcentrated infrastructures capable of accommodating
ministerial departmental staff.
B. CHALLENGES TO IMPLEMENTATION
8.46 Despite the efforts being made, several challenges must be faced:
8.47 The implementation of reform is not yet complete in terms of sectorial coordination
and planning and law enforcement and associated measures. Several important water supply
programs are being developed and implemented by alternative structures without prior
consultation of the Hydraulics and Sanitation Department:
The Ministry of Rural Development designs and builds dams and has been implementing
projects involving the construction of waterworks;
The office of the Commissioner for Human Rights, Humanitarian Action, and Civil
Society Relations is responsible for the funding and implementation of projects involving
the construction of water supply infrastructures;
The office of the Commissioner for Food Safety is involved in the construction of
waterholes and dikes;
The Ministry of Economic Affairs and Development ensures the supervision of APAUS
and AMEXTIPE, which are in charge of implementing water and sanitation programs.
8.48 Weak capacity among public services is one of the principal constraints on the
development of the water and sanitation sectors. This constraint is seen in a lack of qualified
personnel and in under-training among the principal actors in the sector (public sector, private
sector, NGOs, etc.).
8.49 Population growth in semi-urban and urban areas, particularly in the city of
Nouakchott, has constrained the extension of water supply coverage, especially in urban
areas. As a result, there is growing demand for water resources, which in turn generates a
significant need for funding.
8.50 The impact of central and deconcentrated initiatives is limited due to: i) inadequate
human and financial resources, ii) a lack of effective deconcentration, and iii) inadequate
communication between institutions within the sector.
8.51 The sector’s financial balance may be described as follows:
The financial situation in urban areas is precarious due to frozen water tariffs, the high
cost of energy services, and late payment of public service bills;
63
In rural and semi-urban areas, financial balance has not been achieved due to a lack of
regular tariff updating and the rising cost of inputs.
8.52 While the Aftout Essahili project is making rapid progress, sanitation projects in the
city of Nouakchott and other large cities have been slow to develop. Several major cities in
Mauritania suffer from severe chronic flooding as a result of a lack of infrastructures dedicated
to stormwater drainage.
8.53 The objectives and strategic guidelines of this sectorial strategy are in line with the
priorities defined by the 2006-2010 Poverty Reduction Strategy Paper (PRSP) and are
aimed at achieving the hydraulics and sanitation MDGs by 2015. Water supply and sanitation
are considered priorities. The development of the sector should be achieved by following a
planning-by-objectives process linked to a unified and consistent action program that must be
agreed upon by the sector's various stakeholders and that would be implemented within a
medium-term investment framework. The CDMT must submit separate financial and physical
targets and provide an annual schedule per region. Implementation will be evaluated according to
performance indicators been defined under the 2006-2010 CSLP. An additional monitoring and
evaluation mechanism will also be implemented.
8.54 An annual program for the construction of hydraulic structures will be established
in collaboration with various departments and institutions. Practical modalities that will help
improve sectorial coordination will be established in order to increase the participation of the
Ministry of Hydraulics and Sanitation in the monitoring of studies and work being carried out by
relevant stakeholders. The participation of consumer associations will be encouraged in order to
help increase the rate of user interest in issues involving water supply and sanitation.
8.55 Decrees complying with the application of the Water Code are yet to be prepared in
collaboration with relevant ministries and will be subsequently enforced.
C. RECOMMENDATIONS
8.56 The hydraulics and sanitation sector suffers from a lack of support regarding the
implementation of reform that was initiated over a decade ago. This reform requires the
modification of the sector’s organization and its management system. The main actions to be
concurrently carried out in order to strengthen and consolidate this institutional reform are:
Establishing a diagnostic of the reform’s impact. This may be concretely achieved by
reviewing all legal texts pertaining to activity in the sector and analyzing the results of
the implementation of reform in the 2000s;
Supporting the elaboration of a national strategy for the sanitation sub-sector;
Operating a hydraulics information system. This would involve creating a list of water
supply and sanitation infrastructures on a national scale and defining the concepts related
to the supply of water and sanitation services;
Supporting the revision of the legal framework regulating the sector, including Bill 2005-
030 as well as its various accompanying regulations.
64
D. ANALYTICAL GAPS
8.57 As mentioned above, the management of the water sector has undergone profound
changes over the last ten years. These institutional changes have constituted the focus of
several studies referring to the sector. These studies and documents have been used mainly to
support reform. Today’s needs in terms of review and analysis with a view to supporting
continued reform may be summarized as follows:
Analyzing institutional overlapping between stakeholders’ functions within the water
sector;
Conducting a study focusing on the development of a national plan for the integrated
management of water resources;
Updating Hydraulic CMDT specifications set in 2007;
Conducting a study that focuses on developing a comprehensive institutional system for
the development of the hydraulics sector;
Offering monitoring support for the implementation of the Declaration for Sectorial
Development, which was updated in 2006.
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PART III: IMPROVING THE FACTORS OF PRODUCTION:
INFRASTRUCTURE
9. ELECTRICITY
A. CONTEXT
9.1 The electricity sector is characterized by the presence of a single government-
controlled operator – SOMELEC (Mauritanian Electricity Company). Other operators
include the following: i) the Senegal River Development Agency (OMVS), which manages
the Manantali Dam and the 200 MW hydroelectric power plant in Mali and which supplies
electricity to three countries, including Mauritania; ii) the Rural Electrification Development
Agency (ADER), which is responsible for coordinating the rural electrification process; and
iii) the Agency for the Promotion of Universal Access to Regulated Services (APAUS),
which is responsible for promoting access in the poorest urban, peri-urban, and rural areas.
SOMELEC covers the following zones: i) Nouakchott and Nouadhibou; ii) seventeen other
centers including the cities of Rosso, Kaédi, and Bogué (powered by the Manantali power
plant), and a number of other cities (powered at high cost by oil-burning generators). While
all the country’s 13 main administrative centers are electrified, 11 out of 32 secondary
administrative centers are not. Of the 21 that are electrified, seven are included in the
SOMELEC coverage area, six are within ADER’s rural electrification concession, and eight
have SOMELEC acting as customer representative. The coverage rate remains low in cities
within the SOMELEC area as well as in the cities of Nouakchott and Nouadhibou.
According to 2007 estimates, coverage rates in these two urban areas stand at 39% and 48%,
respectively.
9.2 The sector’s legal and institutional framework has been modified since 1998,
a time when a major reform was carried out and affecting the Water and Electricity
Development Policy Statement (DDEE). This reform aimed at: I) eliminating all
monopolies in electricity supply; ii) creating a new legal and regulatory framework that
would enable the private sector to participate in electric power supply; iii) privatizing the
assets of SOMELEC’s electricity business (at the time the sole operator covering water and
electricity); and iv) rationalizing electricity prices to reflect economic costs. Implementation
of the reform was conditional upon privatizing SOMELEC’s electricity production and
distribution activities, which involved identifying a strategic partner that would initially buy
49% of the assets of its electricity sector activities. However, initiated in 2001 to manage
electricity production and distribution activities, the first attempt to privatize SOMELEC
failed in 2002 and the State remained the holder of its entire share capital.
9.3 DDEE implementation was consolidated by the 2001 Electricity Bill No. 2001-
19. This document includes legal provisions organizing the sector and governing
electricity production, transport, and distribution activities. This law establishes the
sector’s institutional framework and assigns a regulatory role to an authority that, among its
other functions, defines the criteria for awarding licenses and permits. This authority plays a
consultative role in sector policy design. The law also defines: i) the principles relating to
66
pricing and their approval by the Minister in charge of electricity; ii) conditions for using
public property; and iii) legal disciplinary provisions.
9.4 The role of regulating the sector was assigned to a cross-sector agency, the
Economic Regulation Authority (ARE). Initially created for the telecommunications
sector, its scope of activity was extended by Bill No. 2001-18 to include the water and
electricity sectors. According to provisions under the Electricity Code, ARE is responsible
for: i) drafting principles that define electricity rates; ii) processing and resolving rate and
service quality disputes; and iii) ensuring that operators comply with implementing
provisions.
B. MAJOR CONSTRAINTS
9.5 The electricity sub-sector is characterized by very low coverage and access
rates, in both rural and urban areas. Improving the situation is made difficult by many
structural and competition-related factors including gaps in human and financial resources,
difficult habitat typest, poor energy resource development, and oil prices. Increased
transparency, which will be made possible through improved monitoring of the sub-sector,
is crucial to reversing this trend. The government's overall objective involves increasing by
2015: i) the currently less than 50% urban electrification rate to 80%; and ii) the currently
less than 3% and 5% electrification rates (respectively) in rural and peri-urban areas to 40%.
9.6 Demand for electricity has greatly increased since 2000, at an annual rate of
almost 10%. This demand is concentrated in Nouakchott and Nouadhibou, which account
for 87% of SOMELEC’s turnover. For the city of Nouakchott, peak demand was estimated
at 85 MW in 2009, while production capacity there barely exceeded 50 MW. This resulted
in significant load shedding.
Financial Constraints
9.7 To attain government-set objectives for 2015 (an 80% electrification rate in
urban and peri-urban areas and a 40% rate in rural and semi-urban areas), needed
investments are estimated at about MRO 350 billion over 5 years. This means that current
funding levels remain far below objectives.
9.8 The sector’s growth is impeded by SOMELEC’s financial situation, which is
one of severe imbalance. The company has: i) an MRO 15 billion net deficit; ii) an MRO 7
million actual negative cash flow; and iii) MRO 29 billion short term commitments. This
situation is compounded by: i) accumulated arrears especially by the State and the National
Water Company (SNDE); ii) a high technical and non-technical loss rate (very high fraud
rate mostly due to fraudulent behavior on the part of company agents in the absence of
adequate coercive measures to protect the company); and iii) a fixed and inadequate pricing
structure dating back to 1987 and that does not reflect changes in oil prices. These losses
cannot be absorbed either by capital reduction or reserve appropriation. Urgent corrective
measures are necessary.
9.9 Despite the urgency of these objectives, rural electrification is not yet
67
considered a priority sector in public investment. As a result, this sub-sector regularly
suffers from insufficient budget allocations. Two framework documents, the rural
electrification investment plan drafted in 2003 by Burgeap-Semis and the national energy
and poverty reduction strategy drafted in 2005 were accompanied by action plans. However,
they have not yet been implemented and are being updated. Rational planning appears
impossible as there is no fund for financing the rural electrification plan. Based on an
agreement it signed with the government, the mission to coordinate and promote the rural
electrification process was entrusted to ADER. However, the management of rural
electrification equipment apparently goes beyond ADER’s statutory role, which somehow
operates in violation of the Electricity Code. The latter requires that all actors be holders of a
license issued by the Ministry of Energy. It should be noted that a study on institutional
electricity restructuring in rural and semi-urban areas makes provision for a public
institution with specific resources and skills to replace ADER. This institution’s role would
involve identifying homogeneous intervention areas, whether eligible or not for private
sector interventions.
9.10 Due to high investment costs and lack of a regulatory and operational
framework, which is clearly to its advantage, renewable energy potential remains almost
totally unexploited.
Legal and Institutional Constraints
9.11 The current legal and institutional framework originated from an emergency
that produced laws overlapping or even contradicting each other. Recent attempts to
review this framework have not always been successful. Various studies have proposed that
the institutional framework in rural and semi-urban areas be revised. These include the
Energy and Poverty Reduction study, an AFD-financed institutional study, and an internal
study carried out by the Ministry of Electricity following consultations with its various
structures. In regard to the institutional framework in urban areas, provisions for
implementing the Electricity Code should be adopted and SOMELEC’s situation clarified
through specifications accompanied by provisions for rights and obligations.
9.12 Some of the constraints noted include: i) the responsibility overlap of various
actors (MEP, ARE, ADER, APAUS); ii) lack of uniformity in operation management
methods (absence of an asset management unit that ensures continuity of supply); iii) the
need to specify network-based electrical system renewal mechanisms; iv) lack of proactive
management for renewable energy development; and v) absence of a clear framework for
street lighting management.
The Electricity Code
The Electricity Code is only partially enforced. The code assigns a central role to the
regulatory body (ARE) as that all segments of the sector’s activities are subject to tenders
above 30 kVA. As regards electrical energy, the code governs all production, transportation,
distribution, sales, and purchasing activities throughout the country. Moreover, for these
tasks to be fully carried out, the Code is supposed to promote: i) the harmonious
development of electricity supply; ii) the creation of economic conditions that make
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investments in the sector profitable; iii) the development of consumption for all population
groups and industry; iv) compliance with equitable and fair competition conditions; and v)
respect for user and operator rights. The Electricity Code was designed to organize the
activities of SOMELEC as a private entity following SOMELEC’s split into two separate
companies, one for water and the other for electricity. As a result of a failed privatization
process, the Code was never enforced and none of its implementation provisions has even
been enacted. Moreover, the Code has some shortcomings, namely: i) as regards
intervention norms and standards, it makes no provision for specifically addressing rural
electrification and renewable energy development; ii) it does not take into account the role
of local authorities especially as regards street lighting, which falls within their area of
competence under the Municipalities Bill; iii) it does not clearly address the issue of facility
ownership; iv) it does not specify requirements for applications for licenses and permits; and
v) it does not specify the regulatory method applicable to various operator categories.
Programming and Regulatory Overlaps
9.13 According to the new laws organizing the activities of the Directorate for
Electricity, this structure is responsible for: i) planning the sector; ii) programming
and monitoring investments; and iii) programming and monitoring project owner
representatives. In actual practice, adjustments in operational role distributions will
probably be needed for greater clarity to partners. Currently governed by a project owner
representative delegation agreement binding it to the State, ADER’s missions should be
adjusted and become an asset management company, as defined by the institutional study.
The programming of primarily cross-sector universal access projects, carried out by
APAUS, is subject to the Ministry’s approval through two mechanisms: i) validation by the
General Assembly, which requires prior submission to sector departments (water, energy,
and ICT), and ii) the project owner representative’s approval and delegation following the
General Assembly’s decision. A better connection between government objectives and
specific universal access objectives is yet to be established. Moreover, given the specificity
of rural electrification regulation, which in effect boils down to monitoring operator
specifications, and due to an increase in the number of local operators, it may be necessary
to officially delineate roles.14
Operational Overlaps
9.14 Operational overlaps primarily involve the three structures that benefit from
building works contracts (SOMELEC, APAUS, and ADER) and SNIM. There is no
official distinction between urban, semi-urban, and rural areas. In practice, priorities were
equitably distributed among the three Delegated Works Contractors (MOD) (six sites each,
given that APAUS did not finally implement the Choum site due to overlaps with ADER).
Thus it is now necessary to define a set of intervention criteria, which is what the Directorate
14
The new universal access law, which assigns regulatory powers to APAUS at the request of ARE, resolved the
problem of divergent interpretations of laws by these two institutions. The consultation mechanism put in place
operates effectively in resolving issues raised by service delegations. However, the new law contains elements that
need adjustment, including fund management and owner representative delegation agreements.
69
for Electricity intends to do on the occasion of the DPCSC review.15
In particular, the
current framework lacks a formal intervention structure along with the resources needed to
ensure the necessary supervision of operators recruited by ARE on a license basis. APAUS
has set up a structure for managing operators in five centers it created. Meanwhile,
SOMELEC runs this activity and receives support from the State (outside of the official
agreement), and ADER lacks the human, technical, and financial resources to carry out the
operations entrusted to it.
Human Resources Constraints
9.15 Limited human resources constitute the most significant constraint on the
sector’s development. Project implementation capacity is greatly hampered by severely
inadequate human resources at the levels of both central administration and operators. To
build capacity, it is crucial that incentives designed to attract trained personnel be offered
and in particular that training sessions be organized for junior, technical, and public
administration personnel.
C. RECOMMENDATIONS
Short-term Recommendations
9.16 Urgent measures necessary for rapidly improving SOMELEC’s financial situation
include:
Reconstituting SOMELEC’s equity fund to the amount of cumulative deficits, which
stood at MRO 21 billion at the end of December 2009;
Implementing an MRO 3 billion crash program to improve production and distribution;
Paying off State/SNDE outstanding debts amounting to MRO 10 billion;
Accelerating bill collection especially of bills owed by public administration services and
the national water distribution company;
Strengthening the fight against fraud and fraudulent activities by some agents;
Reducing technical losses;
Writing off cross-debts between the State and SOMELEC, restructuring debt, and
increasing the company's capital base with State support.
15
In semi-urban and rural areas, two partners, namely AFD, which has long been the sole actor in the sub-sector,
and to a lesser extent the World Bank requested that actor roles be clarified. In addition, this request is what
accounts for the universal access law review. As regards AFD in particular, its continuous intervention in the sub-
sector depends on the appointment of a unique MOD. So far, two studies have proposed projects.
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9.17 The Electricity Code should be revised and implementation provisions
enacted, especially in relation to:
Extending the intervention area to the entire sector, and especially simplifying
SOMELEC's regime;
Introducing a new chapter specific to rural electrification, notably by classifying the
different levels of private sector interventions (grants, leases, outsourcing, etc.);
Introducing a chapter specific to the development of renewable energy;
Based on this classification, clarifying the aptness of installations and especially the role
of each stakeholder and responsibilities for developing and extending different segments
(transportation, distribution, production).
9.18 Human resource constraints should also be removed to ensure planned
development in the sector. In this regard, it is crucial to identify incentives that would
attract trained personnel and in particular provide adequate training for junior, technical, and
administrative staff.
Medium-term Recommendations
9.19 Medium term recommendations include:
Carrying out rehabilitation investments and strengthening technical management (as
indicated in the CCI analytical report on SOMELEC);
Clarifying the institutional framework to facilitate private sector interventions;
Implementing a tax review that takes into consideration oil price increases. SOMELEC
estimated at the end of 2008 that a 14% average rate increase was necessary to balance its
operating accounts. This would result in additional inflows amounting to MRO 3.5
billion. For 2009, without a rate increase or additional subsidies, the company's budget
deficit was estimated at MRO 3 billion;
Implementing a master plan detailing a development strategy for low-cost production,
transportation, and distribution infrastructure. Attaining the State's objectives for 2015
requires mobilizing MRO 500 billion to finance the following development program
during the next five years:
◦ Network production and high voltage transmission: i) constructing a large, gas-fired
350 MW plant by 2014 (a study is nearing completion, with a budget estimate of
EUR 400 million); ii) developing the interconnected high voltage network:
Nouakchott-Nouadhibou (400 kV, with a study underway with the National
Electricity Agency – ONE), Nouadhibou-Zouerate (90 kV or 225 kV), and
interconnecting the mining area in the north, Sélibaby-Kiffa (90 kV or 225 kV), and
Kiffa-Aioun-Néma (90 kV or 225 kV); iii) constructing wind (Nouakchott,
71
Nouadhibou) and solar (inland regions) power stations, with a total capacity of 100
MW, and connecting these to the network; iv) projects financed under OMVS:
Constructing OMVS second-generation dams in Mali and Guinea (Félou – 115
gigawatt hour/year for Mauritania; Gouina – 160 gigawatt hour/year for Mauritania,
Koukoutamba, Gourbassi, and Bouleya, with construction planned for 2017); Bakel-
Sélibaby transmission line (90 kV, contract awarded); developing the OMVS high-
voltage network on the Mauritanian shore (225 kV or 400 kV, with a study on the
OMVS network master plan being launched);
◦ Mid-voltage transmission and distribution: i) connecting over 100 semi-urban
localities to the 33 kV mid-voltage interconnected network: Kaédi-Boghé, Kaédi-
Civé, Civé-Maghama-Sélibaby, Boghé-Aleg, Kaédi-Lexeiba-Monguel, through
bidding (DAO) loan (in the process of seeking research funding); ii) extending the
mid-voltage network to remote sites: Aleg-Boutilimit, Aleg-Maghta Lahjar, Kiffa-
Guerrou, and Aioun-Tintane; iii) extending and strengthening the Nouakchott and
Nouadhibou distribution networks (studies seeking funding);
◦ Electrification of remote sites: i) electrification through isolated systems powered by
solar, wind, or ENR diesel-hybrid systems of 50 semi-urban areas (with a capacity of
about 100 kW) involving all wilayas in Mauritania; ii) electrification by hybrid
systems (wind energy/ diesel /solar/biofuel) on the coast (study available, funding gap
to be met); iii) electrification of highly remote rural areas through multifunctional
platforms (MFP), solar kits, and small wind turbines for battery charging stations,
involving all wilayas in the country.
Making swift decisions regarding the construction of a large power plant (with dual
turbines running on natural gas and oil). These decisions must fall within the framework
of the electricity sector’s strategic vision and the 20-year master plan. Capacity expansion
projects should be carried out at minimal cost. The government must decide promptly
regarding the option of using the PPP format for constructing the power plant as this
approach, which prevents the State from running into serious debt, could be supported by
donors;
To support renewable energy development:
◦ A feed-in tariff incentive regime with tax credits and/or tax exemptions for inputs
such as renewable equipment should be set up. The possibility of strengthening the
department responsible for these areas or even of creating an agency supported by
CRAER is under study;
◦ A specific service for rural electrification and renewable energy should be created.
The connection between these activities and those of other entities should be
formalized (land improvement, National Statistical Office – ONS, weather
forecasting service, various Ministry of Finance departments, etc.).
Harmonize the various laws that govern the sub-sector by:
72
◦ Reviewing instruments, especially the outdated ADER agreement, by assigning to the
Ministry for Energy and Oil (MEP) the missions entrusted to it by the spirit of the
1998 reform and the decree organizing its activities. Planning a status change for
ADER, transforming it into an asset management company within the new regime
and as part of Sector Policy Declaration (DPS) capitalization;
◦ Providing central structures (MEP and the National Multisector Energy Committee –
CNME) the tools necessary to enable them to fully play their roles of planning and
coordinating the sub-sector. In this regard, the DPS should be reviewed as soon as
possible;
◦ Formalizing the separation of ARE and MOD roles in consultation with the MEP. An
ad hoc committee comprising MEP, the Ministry of Finance (MF), ARE, and
SOMELEC should give particular attention to ARE-SOMELEC relations;
◦ Formalizing ARE’s role vis-à-vis local authorities to ensure close and effective
regulation in compliance with the framework law on land use planning;
◦ Formalizing the asset management company’s intervention mechanism and defined
intervention scope.
Choosing an operational framework and making the sub-sector’s strategies and action
plans more transparent by drawing from accomplishments in the field and the experience
resulting from implementing the first measures of the 1998 reform in terms of both
regulation and MOD. Problems that arise while operating electrified sites should be
resolved as soon as possible (clearing, heavy maintenance, technical monitoring of
operators).
D. CHALLENGES TO IMPLEMENTATION
9.20 Major challenges include:
Lack of a clear government strategy concerning private sector participation;
Lack of clear sector investment planning;
Lack of technical capacities, especially at ARE.
E. ANALYTICAL GAPS
A World Bank-funded draft study report on reforming SOMELEC was produced in
August 2008. It is expected to be finalized and to include a potential domestic and
regional demand analysis;
73
Production-transport-distribution blueprint: this is the MEP's major project, without
which the country's energy problems cannot be coherently and efficiently resolved by
2025;16
National energy planning capacity building: project implementation carried out in
collaboration with the International Atomic Energy Agency (IAEA). Finally, in addition
to setting up planning tools developed by the agency as part of the global planning
mechanism, plans are underway to implement energy development during the ultimate
phase (2011). For 2010, the project will focus on: i) purchasing equipment for
establishing a database and a GIS, and ii) covering the work group’s data collection and
travel costs;
Rural and semi-urban electrification investment plan: i) adapting the rural electrification
program intervention framework, specifically the preparation of instruments in the light
of the institutional study conducted; and ii) adopting an objective set of criteria for
intervention. This would involve updating the study conducted in 2003 by the
Burgeap/Semis group to take into account the following aspects: i) evaluating current
management systems, in particular as regards solar energy, to examine the possibility of
systems that allow for revolving terms (pre-payment or other leasing); ii) refining
network intervention criteria and prioritizing programming in relation not only to
economic but also technical data (interconnection distance, post availability periods,
etc.); and iii) adapting to the government-defined institutional framework;
Sector policy statement (DPS): Adapting the entire sector's organizational and
operational framework so as to ensure transparency for all sector stakeholders, including
the various ministerial departments;
CDMT energy: It is necessary to review spending for this sub-sector approved by the
State either directly or through its donors. The goal is to concretely implement three-year
action plans that resulted from CSLP objectives and various general plans. CDMT is
typically the most efficient programming instrument for meeting State-defined objectives.
A draft of this study carried out internally by ONE is being reviewed by sector structures;
ENR development strategy: Drafting a strategy and action plan to develop the country's
abundant renewable energy resources and propose a coherent energy mix. This would
involve identifying exploitable renewable energy potential and implementing
mechanisms necessary for its development. The first phase should define the approach
and select the most promising options for launching feasibility studies and propose a
framework law and an action plan. The process should also include drafting an
investment plan and creating a map of major energy potential, which should be part of the
development strategy. As regards financing, the State released MRO 40 million under the
2010 budget, an amount expected to be fully committed. This project is a component of
16
In collaboration with the World Bank, which brings supplementary financing of USD 400,000, the MEP has
drafted this study's terms of reference (TOR), which have been finalized, and the bidding document (DAO) is ready
for launching.
74
the global electrification master plan, into which it is integrated through its components
related to the development of domestic resources in all energy sub-sectors. The study has
various objectives: i) taking stock of resources; ii) identifying suitable technologies; iii)
defining necessary investment levels; and iv) establishing standard tender documents;
Increased efforts should me made to strengthen the partnership with the International
Renewable Energy Agency (IRENA), based in Abu Dhabi, in order to access its
programs, when appropriate;
A pricing study on peri-urban areas: The pricing framework currently in force within
SOMELEC should be adapted to economic realities. The current grid, which dates back
to 1987, does not: i) specifically define charges attributable to various users; ii) set up a
possible mechanism for cross-subsidization or otherwise; iii) ensure equity among
customers; and iv) offer a cost structure that cuts across the entire activity chain
(production, transmission, distribution, and possible purchase for resale);17
The organizational, institutional, and operational framework resulting from the reform
and from various institutional studies should be finalized. Key objectives include: i)
harmonizing regulations; ii) defining a set of criteria for intervention; iii) effectively
transforming ADER into an asset management company (which would also resolve the
recurrent problem raised by partners, namely that of institutional overlaps); iv) studying
pricing; and iv) financing rural electrification. This is in support of State infrastructure
management orientations, which favor private sector intervention;18
ADER's role in the rural electrification process should be reviewed. Moreover,
consideration should be given to the possibility of creating a public institution with
resources and skills suitable for defining homogeneous intervention areas and promoting
private sector involvement.
17
Although a study conducted in 2003 provides some clues, these are not based on a method that takes into account
the entire activity chain. Department-drafted Terms of Reference (TOR), ARE, and SOMELEC are a first step
toward an indispensable regulatory system. It has been proposed that the funding initially meant for an audit in
PPIAF financing be allocated to this project. The department proposed allocating the budget to the PACAE project
instead of the audit that was planned and even carried out. 18
Although about 20 centers are currently being managed by ARE-recruited service delegates, some adjustments
will need to be made to ensure service and equipment sustainability and to establish indispensable monitoring
mechanisms. To optimize experience feedback, this support measure will span a period ranging from one to three
years.
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10. ROAD AND MARITIME TRANSPORTATION
A. CONTEXT
10.1 Road transportation plays a vital role in the Mauritanian economy as great distances
separate current or potential production zones from consumers and exporters. Estimated at a total
of 11,000 kilometers, the country’s road network comprises 2,900 kilometers of asphalted roads,
1,225 kilometers of rehabilitated earth roads, and 6,880 kilometers of tracks.
10.2 From an institutional point of view, recent reforms in the sector have eliminated
monopolies and considerably reduced road transportation costs for passengers and goods.
This change is due in particular to the elimination of the formerly FNT-managed and dominated
National Transportation Unit (BNT). The road transportation sub-sector reform, which was
launched in 1998 and took effect in 2005, revolves around two major pillars: i) liberalizing the
sector’s activities; and ii) setting up a national road safety strategy. Liberalization entailed
eliminating the National Transportation Unit’s (BNT) monopoly on the management and
allocation of freight and passengers. This system resulted in: i) artificial fleet overcapacity; ii)
transportation costs higher than those that could have been generated by a truly competitive
market; iii) lack of operator competitiveness (dilapidated equipment, lack of professionalism);
and iv) poor quality of service. As part of the road transportation sub-sector reform, Decree No.
1043/MET of November 9, 2005 eliminated the BNT as well as the service rota and the delivery
of departure records. Weaknesses include delays in scheduled studies and in considering
supporting measures.
10.3 The national road safety strategy was set up with the support of a five-year action
plan (2006-2010), which included the adoption of a new highway code (Decree No. 2006-047
of December 6, 2006 and its implementing Decree No. 2007-006 of January 5, 2007). The
plan aims to halve the number of road accidents in five years while reducing the severity of
accidents as well as the death toll. Significant progress has been made, notably in: i) drafting
statutory instruments; ii) drafting and disseminating a new highway code; and iii) sensitizing
users to road safety issues.
10.4 Maritime transportation services are mainly provided by foreign companies, most
of which are not established in Mauritania and are only represented in the country by
local, independent maritime agents or subsidiaries of their group. Other stakeholders in
Mauritania’s maritime sub-sector include the different professions involved in the maritime
passage of vessels and goods, namely shipping agents and ship consignees, handlers and goods
consignees, and forwarding agents. Bill 95/009 of January 31, 1995 on the shipping code is the
main reference document for the maritime transportation sub-sector's legislative and regulatory
framework.
10.5 Mauritania has two sea ports, Nouakchott and Nouadhibou, both facing serious
capacity constraints. Nouakchott has an off-shore port, which was completed in 1987 on a
rectilinear shoreline without a natural sheltered site. The Nouakchott autonomous port, also
known as the “Port of Friendship” (PANPA), is a public institution created by Decree No.
87/253 and modified by Decree No. 91/076. Decree No. 86/177 sets the boundaries of the 867-
76
hectare maritime public property and exclusive State property constituting the Nouakchott port
zone. Technically supervised by the Ministry of Equipment, it is a financially autonomous
industrial and commercial public institution with a legal personality. The autonomous port
replaces the State in all its rights and obligations relating to infrastructure, estate, equipment, and
tools entrusted to it by the State. These, however, remain State property.
10.6 The mutual relations and obligations of the State of Mauritania and the Nouakchott
Port Authority are governed by a program contract. The first program contract ran from
1993-1995, the second ran from 1996-1998, and the third was scheduled to enter into force in
January 2007. This program contract sets the port’s performance, management, and investment
objectives as part of its development plan as well as the measures to be implemented by
contracting parties to attain these objectives. The port's infrastructure traffic capacity was
estimated at 900,000 tons in 2000. However, according to port data, traffic reached 1.82 million
tons in 2005 while the average wharf occupancy rate was estimated at 66%. The port’s maximum
capacity was evidently underestimated and the port is apparently not completely saturated.
However, traffic levels attained in 2005 show the urgent need to extend current port
infrastructure.
10.7 The Port of Nouadhibou is located in the small Cansado Bay on the southeastern
shore of the Ras Nouadhibou peninsula, which borders the larger Levrier Bay. The
Nouadhibou site includes independent port infrastructure: the Autonomous Port of Nouadhibou,
the SNIM ore terminal, the oil wharf of the Mauritanian Refining Company (SOMIR), and the
small-scale fishing port located in Baie du Repos. Decree No. 98/079 sets the boundaries of the
port's maritime and land public property. The status and operation of the port are governed by: i)
Decree No. 73/035 creating a public institution for managing port facilities; ii) Decree No.
83/186 reorganizing the institution itself; and iii) Decree No. 2000/151 modifying Article 2 of
Decree no. 83/186. The port is a financially autonomous industrial and commercial public
institution with a legal personality. It has operated under the supervision of the Ministry of
Fisheries and the Maritime Economy (MPEM) since1983. The autonomous port is financially
responsible for operating, maintaining, and renovating the facilities entrusted to it. Its annual
program, multiyear investment programs, budget, balance sheet, and financial accounts are
jointly approved by the Ministry of Finance and the Minister directly responsible. Mutual
relations and the obligations of the Mauritanian government and the Nouadhibou autonomous
port are governed by a program contract. The first program contract ran from 1996-1999, the
second from 2001-2003, and the third from 2004-2006.
B. MAJOR CONSTRAINTS
10.8 Global and structural constraints affecting the development of the transportation
sector are related to, among other factors: i) the vastness of the territory; ii) weak public
investment capacities and inadequate technical, financial, and human resources relative to the
sector's needs; iii) inadequate and sporadic road maintenance due to the poor management of
highway funding; iv) failure to upgrade airport facilities and equipment; v) lack of staff training;
vi) inadequate port access, processing equipment, and facilities; vii) difficulties related to
applying legislative and regulatory instruments; viii) lack of investment in port infrastructure
while the country’s development continues to be hampered by high ocean freight rates, resulting
77
in a lack of competitiveness at regional level; and viii) the absence of a strategy promoting
public-private partnerships in the sector.
10.9 The sector lacks a clear vision that would reflect the challenges it faces and a strong
political commitment to make decisions that would promote its development. However, the
sector's development is crucial to that of other social and economic sectors such as health,
education, mining, energy, agriculture, livestock breeding, fishing, and tourism. The sector also
lacks medium- and long-term action plans.
Road Transportation
10.10 Today, not all regional urban centers have asphalted roads.19
Developing improved
earth tracks, which cover parts of the mughaatas, does not provide an efficient and sustainable
solution as these roads become impracticable each year and their annual maintenance and
rehabilitation costs are very high. The poor state of the road network stems largely from
inadequate maintenance resources.
10.11 From an institutional perspective, the fragility of the system and the absence of
supporting measures account for the sector’s state of disarray. For instance, its tax status has
barely progressed even though one of the topics that was open to discussion was the
implementation of measures aimed at encouraging transportation operators to renew and/or
rehabilitate their fleet, a temporary reduction or postponement of dues and taxes on imported
vehicles and spare parts, registration dues, and taxes, etc.
Maritime Transportation
10.12 The Nouakchott seaport currently handles twice the annual volume of operations
initially planned (2 million tons as against an expected 1 million) and urgently requires
expansion. At present, the port cannot handle higher volumes. Its costs are among the highest in
the continent (twice those of Dakar). Waiting times for docking are very long. According to
projected estimates, potential traffic volumes could reach 4 million tons in 2015 and 8 million
tons in 2025. Already, 25% of cargo destined for Nouakchott goes through the Dakar seaport.
Finally, construction of the port in the 1980s provoked considerable environmental damage,
which must be remedied. In particular, the presence of port facilities has modified the coastline,
resulting in regular erosion of the southern shore.
10.13 The Nouadhibou seaport facilities do not comply with safety requirements,
especially as regards handling hydrocarbons. This hampers regional economic development,
notably fishing. In 2005, Typsa, a Spanish consultancy, carried out a feasibility study on the
Nouadhibou fishing port expansion project. In its conclusions, the consultancy presented two
expansion alternatives south of the lighterage wharf to be granted to the SAMMA Corporation
(Variants 1 and 2) and two other expansion alternatives that would include the Trade Center and
the area south of the lighterage wharf. With the support of international consultants (Catram
Consultants – Le Havre Port Authority), a discussion is underway regarding the coordination of
19
Selibaby and Zouerate do not yet have an asphalted road network, though Zouerate is one of very few cities with
a railroad link to Nouadhibou.
78
port activities (fish products, container and bulk cargo, hydrocarbons, etc.). The goal is to reach a
coherent plan that would support regional development through an integrated approach.
C. RECOMMENDATIONS
10.14 Regarding the sector in general, measures to be taken should include:
Applying/adapting regulatory texts governing the organization of the sector;
Implementing reform support measures for the road transportation sub-sector;
Creating the institutional and regulatory framework for promoting public-private
partnerships;
Drafting master plans for infrastructure development.
10.15 More specifically, the following measures should be implemented following the time
frames listed below.
Road Transportation
Short-term Recommendations
10.16 Road sector priorities include:
Revising or adapting the road maintenance institutional management framework and
setting up an adequate and sustainable funding mechanism, and in particular,
strengthening funding sources and Road Fund (FR) management;
Carrying out road investment programs that would promote regional and sub-regional
integration (road network to Mali from Algeria, Morocco, and Senegal). All road network
expansion programs should include recurrent costs and sufficient FR allocations;
Build rural tracks to improve the transportation of local produce to markets. This must
form part of a national rural development and opening-up strategy;
Providing assistance to road transporters for renewing and/or refurbishing their fleet
through the creation of a support fund and/or the implementation of adequate one-off tax
measures.
Medium-term Recommendations
Draft a road network expansion master plan;
Draft a national transportation plan;
Draft a sub-sector policy document on urban transportation.
79
Maritime Transportation
Short-term Recommendations
10.17 Measures required for the maritime sub-sector include:
Rehabilitating and developing the Nouakchott port infrastructure through a public-private
partnership (PPP). This would entail sustainably upgrading infrastructure by constructing
two operational areas: one for container traffic and the other for bulk cargo, including
hydrocarbons. Specific measures must be implemented to limit coastal erosion given that
this currently involves eight kilometers of coastline south of Nouakchott. A Chinese
company is currently building a second dock funded by Exim Bank China. In addition, a
third dock could be built through PPPs by private operators specializing in port
management with assistance from the State, which would be responsible for finding
donors;
In-depth restructuring and rehabilitation activities should be carried out in the Port of
Nouadhibou. This will require addressing the wreckage problem – more than 100 wrecks
in total – which poses a major threat to navigation and the environment. A project for
extracting 55 pieces of wreckage will soon be launched with the financial support of the
European Union. The expansion of the Nouadhibou autonomous port for fishing is
planned thanks to Spanish financing totaling EUR 18 million. The expansion of the
SNIM-managed ore port has also been planned, with the objective of increasing the
tonnage of ships that can be loaded from 150,000 to 180,000 tons and to increase loading
capacity from 5,000 to 10,000 tons per hour, for an annual loading total of 26 million
tons.
Medium-term Recommendations
Simplifying the institutional organization of the Nouakchott and Nouadhibou ports.
Because the Directorate of Merchant Marine (DMM) is linked to the Ministry of
Fisheries and the Maritime Economy (MPEM) and the latter is the national legal
maritime authority and the main institution in the maritime transportation sub-sector. The
Nouakchott seaport is attached to the Ministry of Equipment and Transportation;
Updating the legislative and regulatory framework. Bill No. 95/009 on the shipping code
is the main reference document in the maritime transportation sub-sector's legislative and
regulatory framework. However, since its promulgation in 1995, this bill has not been
supplemented by implementing provisions. Other major texts governing the sub-sector’s
regulatory framework relate to port organization and operation and to requirements for
engaging in maritime professions and for obtaining the necessary permits.
D. CHALLENGES TO IMPLEMENTATION
10.18 To implement these measures, Mauritania’s transportation sector needs to confront
a number of current challenges, which include:
Overcoming political apathy: The measures described above depend on political will in
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the country to implement institutional reforms;
Capacity building: The skills required for implementing projects in the transportation
sector are limited, especially as regards technical and fiduciary skills (financial
management and contract awards);
Improving governance: The transportation sector faces poor governance, resulting in
funds being used inefficiently and for purposes other than those for which they were
intended;
Redefining responsibilities: Roles within government agencies are not formally defined.
This lack of clarity as regards responsibilities is a hindrance to the proper functioning of
the sector;
Reorganizing public institutions: Institutional arrangements are inadequate, as
exemplified by the ports of Nouakchott and Nouadhibou being managed by different
ministries;
Securing financing for road maintenance: Funds allocated for road maintenance and
rehabilitation are insufficient. Funding must be secured to ensure the sustainability of
investments.
E. ANALYTICAL GAPS
10.19 Some major studies, now available, have been conducted in the sector, among which
are the Transportation Sector Plan (PST) and the multimodal study on transportation. These studies must be updated and consolidated into one to define and finally adopt an umbrella
strategy for the entire sector. As regards maritime transportation, the Nouakchott Port
Development Scheme must be finalized.
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PART IV: DEVELOPMENT OF THE PRIVATE SECTOR AND GROWTH
SECTORS
11. THE INVESTMENT CLIMATE
A. CONTEXT
11.1 The competitiveness of private sector operators is hampered by low productivity.
More specifically, the 2007 Investment Climate Assessment (ICA) found that the productivity of
Mauritanian manufacturing companies stood at around USD 3,042, compared with USD 6,464 in
Mali and USD 8,989 in Senegal. This weak labor productivity is coupled with relatively high
wages (USD 157-250, compared with around USD 85 in China, USD167 in Brazil, and USD 241
in South Africa). In addition, indirect and hidden costs associated with transportation, electricity
supply, telecommunications, the regulatory environment, customs clearance, and corruption
amount to 12% of company sales (2006), compared with 8% in Burkina Faso (2006), 6.5% in
Benin (2004), and 4.6% in Mali (2007). Consequently, Mauritanian exports are limited and the
level of foreign direct investment (FDI) remains relatively low for lack of investment
opportunities other than in natural resources.
11.2 Mauritania has been engaged in a process of economic liberalization and state
withdrawal from productive and commercial sectors for almost the past three decades. A
privatization program was launched in 1992. In the late 1990s, around two-thirds of public
enterprises were liquidated or privatized, although SNIM and SOMELEC remain in the public
domain. The mining sector has been opened up to private investment. The banking system was
restructured in 1992-1993 to stimulate financial intermediation by writing down non-performing
11.3 A wide range of reforms has been undertaken including trade reform, regulatory
and administrative reform, tax reform, and customs administration reform. Trade reforms
have focused on: i) eliminating non-tariff barriers and quotas; ii) eliminating monopolies and
import and export licenses; iii) rationalizing and reducing tariffs; iv) eliminating customs
exemptions; and v) modernizing procedures. All customs duties are ad valorem, making the tariff
system more transparent. Regulatory and administrative reforms have also been implemented
including the strengthening of the one-stop window and a series of modifications to the
Investment Code of 2002 (which introduced a system of duty-free points designed to boost
exports), the most recent of which was in introduced in 2009. The Mining Code adopted in 1999
introduced tax incentives and simplified procedures for awarding mining concessions. Tax
reforms have moved forward in several stages, with two overriding targets: i) encouraging
economic investment and activity; and ii) broadening the tax base to increase tax revenues.
Customs administration reforms have included the alignment of trade tariffs with the WAEMU
classification, the modernization of management software, and the reorganization of the Central
Customs Office (DGD). Lastly, various measures taken in recent years to strengthen
administrative capacity have not had the expected impact. These have principally focused on the
reorganization of ministries, inter-ministerial coordination, personnel changes, and the
development of computer data management systems. Nevertheless, when it comes to
administrative practices with a real impact on companies and economic diversification, less
82
progress has been made in reforming public institutions and improving the legal and judiciary
framework for investment.
11.4 The authorities have implemented reforms to governance, such as the implementation
of the Extractive Industries Transparency Initiative (EITI), the adoption of a code of ethics for
civil servants, and a law on the wealth of top government officials. A national strategy to fight
corruption is in the process of being adopted, covering all sectors of the economy including the
civil service, the judiciary system, the management of natural resources, public finances, the real
estate and public works sector, public markets, tax and customs, the police and security forces,
and electoral corruption.
11.5 The creation of a Directorate for the Promotion of Private Investment (DGPIP) and,
subsequently, of the CPI demonstrates the importance placed by the authorities in the
private sector and in public-private partnerships. The recent setting up of the National
Monitoring and Evaluation Unit, which is responsible for managing projects deemed sensitive
(according to a mission document issued by the President of the Republic) should strengthen the
State’s actions in this area. That said, the overlapping of prerogatives and the lack of
coordination between different institutions are set to create additional challenges that the State
must resolve if it is to achieve the desired effectiveness. Measures must be taken to clarify the
roles of different entities and internal relations between them. Moreover, the CPI plans to prepare
a private sector development strategy20
in order to: i) confront the constraints impeding the
growth and competitiveness of the private sector nationally; and ii) encourage the growth of
foreign direct investment (FDI).
B. MAJOR CONSTRAINTS
11.6 Despite the reforms undertaken to encourage private initiative, the general
investment climate is not favorable to any segment of the private sector. Reforms, which
have been implemented in fits and starts, have not all had the expected results in the absence of
appropriate follow-up measures. Consequently, the liberal orientation of the economy needs to
be reflected in a higher priority being placed on the development of the private sector, allowing it
to fully play its natural role as an economic engine of growth. In addition, measures will have to
be taken to eliminate the constraints and bottlenecks that hinder the promotion of both domestic
and foreign private investment.
11.7 Private operators have a poor perception of the business environment. It is
therefore essential to continue pursuing political and economic reforms to improve the
investment climate. Mauritania ranks toward the bottom of the rankings in the World Bank’s
Doing Business Report (2010), being ranked 166th
out of 183 economies, behind Senegal (157th
)
and Burkina Faso (147th
). According to the World Economic Forum’s 2008-2009 Global
Competitiveness Index, Mauritania is ranked 131st out of 134 countries in terms of
competitiveness, well behind Senegal (96th
), Mali (117th
), and Burkina Faso (127th
). The
principal obstacles to the development of the private sector are the following (ICA, 2007):
20
The overall objective of this strategy is to: i) create a supportive environment for the sector’s development by
reducing the principal constraints on it; and ii) enhance the sector’s growth and competitiveness, especially that
of small and medium-sized enterprises (SME).
83
The under-development of financial markets, limited access to credit, often too-high
requirements for bank guarantees, and costly financing for companies operating in the
formal sector;
Taxation and the administration of tax policy;
Anti-competitive practices by companies;
Unreliable infrastructures and poor access to electricity (analyzed in a preceding section);
Administrative and regulatory procedures relating to customs and external trade;
A shortage of qualified workers (analyzed in a preceding section);
Corruption;
The operation of the judicial system;
The lack of structured public-private consultation and a framework for public-private
partnerships;
The underdevelopment of financial markets, limited access to credit, and the high cost of
financing.
11.8 The role of the financial sector in the development of the country’s economic fabric
remains marginal because of its insularity, lack of stable resources, and above all the
difficulty of accessing financial services, which are generally restricted to a small and
privileged clientele (less than 3% of the population has a bank account or uses banking
services).21
In addition, access to bank financing remains difficult, especially for SMEs. As a
result, companies make little use of it, creating a distortion in the allocation of credit to the
detriment of small firms. As some commercial banks (six in total) belong to commercial and
industrial groups, the banking system is highly segmented and characterized by limited
competition. According to the 2007 ICA report, approximately 72% of firms requiring bank
credit abstained from using the banking system. This situation is exacerbated by the general
absence of reliable financial statements and the weakness of the accounting profession.
Difficulties in providing guarantees also accentuates the problem of accessing bank credit. For
example, the trade register on which these guarantees are supposed to be recorded is not
operational, and title deeds can only be obtained by first acquiring temporary deeds. The
rejection rate for loan applications is high at around 60%, often because companies are unable to
supply the guarantees demanded by banks. The length of debt collection procedures also explains
the caution shown by banks in granting loans.
11.9 The institutions and financial services, whose role is to support the development of
SMEs, are in an embryonic state. The microfinance sector is still emerging, institutions are
dependent on subsidies, and regulation and supervision of the sector leaves much to be desired.
The insurance sector has not achieved its potential, and the social security system has
experienced serious difficulties that have wiped out almost all of the reserves in its retirement
21
The institutions that make up this sector are concentrated in a few large cities whereas the national territory is
vast. On December 31, 2008, ten banks were in operation (three foreign-owned, one with mixed capital, and six