2013 Investment Climate Statement - Mauritania

2013 Investment Climate Statement
Bureau of Economic and Business Affairs
April 2013

Openness to, and Restrictions Upon, Foreign Investment

Historically, Mauritania has been relatively open to foreign direct investment, particularly with its wealth of attractive natural resources in the fishing, mining, and hydrocarbon sectors. The current government, elected in July 2009, has placed a priority on recruiting foreign investors to Mauritania in these and other industries. It is working closely with the International Monetary Fund, the World Bank, and the international donor community to advance basic infrastructure projects and to update laws and regulations. An anti-corruption campaign, launched in 2009, has met with some success and resulted in steady increases in Control of Corruption indices.

The Investment Code, updated in June 2012, is designed to encourage direct investment, facilitate administrative procedures, and enhance investment security. This updated Code promotes private sector development and encourages entrepreneurship and competitiveness in the Mauritanian economy. It also aims to encourage direct investment by attracting domestic and foreign capital. The main updates are provisions for small and medium enterprises (SME) and the formation of special economic zones.

Contracts are protected by the Civil and Commercial Codes, although court enforcement and dispute settlement can be difficult. The judicial system remains weak, and is unpredictable and inefficient in its application of the law. Judges lack training and experience in commercial and financial law, and are sometimes corrupt.

With the exception of sectors where public companies hold monopolies such as water and electricity distribution, Mauritania has no discriminatory policies against foreign investment, imports, or exports. The mining, fishing, agricultural, banking, petroleum and technology sectors are actively seeking foreign direct investment.

The Mauritanian government has historically practiced mandatory screening of foreign investments to ensure compliance with the country’s laws. Screening mechanisms are routine and non-discriminatory, and until recently were conducted through the Consolidated Office for Investment within the Ministry of Economic Affairs and Development (MAED), a “one-stop shop” also known in French as the “Guichet Unique,” for all sectors except petroleum, mining, and fishing. This office was dissolved in early 2011 and replaced with the Office for the Promotion of the Private Sector (Direction Générale pour la Promotion des du Secteur Privé) in June 2012 as part of the Investment Code revision. The Office for the Promotion of Private Sector (OPPS) falls under the MAED and is divided into three sections: the Office for Promotion of Private Investment and International Cooperation, the “Guichet Unique,” and the Office of Investment Development and Promotion of Environmental Affairs. However, the OPPS is currently located away from the rest of the MAED, and most of the positions are vacant due to a lack of resources.

The revised Investment Code requires investors apply for an investment certificate at the “Guichet Unique” in order to benefit from the advantages written into the revised Investment Code. The period to obtain an investment certificate may not exceed 10 working days after the date of filing. If a response is not received within that timeframe, the certificate is considered granted. While Mauritanian government officials were optimistic that the OPPS will be functional by February 2013, local businessmen suggest September 2013 is a more realistic timeline.

Investors interested in mining, petroleum, or fishing negotiate investment certificates directly with the Ministry of Ministry of Oil, Energy, and Mines or the Ministry of Fishing and Maritime Economy. Mauritania continues to attract significant foreign direct investment in these sectors, which remain vital to the country’s economy. Screening mechanisms for these sectors are similar to other industries in that the Council of Ministers generally approves all recommended projects. Presentation of any foreign investment project to the Council of Ministers is considered a recommendation for approval of a project, which renders an appeals process unnecessary. No U.S. firms have identified the screening process as unduly unpredictable or discriminatory, however U.S. direct foreign investment is limited.

Suppliers for large government contracts are selected through a tender process. Invitations for tenders are publicly announced in local newspapers and on government websites. After issuing an invitation for tenders, the Central Market Commission selects the offer that best fulfills government requirements. If two offers are considered equal, statutes require that the tender be awarded to the Mauritanian company. In practice, this may result in tenders being awarded to companies that have strong ties to government officials, regardless of the merits of an individual offer.




TI Corruption Index


123 out of 174

Heritage Economic Freedom


131 out of 179

World Bank Doing Business


164 out of 185

MCC Gov’t Effectiveness



MCC Rule of Law



MCC Control of Corruption



MCC Fiscal Policy



MCC Trade Policy



MCC Regulatory Quality



MCC Business Start Up



MCC Land Rights Access



MCC Natural Resource Protection



Conversion and Transfer Policies

There are no legal or policy restrictions on converting or transferring funds associated with investments. Investors are guaranteed the free transfer of convertible currencies at the legal market rate, subject to the availability of such currencies. Similarly, foreigners working in Mauritania are guaranteed the prompt transfer of their professional salaries. To transfer funds, investors are required to open a foreign exchange bank account in Mauritania. Transfers from abroad are not limited. There are no legal transaction limits for investors transferring money out of Mauritania, although regulations to undertake such transactions may be complicated.

The local currency, the ouguiya, is freely convertible within Mauritania, but its exportation is not legally authorized. Hard currencies can be easily found in local commercial banks. The Central Bank holds regular foreign exchange auctions, allowing market forces to fix the value of the ouguiya. Individuals and companies may obtain hard currency through commercial banks for the payment of purchases or the repatriation of dividends. If the bank has hard currency available, there is no delay in effect for remitting investment returns. However, if the bank does not have sufficient reserves, the hard currency must be obtained from the Central Bank in order to conduct the transfer. The Central Bank is required to prioritize government transfers, which could present further delays. Delays of one to three weeks, although relatively uncommon, have been reported.

There are no legal parallel markets in Mauritania that would allow investors to remit investments through other means. There is no limitation on the inflow or outflow of funds for remittances of profits, debt service, capital, capital gains, returns on intellectual property, or imported inputs.

Expropriation and Compensation

The revised Investment Code provides more property guarantees and protection. All companies are protected nationwide against nationalization, expropriation and requisition. The Mauritanian government guarantees companies that the tax, custom, and legal regulations in force at the time of issuance of an Investment Certificate remain in force for a period of 20 years. In addition, the investor automatically benefits from any change of favorable tax or customs conditions during the period of validity of the certificate.

The only case of government expropriation since independence in 1960 was the nationalization of the French mining company MIFERMA in November 1974. In that case, the two parties mutually agreed on a compensation plan.

Dispute Settlement

The only recent, large investment dispute between the Mauritanian government and a foreign investor occurred in 2006 with Woodside Petroleum Ltd. In 2003, Woodside signed four production-sharing contracts (PSC) with former President Taya’s government. A transitional government took power following the August 2005 coup. In February 2006, the successor government began a dispute with Woodside over four amendments to the original PSC involving oil revenues and environmental issues. An international arbiter was brought in and the dispute was settled when Woodside agreed to cancel the four amendments, pay US$100 million, and set up an environmental fund.

Following the coup d’état of August 2008, some companies doing business in Mauritania or with the new Mauritanian government claimed that their debts and contracts from the previous government were not honored. Some of these companies were told that agreements signed with the previous government were not recognized by the new government or were signed by parties without proper authority to enter into such agreements. The current government has settled these disputes.

Mauritania has a Commercial Code, related civil laws, and is signatory to many international agreements, but application and enforcement remain limited. Some of the laws governing the financial sector are out of date, and in general, the judicial system is weak. Settling a dispute through the courts can be a long and complicated process. Judges lack sufficient training and specialized experience in commercial and financial law. The judiciary is subject to influence and corruption from powerful political and business figures in Mauritania. Many laws and decrees related to the commercial and financial sectors are never published and are therefore not well understood. It can also be difficult to access laws and legal texts that have been published. Most judgments are not issued within prescribed time limits and are often not issued in writing. The country does have bankruptcy laws, although there are very few reported cases of these laws being applied.

Judgments of foreign courts are accepted by the local courts, but enforcement is limited. The government accepts binding international arbitration of investment disputes between foreign investors and government authorities. (There are also domestic mechanisms for arbitration, both through traditional religious institutions and through the courts. The revised Investment Code plans for a local International Chamber of Mediation and Arbitration of Mauritania (ICMAM) to be housed at the Chamber of Commerce. Previously, issues were referred to the International Centre for Settlement of Investment Disputes. Disputes between individuals or legal entities and the Mauritanian government related to the Investment Code are settled by an arbitration procedure to which both parties have agreed and in accordance with the following agreements:

-- The 1965 Convention on the Settlement of Disputes Related to Investments Between States and Nationals of Other States, also known as the Washington Convention

-- The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards

Performance Requirements and Incentives

Mauritania is in a transitional stage with respect to application of its World Trade Organization (WTO) commitments. It is currently negotiating with the WTO to ensure progress towards complete compliance, which may be a prolonged process.

Performance requirements are sometimes imposed as a condition for establishing, maintaining, or expanding an investment, or for access to tax and investment incentives, and foreign direct investors still report that government-sponsored tenders lack coherence and transparency. Under the Investment Code, investors are required to purchase from local sources if the good or service is available locally and is of the same quality as could be purchased abroad. There is no requirement for investors to export a certain percentage of output or only have access to foreign exchange in relation to their exports. If imported “dumped” goods are deemed to be competing unfairly with a priority enterprise, the government will respond to industry requests for tariff surcharges, thus providing some potential protection from competition.

Investment incentives such as free land, deferred and reduced taxes, and tax-free importation of materials and equipment are available to encourage foreign investors. The government has offered tax benefits, including exemptions in some instances, to enterprises in Special Economic Zones and some companies in priority sectors throughout the country. The Investment Code outlines standard investment incentives, but foreign investors may negotiate others directly with the government.

Companies may employ expatriate staff in up to 10 percent of key managerial staff positions, in accordance with the Labor Code. Expatriate staff may be hired in excess of 10 percent with authorization from the appropriate industry authority by establishing that no competent Mauritanian national is available for the vacancy. Foreign companies are required to transfer skills to local employees by providing free training for lower-skilled jobs

Expatriate staff working for companies in accordance with this Code are eligible to import, free of customs duties and taxes, their personal belongings and one passenger vehicle per household, under the regime of exceptional temporary admission (Admission Temporaire Exceptionelle: ATE). All sales, transfers, or withdrawals are subject to permission of customs officials.

As a matter of law, there are no discriminatory or excessively onerous visa, residence, or work permit requirements inhibiting foreign investors’ mobility. However, some U.S. companies have expressed frustration at the length of time required to obtain visas and their short duration. A single entry, one month visa may take up to three months at the Mauritanian Embassy in Washington D.C. and may not be renewed in country.

Right to Private Ownership and Establishment

The Mauritanian government guarantees any individual or legal entity wishing to undertake business activities in the country the freedom of establishment in accordance with the laws and regulations in force. The revised Investment Code greatly expanded the guarantees of establishment. Previously, guarantees were limited to freedom of establishment and investment of capital. Now any company can benefit from full economic freedom and competitiveness in acquiring property, goods and concessions of any kind necessary for operations, particularly in finance, commerce, industry, forestry, construction, and real estate. Companies may participate in any professional organization, may choose their technical, industrial, commercial, legal, social and financial management styles; may independently select suppliers, service providers and partners; may participate nationwide in tenders for public contracts; may dictate their human resources management policy; and may independently recruit senior staff within the provisions of the Investment Code.

Protection of Property Rights

Property rights are protected under the Mauritanian Civil Code, which is modeled on the French code. In practice, however, it can be difficult to gain redress for grievances through the courts. Mortgages exist and are extended by the commercial banks. There is a well-developed property registration system for land and real estate in most areas of the country, but land tenure issues in southern Mauritania, particularly the area along the Senegal River, are the subject of much controversy. For example, in October 2011, the rural communities around Boghe (located 300 kilometers southeast of Nouakchott) denounced as expropriation the grant of 50,000 hectares by Mauritanian authorities to a Saudi Arabian company, Tabuk El Eziraya, a subsidiary of Errajihi Group. Investors should be fully aware of the history of the lands they are purchasing or renting, and should verify that the local partner has the proper authority to sell/rent large tracts of land – particularly in this region – before agreeing to any deals.

The legal protection of intellectual property rights (IPR) is still a relatively new concept in Mauritania, and those seeking legal redress for IPR infringements will find very little historical record of cases or legal structures in place to support such claims. Mauritania is a member of the Multilateral Investment Guarantee Agency (MIGA) and the African Organization of Intellectual Property (OAPI). In joining the latter, member states agree to honor intellectual property rights principles and to establish uniform procedures of implementation for the following international agreements: the Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works, the Hague Convention for the Registration of Designs and Industrial Models, the Lisbon Convention for the Protection and International Registration of Original Trade Names, the World Intellectual Property Organization, the Washington Treaty on Patents, and the Vienna Treaty on the Registration of Trade Names. Mauritania signed and ratified the WTO TRIPS (Trade Role on Intellectual Property and Service) agreement in 1994, but it has yet to implement it. The government also signed and ratified the WIPO (World Intellectual Property Organization) treaties in 1976. It has not signed or ratified the WIPO Internet treaties.

Transparency of the Regulatory System

In practice, ownership in many sectors of the economy is concentrated among a few families. They have significant monopolistic power, which is reinforced by formal and informal regulatory barriers. Tax rates on businesses in the formal sector are complicated, but begin at 25 percent on profits and 2 percent on turnover; procedures required to pay taxes lack transparency and are and time consuming. Recent efforts to combat corruption have resulted in businesses faced with extraordinary tax bills that they previously could avoid through bribes paid to tax inspectors and assessors.

Labor laws and conditions of employment are complex. There are limitations on hiring, duration of work, and dismissals. Likewise, potentially costly environmental and health and safety laws and policies exist, but remain largely unenforced.

While the government is moving to streamline bureaucratic procedures for investment, difficulties remain. There is a complex and often overlapping system of permits and licenses required to do business. While much improved, there continues to be a lack of transparency in the legal, regulatory, and accounting systems, which do not meet international norms. Proposed laws and regulations are supposed to be published in draft form for public comment before being sent to Parliament, but this does not always occur. There are no informal regulatory processes managed by nongovernmental organizations or private sector associations.

In 2011, the government promulgated two orders to regulate accounting practices of nongovernmental and private entities, which must now have reliable financial management and submit periodic reports of financial transactions. All such entities must also have a local bank account with an identifiable account number and address. In practice, these orders have so far had little impact.

Efficient Capital Markets and Portfolio Investment

In principle, government policies encourage the free flow of financial resources and do not place restrictions on access by foreign investors. Most foreign investors, however, prefer external financing due to the high interest rates and procedural complexities that prevail locally. Credit is often difficult to obtain and dependent upon special relationships with bank owners and officials. Commercial bank loans are virtually the only type of credit instrument. There is no stock market or other public trading of shares in Mauritanian companies. Individual proprietors, family groups, and partnerships generally hold companies, and portfolio investment is accordingly quite limited.

The International Monetary Fund (IMF) has assisted Mauritania with the stabilization of the banking sector, and in recent years, access to domestic credit has become easier and cheaper to obtain. Competition has contributed to the decline of the interest rates on loans from 30 percent at the beginning of the past decade to 11 or 12 percent in 2009, not including origination costs and other fees. These rates have remained stable since 2009.

The country’s five largest banks are estimated to have US$100 million in combined reserves; however, these figures cannot be independently verified, making an evaluation of the banking system’s strength impossible. The Central Bank of Mauritania is charged with regulating the Mauritanian banking industry, but it has exercised little power to demand information or compliance from the family-owned banks. The Ministry of Finance mandates that the Central Bank perform yearly audits of Mauritanian banks, but auditors have sometimes been refused entry and access.

Competition from State-Owned Enterprises (SOEs)

State-owned enterprises in Mauritania are most active in the fields of mining, hydrocarbons, power generation, and public utilities. According to the Public Procurement Code, there are no formal barriers to competition with state-owned enterprises. However, informal barriers such as denial of access to credit may exist.

Hard budget constraints for state-owned enterprises are written into the Public Procurement Code, but not enforced. SOMELEC, the state-owned electricity company, has been operating in a precarious situation for many years. The company relies on government subsidies to remain solvent.

Most state-owned enterprises in Mauritania have independent boards of directors. The directors are usually appointed based upon political affiliations, but typically, they are qualified for their positions. Mauritania is making progress in disclosing information in the oil sector and for the national hydrocarbon company (SMH), but the Mauritanian government does not disclose revenues and expenditures from its mining sector in its budgets.

Officially, there is a sovereign wealth fund administered by the Central Bank: the National Fund for Hydrocarbon Reserves. It was established in 2006 and is funded by revenues that the government receives from companies extracting oil, royalties and taxes that oil companies must pay in order to operate in Mauritania, and from the profits made through the fund's investment activities. The fund seeks to create macroeconomic stability by setting aside oil and gas revenues for developmental projects. However, the fund's management practices are considered less transparent than those of other sovereign wealth funds and the fund is being used to cover shortfalls in the national budget. In 2011, the IMF recommended to the Mauritanian government that it establish a sovereign wealth fund for mining-related revenues, but the government has not taken action to create such a fund.

The Ministry of Finance requires state-owned enterprises to publish annual reports; however, this requirement is not enforced. The sovereign wealth fund publishes monthly reports through the Ministry of Finance. While state-owned enterprises are required to submit their books to independent audit, the last available report from any entity dates to 2006.

Corporate Social Responsibility

There is little local awareness of corporate social responsibility in Mauritania, either on the part of producers or consumers. However, awareness is growing, particularly as more foreign-owned companies enter the Mauritanian market. Certain state-run industries have been active in providing basic educational opportunities for the children of their employees, and scholarships for their employees to study abroad, but this is usually the extent of social responsibility initiatives. Companies in the mining and hydrocarbon industries send young Mauritanians overseas to complete their studies on scholarship programs; many of the scholarship recipients have family ties to powerful individuals in the companies. The larger fishing companies have recently started to provide more opportunities for qualified youth to study at the fishing and naval training school in Nouadhibou in order to prepare them for careers in the fishing industry. Current projects by foreign-owned companies include providing free water to local communities; building vocational training centers, health clinics, and roadways; and providing healthcare equipment and medicines to towns near company operations.

Political Violence

There have been two coups in Mauritania since 2005. Both were bloodless and non-violent. The most recent coup, which occurred August 6, 2008, removed Mauritania’s first democratically elected president, Sidi Mohamed Ould Cheikh Abdallahi, from power. For the first time in Mauritania’s history, there was political opposition to a coup. The Dakar Accords paved the way for elections in July 2009, which were accepted internationally.

The governing majority coalition and several opposition parties engaged in a national dialogue in October 2011 in an effort to resolve the political impasse stemming from indefinitely postponed Senate, National Assembly, and municipal elections. A firm timetable for these elections has not yet been established.

In October 2012, President Aziz was accidently shot in a friendly fire incident at a checkpoint just outside of Nouakchott. The President was seriously injured and treated in France for six weeks. During his recovery in France, the political opposition organized many rallies and called, unsuccessfully, for the President’s resignation. There were rumors of terrorist attacks or coups as well, but throughout this period, the country remained calm and normal.

Civic unrest associated with the controversial national registration program resulted in one death in September 2011 in Maghama, a provincial capital near the border with Senegal. Sporadic protests for other reasons occurred in Nouakchott and elsewhere frequently in 2012, but did not disrupt business activity.

There has been an increase in terrorist incidents in Mauritania by Al-Qaeda in the Islamic Maghreb (AQIM) in recent years, including the murder of an U.S. citizen in Nouakchott in 2009, and kidnappings and murders of European citizens. Also, in 2009, there was a suicide bombing outside the French Embassy and another such attempt against a military base in the southeastern city of Nema in 2010. However, the Mauritanian government has remained firm in its efforts to counter terrorist threats. In February 2011, the Mauritanian military interdicted an attempted truck-bombing attack near Nouakchott, and in July and October 2011, conducted operations against AQIM militants in neighboring Mali. Mauritanian authorities have also arrested and prosecuted terrorists. The Mauritanian judiciary convicted four Salafist terrorists in 2012 bringing total convictions to 144 since 2009. Mauritania has also successfully prosecuted and sentenced the terrorists involved in the murder of the U.S. citizen in 2009. The United States, France, NATO and others provide assistance and training to Mauritania’s security forces.


President Aziz ran on an anti-corruption and populist platform, and donor partners applauded the release of the first-ever Mauritanian anti-corruption strategy in November 2009. There have been a number of high-profile anti-corruption cases that have demonstrated an unprecedented commitment to fighting corruption in Mauritania. Although progress has been made, laws and regulations that do exist are still not evenly and effectively enforced, largely because corruption has historically been so prevalent at every level of Mauritanian commerce and governmental affairs.

Corruption is an obstacle to foreign direct investment in Mauritania, but firms generally rate high taxes, access to credit, underdeveloped infrastructure, and a lack of skilled labor as greater impediments. Larger companies with more powerful connections are generally less affected by corruption than are small and medium enterprises. Corruption is most pervasive in government procurement, bank loans, fishing license attribution, land distribution, and tax payments. Giving or accepting a bribe is a criminal act punishable by two to ten years imprisonment and fines up to US$700, but there is little application of this law. Firms commonly pay bribes to obtain telephone, electricity, and water connections and construction permits more quickly.

Since assuming office, President Aziz has embarked upon an ambitious program to reduce privileges for government employees and to identify and punish those guilty of financial crimes. The current anti-corruption push began in November 2009 when the Bureau of Economic Crimes arrested the former governor of the Central Bank for alleged crimes committed between 2000 and 2001. His arrest was quickly followed by the arrest of the former deputy governor of the Central Bank and the launch of an investigation into the business practices of 12 other prominent businessmen and bankers. The former Central Bank governor was accused of laundering approximately US$95 million over the course of two years, the equivalent of nearly 10 percent of Mauritania’s 2010 budget. All of the individuals arrested in this first anti-corruption push were released in January 2010 and ordered to repay the entire amount.

Mauritania’s Office of the Inspector General of the State handles financial investigations in the public sector. This agency, created in 2005, is under authority of the Prime Minister and has the authority to conduct investigations in all government offices and departments. From 2009 to 2012 there were nine investigations that resulted in the dismissal of senior governmental officers and managers of public institutions because of corruption or mismanagement. The ex-Director General of PROCAPEC, the government’s microfinance office, was sentenced to two years imprisonment and a US$17,000 fine for misappropriation of public property. He was released in October 2011 after serving his two year term. .

The former Human Rights Commissioner was relieved of his duties and imprisoned in August 2010 on grounds of mismanagement. His trial concluded in December 2012 with time served, a US$253,333 fine, and an order to reimburse US$934,482 to the Mauritanian government. Mauritania has also reimbursed funds diverted under the previous administration from Global Fund programs intended to benefit those living with HIV/AIDS, and the international organization has now resumed support to the country.

These most recent investigations highlight the degree to which corruption in both the public and private sectors continues to occur. While most people do not doubt that those accused engaged in corrupt practices, these investigations are controversial as opposition figures claim they are being conducted to settle political scores.

Despite the current push to fight corruption, wealthy business groups and government officials reportedly receive frequent favors from authorities, such as unauthorized exemption from taxes, special grants of land, and favorable treatment during bidding on government projects. Mauritanian and non-Mauritanian employees at every level and in every organization are believed to flout Mauritanian tax laws and filing requirements. The only exceptions are civil servants, whose income taxes are automatically deducted from their pay. Such widespread corruption has deprived the government of a significant source of revenue, weakening its capacity to provide necessary services. Recent efforts to increase tax collection have proven controversial as business owners have been faced for the first time with tax obligations that reflect the relatively high level of formal taxation for businesses that are not eligible for specialized exemptions in Mauritania. Even with record tax revenues announced in 2011, these efforts are criticized for their lack of procedural transparence.

There are several organizations that track corruption within Mauritania. Transparency International has a representative which reports on local corruption policies and events. Additionally, in 2008 several local nongovernmental organizations worked with a UN representative and the Mauritanian government to draft a national action plan to fight corruption. The plan was drafted and submitted in May 2010, but no anticorruption law has been issued as of yet. Mauritania acceded to the UN Anticorruption Convention on October 25, 2006. The country is not a signatory to the OECD Convention on Combating Bribery or any regional anti-corruption initiatives, and there is no requirement for companies to establish internal codes of conduct.

Bilateral Investment Agreements

Mauritania has bilateral investment agreements and investment protection with member countries of the Arab Maghreb Union (Algeria, Libya, Morocco, and Tunisia) as well as with Saudi Arabia, France, Belgium, and Romania. Agreements exist with Burkina Faso, Cameroon, Gambia, Ghana, Mauritius, Italy, Lebanon, Qatar, Yemen, Korea, Egypt, and the Arab League as well. Mauritania has no bilateral investment or taxation treaties with the United States.

Mauritania is a signatory to the Cotonou Agreement between the European Union (EU) and the group of African, Caribbean and Pacific (ACP) countries, and thus enjoys free access to the EU market. As a “least-developed country,” Mauritania also benefits from duty-free access to the European market under the Everything-But-Arms initiative.

OPIC and Other Investment Insurance Programs

Mauritania currently qualifies for Overseas Private Investment Corporation (OPIC) coverage, but its program is limited. Potential investors should contact OPIC directly for guidance. Mauritania is a member of the Multilateral Investment Guarantee Agency (MIGA), which protects foreign direct investment against political risk. A British-Mauritanian insurance company, Atlantic Londongate, offers broad commercial coverage. The Embassy purchases local currency at an official rate of 300 ouguiya per dollar. The ouguiya has been fairly stable over the last few years, but could devalue if there is further political or economic instability.


While labor is abundant, there is a shortage of skilled workers and well-trained technical and managerial personnel in most sectors of the economy. As a result, there are few sectors of the economy that use advanced technologies because the skilled labor required to operate them is not readily available. While labor is relatively inexpensive, labor productivity is very low, even compared to neighboring countries. The mining sector is an exception, where the national mining company (SNIM), the Canadian gold mining company Kinross-Tasiast, and the company Mauritanian Copper Mines (MCM) provide advanced training for their employees. Additionally, responding to the dire need for human capacity development in Mauritania, representatives of several private sector contributors signed an agreement with the Ministry of Oil, Energy and Mines establishing an US$18 million fund for the construction of a mining school in Akjoujt.

Mauritania is a signatory to the ILO conventions protecting worker rights. Labor-management relations are generally good in Mauritania; however there has been an increase in the incidence of strikes recently, particularly in the mining industry. In July 2012, a weeklong strike at MCM resulted in a Nouakchott-based National Guard unit being dispatched to the mine site. They used batons and tear gas to disperse striking workers, beat and detained several protesters, and severely injured one, who died as the National Guard transported him to the police station. Following the death, MCM temporarily suspended its operations and the government launched an investigation. MCM was not implicated in the death or investigation. The Mauritanian government provided US$10,000 in compensation to the victim’s family. As companies expand their operations and perceived profit margins, unions are increasingly trying to negotiate improved contract terms for their members.

Foreign Trade Zones/Free Ports

The new Investment Code creates special economic zones (Free Export Zone or Cluster of Development in the Interior) by decree. Each decree specifies the restrictions of each target area, its name, the subject of economic activities that are encouraged, the structure responsible for its management and the period for which it is established. Free Zones are subject to continuous monitoring by the Customs Service in a manner specified in the decree. Nouadhibou, the commercial capital, has been designated as a Free Economic Zone by the MAED. When this decree is operationalized, it will specify the different criteria of eligibility and the regulatory mechanism for this Free Economic Zone.

The revised Investment Code provides three main preferential tax regimes: Small and Middle Enterprises Regime, which applies to any investment between US$167,000 and US$667,000; Free Export Zones/Clusters of Development, and Targeted Industries, which includes agriculture, artisanal fishing, tourism, renewable energy, and raw material processing. In the previous Code only one “Free Point” existed for certain imports, under the control of the Customs Administration.

The revised Code has several other new beneficial provisions. Basic infrastructure will be provided through public-private partnerships with the government and the interested company, which previously was solely the responsibility of the private company. Land concessions allocated to companies located in Free Economic Zones will follow a rental rate determined by joint decision of the related Minister and the Minister of Finance, which will control land prices and rent from soaring. For tax advantages, companies will be exempt from taxes, excluding personnel taxes such as for retirement and social security, if they have invested at least US$1.6 million and generated at least 50 permanent jobs and show a potential to export at least 80 percent of their goods or services. Additionally, companies will not be taxed on patents, licenses, property or land but rather assessed a single municipal tax which cannot exceed an annual amount of US$16,000. Companies established in free zones are exempt from taxes on profits for the first five years in which they show a profit, after which they are subject to the rate of ordinary law. Additionally, companies established in free zones benefit from a total exemption of customs duties and taxes on the importation of goods, materials, vehicles intended for production (the list of eligible assets is fixed by order of the Minister of Finance) and exemption from customs duties and taxes on exports.

Foreign Direct Investment Statistics

The latest data on Foreign Direct Investment (FDI) for Mauritania, according to national authorities and the IMF, shows that FDI inflows in Mauritania increased significantly from US$128.3 million in 2009 to US$588.7 million in 2011 and US$1.1 billion in 2012. The increase was mostly driven by investment directed to the mining sector. Net FDI equals approximately 26 percent of GDP for 2012, and is expected to represent roughly 20 percent of GDP in 2013. This significant investment flow also represents one of the main financing sources for the currently expanding public works sector in Mauritania.

The most recent and prominent foreign direct investments in Mauritania include:

Woodside Petroleum began off-shore oil production in February 2006 at 70,000 barrels per day (bpd), but production quickly dropped to less than 15,000 bpd due to technical problems in the oil field. After disappointing results, Woodside Petroleum sold its Mauritanian interest to Petronas in October 2007. Petronas, Kosmos Energy, Tullow Oil, Chariot Oil and Gas, and Dana Petroleum are actively involved in off-shore exploration. Current petroleum production is around 7,000 bpd. The French energy conglomerate Total is currently exploring for oil in the Taoudenni basin, the first on-shore oil exploration project in Mauritania. Total claims that considerable quantities of petroleum and natural gas are available in this region, and the first extraction of gas is expected in 2015 for the launching of a new 300 megawatt power plant that is being built in Nouakchott.

There have been significant new investments in iron ore, gold, diamond, copper, gypsum, and uranium mining. In November 2009, the Australian Hanson Westhouse Company (Forte Energy) announced the existence of important quantities of uranium in northern Mauritania. A contract has been signed between Hanson Westhouse (Forte) and the French company AREVA for the transport of exploration equipment and the supervision of the operations. Hanson-Westhouse (Forte) has been exploring for uranium since 2003, but despite promising findings, they have yet to produce any uranium. In a joint venture with the parastatal iron mining company, SNIM (65 percent of shares), China Minmetals Corporation (35 percent of shares) expects to start operations in 2013 with an annual production of 2.5 million tons of iron and the creation of 250 permanent jobs.

In November 2010, the Swiss Group Xstrata announced a US$6 billion investment in the iron ore sector after purchasing 50.1 percent of the shares of the Australian firm Sphere. In August 2010, the Canadian company Kinross purchased Red Back Mining for US$7.1 billion, giving Kinross operating rights over the Tasiast gold mine. Kinross is currently restructuring its previous mine expansion plan and continues to invest heavily in the project

Since 1987, the Mauritanian government has signed five fisheries agreements with the European Union, the most recent covering the period August 2012 to July 2014. Mauritania has also entered into a significant new long-term (25 years) fishing agreement with the Chinese fishing company, Poly-Hon Done Pelagic Fishery. In January, the Mauritanian government suspended this agreement due to contract non-compliance regarding the hiring of Mauritanian workers and infrastructure development. In 2010, a Chinese-backed project to finance a US$300 million expansion of the Port of Nouakchott broke ground with completion expected in 2013.

There have also been significant investments in the telecommunications sector, primarily from France, Morocco, Tunisia, and Sudan. Investors, primarily from the Gulf region, continue to promise major new investments in Mauritania. Some of these include housing and hotels, roads, railways, a new airport, and a new oil refinery. Investment in Mauritania has often been hampered by the lack of infrastructure, most notably water, electricity, and transportation. The current government and donor partners are making infrastructure improvements by increasing power generation, water supply and the construction of paved roads.