member country partnership strategy of the ......mcps for mauritania, 2011-2015 member country...

MCPS for Mauritania, 2011-2015

MEMBER COUNTRYPARTNERSHIP STRATEGY OF THE IDB GROUP

FOR

MAURITANIA2011-2015G / 1432 - 1436H

ISLAMIC DEVELOPMENT BANK GROUP

Rabi Thani 1432H (March 2011)

MCPS for Mauritania, 2011-2015 iii

*The boundaries, colors, denominations and other information shown on any map in this document do not imply any judg-ment on the part of IDB concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

MAP OF MAURITANIA*

MCPS for Mauritania, 2011-2015 v

ABBREVIATIONS and ACRONYMS

ACP : Africa Caribbean PacificADB : African Development BankADER : Agency for Development of Renewable EnergyAFD : Agence Française de Développement (French Development Agency)AICD : Africa Infrastructure Country Diagnostic AMU : Arab Maghreb UnionAPAUS : Agency for Promotion of Universal Access to basic servicesAPSM : Agency for Projects Study and MonitoringBCM : Central Bank of MauritaniaCAS : Country Assistance StrategyCILSS : Comité permanent Inter-État de Lutte contre la sécheresse au SahelCoA : Court of AccountsCPI : Commissariat for Promotion of InvestmentsDRPSS : Regional Health DirectoratesEBA : Everything But ArmsECF : Extended Credit FacilityECOWAS : Economic Community of West African StatesENER : Etablissement National de l’Entretien RoutierEPA : Economic Partnership AgreementEPI : Expanded Program on ImmunizationEPVC : Enquête Permanente sur les Conditions de Vie des MénagesEU : European UnionFAO : Food and Agriculture Organization of the United NationsFDI : Foreign Direct InvestmentsGAVI : Global Alliance for Vaccines and Immunization GAVI : Government Alliance on Vaccinates InitiativeGDP : Gross Domestic ProductGIS : General Inspectorate of the StateGOED : Group Operations Evaluation DepartmentGoM : Government of MauritaniaGPRSF : Growth and Poverty Reduction Strategic FrameworkGPRSP : Growth and Poverty Reduction Strategy PaperHIPC : Highly Indebted Poor CountriesHIV : Human Immuno-deficiency Virus/Acquired Immuno-deficiency SyndromeHMIS : Health Management Information SystemICD : Islamic Corporation for the Development of the Private SectorICIEC : Islamic Corporation for Insurance of Investment and Export CreditIDB : Islamic Development BankIMF : International Monetary Fund IMR : Infant Mortality Rate IMR : Infant Mortality RateIT : Information TechnologiesITAP : Investment Technical Assistance Program

CURRENCYUS$1 = 283.500 UMEuro 1 = 398.074 UM

Rates as of November 10, 2010

MCPS for Mauritania, 2011-2015vi

ITFC : International Islamic Trade Finance CorporationLDMC : Least Developed Member CountryM&E : monitoring and evaluationMAED : Ministry of Economic Affairs and DevelopmentMAED : Ministry of Economic Affairs and DevelopmentMC : Member CountryMCPS : Member Country Partnership StrategyMCPS : Member Country Partnership StrategyMDGs : Millennium Development Goals MDRI : Multilateral debt Relief InitiativeMF : Ministry of FinanceMfDR : Management for Development ResultsMFN : most favored nationMI : Management InformationMICS : Multiple Indicators Cluster SurveyMMR : Maternal Mortality RateMMR : Maternal Mortality RateMOH : Ministry of HealthMOHSA : Ministry of Health and Social AssistanceMoU : Memorandum of UnderstandingMPSMA : Ministry of Public Sector and Modernization of the AdministrationMSEs : Micro and Small EnterprisesNGO : Non Governmental OrganizationODA : Official Development AssistanceOMVS : Organisation pour la mise en valeur du fleuve SénégalPDF : Project Development FacilityPHC : Primary Health CarePRECASP : Projet de Renforcement des Capacités du Secteur Public PRODEC : Program of Education DevelopmentPRODESS : Program of Health and Social DevelopmentPRS : Poverty Reduction StrategyPRSP : Poverty Reduction Strategy PaperRSDS : Rural Sector Development StrategySECF : State Secretary for Promotion of WomenSEZ : Special Economic ZoneSOMAGAZ : Société Mauritanienne de GazSOMELEC : Société Mauritanienne d’ElectricitéSONIMEX : National company for imports and exportsSTR : Special Intervention ProgramTB : TuberculosisTFP : Technical and Financial PartnersTFPD : Trade Finance ProgramTFR : Total Fertility RateUM : Mauritanian Ouguiyas UNDP : United Nations Development ProgramUNFPA : United Nations Population FundUNICEF : United Nations Children’s FundVPD : Vaccine-preventable diseaseWAEMU : West African Economic and Monetary UnionWHO : World Health Organization

MCPS for Mauritania, 2011-2015 vii

ACKNOWLEDGEMENT

MCPS Team

Country Department (Coordinator)

Director : Rami M. Saeed Ahmed

Division Manager : Salah Mansour

Lead Economist : Irfan Aleem

Economist-Country Manager for Mauritania : Rami Abdelkafi

IDB Group Entities and Departments

ICIEC/ITAP : Bessem Soua

ICD : Zakiyoulahi Sow

ITFC : Mourad Bouzrouri

IRTI : Abdelkader Chachi

Human Development Department : El Bashier Sallam

Infrastructure Department : Hatem El Bakkali

Rabat Regional Office : Abderrahman El Glaoui/ Abdelfettah Ouedghiri

Islamic Solidarity Fund Department : Ahmed Maaty

OEO : Abdelhameed Mohamed Bashir

Agriculture Department : Ali Khan

Legal Department : Fathaallah Elguernaoui

Consultant

Agriculture and Rural Development : Abdelkrim Oka

MCPS for Mauritania, 2011-2015 ix

Table of ContentsExecutive Summary .................................................................................................................... xiI. INTRODUCTION ................................................................................................................ 1II. COUNTRY CONTEXT, RECENT ECONOMIC TRENDS AND CHALLENGES ............................. 2 1. Geographical and Socio-Political-Historical Context ................................................. 2 2. Recent Economic Trends and Challenges .................................................................. 2 3. Structural Weaknesses .............................................................................................. 5 4. Key constraints to economic growth in the medium term ........................................ 7III. MAURITANIA’S VISION, DEVELOPMENT CHALLENGES AND PRIORITIES .......................... 10 1. Poverty Reduction Strategy Paper 2001-2015 .......................................................... 10 2. Risks to Government Strategy ................................................................................... 12IV. PAST AND CURRENT INTERVENTIONS OF IDB GROUP AND INVOLVEMENT OF OTHER DONORS ..................................................................................................... ...... 12 1. IDB Group Portfolio in Mauritania ............................................................................. 12 2. Lessons Learned from Evaluation of Past IDB Group Intervention in Mauritania ..... 13 3. Other Donors Involvement in Mauritania ................................................................. 14V. ELEMENTS OF IDB GROUP PARTNERSHIP STRATEGY ........................................................ 15 1. Strategic framework for the Mauritania MCPS .......................................................... 15 2. PILLAR I: Enhancing Human Development through Health ....................................... 16 2.1 Current situation .............................................................................................. 16 2.2 Main Constraints .............................................................................................. 17 2.3 Government’s Strategy For the Health Sector ................................................. 18 2.4 Proposed Interventions (with donors) to Help Government Meet its Goals ... 18 2.5 Suggestions and Recommendations for the Government ............................... 18 3. PILLAR II: Rural Development and Food Security ...................................................... 19 3.1 Current Status ................................................................................................. 19 3.2 Constraints ....................................................................................................... 19 3.3 Opportunities .................................................................................................. 20 3.4 Government Strategy ...................................................................................... 20 3.5 Proposed IDB Group Interventions .................................................................. 21 3.6 Suggestions and Recommendations for the Government ............................... 22 4. PILLAR III: Enhancing and Diversifying the Foundations of a Modern Economy ....... 23 4.1 Private Sector Development / Islamic Finance ................................................ 23 4.2 Trade Finance & Insurance .............................................................................. 26 4.3 Suggestions and Recommendations for the Government ............................... 27 5. Cross-Cutting Theme: Capacity Building .................................................................... 27 5.1 Current situation and Constraints .................................................................... 27 5.2 Government Strategy and Objectives .............................................................. 28 5.3 IDB Group Proposed Strategy .......................................................................... 28VI. RISKS AND UNCERTAINTIES ............................................................................................... 29VII. CONCLUSIONS AND WAY FORWARD ................................................................................ 30

ANNEXES .................................................................................................................................... 31Mauritania at a Glance .............................................................................................................. 33Results Matrix ............................................................................................................................ 34

MCPS for Mauritania, 2011-2015 xi

As part of its new Vision, the IDB Group has embarked on major reforms to improve the efficiency and the effectiveness of its business processes, enhance country-focus and services delivery. The preparation of the current Member Country Partnership Strategy (MCPS) for Mauritania falls under this new vision and new business process. The MCPS is a strategy developed through a process of dialogue with the Member Country with a view to help program Group activities and monitoring their impact.

This MCPS for Mauritania is part of the first set of MCPSs that the IDB Group is launching and reflects the importance that the Group attaches to Mauritania. The rationale for including Mauritania in the first set is that it is in a critical step of its development process after passing through a difficult period marked by external shocks and internal crises, and the country is updating its development strategy. This provides the IDB Group, as a stakeholder with a key interest in achieving Mauritania’s successful development, an opportune moment to form a partnership with Mauritania consistent with its development priorities and the IDB Group 1440 Vision and strategic thrusts.

Preparation of this MCPS was based on extensive consultation with Government, development partners and civil society. During the course of two IDB Group Missions, including ICD, ITFC and ICIEC, the Group consulted extensively with the Government, other development partners, the private sector and civil society including members of the opposition in parliament. This MCPS is based on these consultations.

This MCPS is anchored on the vision and priorities of PRSP III (2011-2015) which lays out ambitious targets for an acceleration of the GDP growth rate from an average of 3.8% during the previous PRSP period (2006-2010) to 5.5%, and almost halving poverty from 42% in 2008 to 25% in 2015 when it only declined by 6% in the previous five years. Child and maternal mortality remain at alarming levels and achievement of the Millennium Development Goals will be a challenge in these areas.

The main driver of growth under the PRSP III is the services sector, projected to generate over

half the targeted growth in GDP, with industry making the second largest contribution of 31%. With private enterprises expected to play a key role in both sectors, the prospects of achieving the targeted growth rate therefore hinge on how private enterprises, especially SMEs, can be encouraged to invest in the face of the structural challenges facing the economy. The weak enabling environment clearly poses a challenge and there is an urgent need to strengthen the fragile banking system to improve access to finance, resolve ambiguities in the legal-regulatory framework including those related to land ownership, and create the necessary infrastructure, especially energy, and transportation. However, the structural challenges facing the economy run deeper.

The MCPS for Mauritania has looked in depth at the reasons for the chronic poverty prevailing in the country amidst large natural resources such as fisheries, oil, copper, iron ore and gold. All the evidence indicates that Mauritania has a unique dual economy structure:

• A subsistence economy supporting more than two-thirds of the population and focused on crop production, livestock management and traditional coastal fisheries,

• A natural resource based modern “enclave” economy using capital-intensive production techniques to produce raw materials (iron ore, gold, copper, oil and deep-sea fishing) with little or no value-added for export markets.

The link between these two economies has been very weak. During the past decade, high and sustained rents from extraction of mineral resources, fisheries and foreign aid have continued to be the main drivers of Mauritania’s economy while the agriculture sectors contribution to growth has been small and the manufacturing sector has still to take-off. In particular, as the value added to raw material exports is limited and given the capital-intensive nature of extraction activities, the demand for labor, the hallmark of the modern sector of developing economies, has been limited or negligible. The economy appears trapped in a situation of high poverty that adversely affects its development - a

Executive Summary

MCPS for Mauritania, 2011-2015xii

situation made worse by external and internal shocks such as droughts.

These and other developments - the difficulty that the country has experienced in making rice production in irrigated areas economic despite immense and dedicated effort by the Government and donors spread over a dozen years - appear to be symptoms of the economy suffering from “Dutch Disease” common to natural resource based economies. International experience suggests that good governance in the management of the natural resource rents is necessary to address this challenge together with human development and diversification of the economy.

To assist the Government address the above mentioned structural challenges, the MCPS mission identified three pillars and one cross-cutting theme in agreement with the Government and other stakeholders supported by a financing envelope of US$ 700 Million. The pillars are:

• Pillar-1: Enhancing Human Development through Health

• Pillar-2: Rural development and food security

• Pillar-3: Enhancing and Diversifying the Modern Economy

The cross-cutting theme focuses on capacity building, including institutional development to enhance absorptive capacity, and is considered a pre-requisite for the effective implementation of this MCPS. It is worth noting that this MCPS also builds on the lesson of experience gained from the implementation of the framework agreement signed between IDB and the Government of Mauritania in 2008. This agreement envisaged spending a similar amount ($700 million) through to 2012 in food security and related investments in (agriculture, livestock and infrastructure in) rural areas, human development with a focus on capacity building, and enhancing infrastructure especially in rural transportation. There is a strong consistency between these components and interventions under the proposed MCPS pillars.

This strategic framework aims to build bridges between the two economies by helping to diversify the modern economy (by improving the enabling environment for private sector development, direct investments to help add value to natural resources, and supporting infrastructure investment), to invest in human capital (through capacity building and

better health outcomes), and to strengthen the rural sector to enhance food security and provide raw materials for agro-processing by the modern economy.

A key feature of this MCPS is to help Mauritania to diversify and enhance its modern economy and strengthen its linkages with the subsistence/informal economy by encouraging and supporting private sector development to facilitate the processing and value addition of the resources it is blessed with. International experience suggests two things. First, from a macroeconomic perspective, the Government should urgently review its policies regarding the management and use of earnings from exports of natural resources and avoid any excessive appreciation of the exchange rate (which can even make investments in irrigated agriculture uneconomic) by smoothening the use of such rents. Second, the Government should take steps to diversify the economy by adding more value to extracted resources before exporting them. The third pillar provides support to the goal of diversification.

To help diversify the Mauritanian economy, IDB Group aims to promote flagship projects that have a long-term impact in key areas such as fisheries, and livestock (dairy, meat and hides) and also help, where it can in processing of minerals. This will require the creation of a business environment, including Islamic Finance, conducive to local and foreign private investment as well as the development of critical economic infrastructure especially roads and energy.

The expected outcomes from the Mauritania MCPS process include a partnership with a strong government ownership of the intervention under the planned five-year program tailored to the vision and objectives underlying PRSP III. In addition, by working in close cooperation with other development partners, and focusing on key constraints to achieving the Government’s development goals in areas where the Group has a comparative advantage, the Group expects to achieve the impact outlined in the Results Matrix. The approach taken in preparing this MCPS, including extensive consultation and the strategy of diversification, will help Mauritania better manage and accommodate unexpected external or internal shocks and improve the quality of IDB Group’s portfolio.

MCPS for Mauritania, 2011-2015 1

I. INTRODUCTION

1. As part of its new Vision 1440H, the IDB Group has embarked on major reforms to improve the effectiveness and efficiency of its business processes and to enhance country focus and services delivery. Preparation of the Member Country Partnership Strategy (MCPS) is a key priority under the reform agenda and designed to be the foundation of the IDB Group’s dialog with Member Countries (MCs). The MCPS sets out a shared diagnosis of the development challenges facing the country, and a selective program of planned IDB Group interventions tailored to meet the country’s objectives taking account of the Group’s comparative advantage and activities of other development partners. The MCPS is results based and includes a monitoring and evaluation framework.

2. The MCPS for Mauritania is part of the first set of MCPSs that IDB Group has launched. The reasons for selecting Mauritania include its classification as one of the Least Developed Member Countries of the IDB Group, a strategic location linking Europe and West Africa, and a country in a critical stage of its development--returning to constitutional order and following a deep political crisis and several decades of external shocks and internal crises. Moreover, Mauritania is in the process of providing guidelines for its new development strategy, and this provides the IDB Group an opportune moment to form a strategic partnership to enhance the impact of its interventions by aligning them with the country’s development priorities.

3. Preparation of this MCPS was based on extensive consultation with Government, development partners and civil society. During the course of two IDB Group Missions, the Group consulted extensively with the Government, other development partners, the private sector and civil society including members of the

opposition in parliament. This MCPS is based on these consultations. It is, however, worth noting that consultations between IDB Group and the Government of Mauritania on priority areas for intervention are part of an on-going dialog. In 2008, IDB and Mauritania signed a framework agreement, which envisaged investments from the Bank totaling $700 million in Mauritania over the period 2008-2012 in three priority areas. The priority areas were (a) food security and investments in agriculture, livestock and infrastructure in rural areas, (b) human development with a special focus on training, vocational literacy programs and small projects (especially in food security) in rural areas, and (c) enhancing infrastructure, especially in rural transportation.

4. This MCPS identifies the priorities for IDB Group assistance taking into account the opportunities and challenges facing the Mauritanian economy in the medium term. The proposed strategy for 2011-2015 derives from a diagnosis of the main constraints to economic growth facing Mauritania (based on data and analyses obtained from the Government and development partners during the main MCPS mission) and a shared understanding of interventions to address these constraints. This consultative process has led to the selection of three main areas where future IDB Group interventions could have a significant impact on Mauritania’s economy: human development with a focus on health, rural development and food security, and diversification and enhancement of the modern economy.

5. The structure of this report reflects its design as a strategic partnership. Section II presents the country context and examines development challenges and constraints the country faces. Section III outlines the vision and development strategy of the Government of Mauritania and assesses the risks to its

MEMBER COUNTRY PARTNERSHIP STRATEGY - MAURITANIA


implementation. Section IV reviews IDB Group’s past and current interventions in Mauritania and describes involvement of other partners. The main elements of the proposed IDB Group strategy are in Section V, which develops the different pillars underpinning this strategy. Section VI presents risks in the implementation of the strategy and measures taken to mitigate them. Finally, Section VII presents the conclusions, including next steps.

II. COUNTRY CONTEXT, RECENT ECONOMIC TRENDS AND CHALLENGES

1. Geographical and Socio-Political-Historical Context

6. Located in the western edge of the Sahara desert, Mauritania forms a key link between three strategic areas -- West and Central Africa, the Arab Maghreb Region and Europe. A former French colony, Mauritania gained independence in 1960. It has a small population of over 3 million but a land area (of 1 million square kilometres) larger than Pakistan and twice that of France. With most

of the land area a desert, about two-thirds of the population lives in the south in rain-fed agro-pastoral areas and in the thin sliver of irrigated land along the Senegal River on the border with Senegal. Desertification and drought have led to migration from rural to

urban areas and about a million now live in the capital, Nouakchott. While the immense desert contains mineral resources, it is also a source of security concerns for Mauritania (including illegal immigration and drug trafficking).

7. Since independence, Mauritania has experienced significant political instability with a large number of coups d’état. Political instability has constrained private investment and development. The last coup d’état in August 2008 led to a freeze in international support to Mauritania. However, following the Dakar agreement signed by all political parties, General Abdel Aziz retired from the military and held elections in July 2009, leading to his return as President under constitutional rule.

2. Recent Economic Trends and Challenges

8. During the past decade, high and sustained rents from extraction of mineral resources, fisheries and foreign aid have continued to be the main drivers of Mauritania’s economy while the agricultural sectors contribution to growth has been small and the manufacturing sector has still to take-off. Between 1990 and 2008, agriculture (excluding livestock) stagnated at a mere 3-5% of GDP, while manufacturing (small industries and craft) averaged 7% of GDP over this period and had shrunk to only about 5% of GDP by 2008. Industry (including mining and


construction) accounted for 48% of GDP in 2008 and services for 42%. Mauritania had a GDP of $3.0 billion in 2009 and a GDP per capita of $975 which classifies it as an LDMC.

9. Economic Growth during 2004-2008 was moderate, averaging 5.5%, supported by prudent economic management, structural reforms and a surge in oil production in 2006. Thanks to sound macroeconomic policies—in particular fiscal reform including enhanced transparency and decentralization of financial control, and improved monetary management through Central Bank capacity building and exchange rate management—inflation dropped from 16.1% at end 2004 to 8.9% at end 2006 and to 7.3% in 2008. Structural reforms in this period included a new code for public procurement and steps to enhance the independence of the central bank. Expectations related to oil exploration drew an important inflow of foreign direct investment in 2004 and 2005 and the accompanying surge in oil helped Mauritania achieve an 11% growth rate in 2006. However, the surge in oil production proved to be short-lived and revision of these expectations downward and technical problems prevented the country from sustaining FDI inflow at a high level and lowered the growth prospects.

10. Economic performance deteriorated in 2008-10 due to domestic and external shocks and, as a result, economic growth during the PRSP II period 2006-2010, averaged 3.7%, well

below plan projections of 9.4%. The global food and fuel price increases in 2008 weakened the external account--the current account deficit in 2008 reached 15.5%--and kept inflation at 7.3%. The external shocks coincided with the last coup d’état in August 2008 and an associated drop in donor financing--the IMF program in the form of a Poverty Reduction and Growth Facility was also interrupted following the military coup--weakening economic activity in the mining, fishing, and the construction sectors. The global economic slowdown in 2009, and the unexpected decline in oil production, contributed to further fiscal and balance of payments pressures. There was a decline in the prices of and the demand for Mauritania’s main export commodities (iron, copper, and fish). The anticipated shift to an oil-economy also did not take place and by 2009, the average oil production was only 10,740 barrels/day instead of the initial estimate of 75000 barrels/day in 2006. Because of these developments, average GDP growth slowed to 3.7 percent during 2006-10 (based on updated official figures contained in PRPS III) well below projections of 9.4 percent contained in PRSP II.

11. Mauritania imports most (70%) of its food requirement and international food prices increases in 2008 directly affected national prices. For example, the share of food expenditures in total households’ expenditures increased from 51.9% in 2004 to 57.8% in 2008. In response to this situation, the government adopted the Special


Intervention Program (SIP) amounting to about US$ 194.2 million. The SIP, representing 15% of total public spending, increased the public deficit by 1% and helped to avoid social unrest although its effectiveness in alleviating food insecurity is not clear—see Section V—and inflation fell to 3.9% (by yearend) in 2008, in comparison with 7.4% in 2007.

12. Poverty declined between 2004 and 2008 but remains high and is mainly a rural phenomenon. Poverty incidence has declined from 47.6 percent in 2004 to about 42 percent in 2008 (Figure 3). The percentage of population living in extreme poverty in rural areas increased from 39.1% in 2004 to 40.8% in 2008. Recent domestic and external shocks have likely slowed progress on poverty reduction, highlighting the need to protect social spending and develop appropriate safety nets for the most vulnerable segments of the population. In fact, the poverty rate increased marginally in rural areas over the period 2004 - 2008 (from 59% in 2004 to 59.4% in 2008).

13. Poverty is more pronounced among households headed by persons employed in the agriculture sector and is increasing with the household size1. Data show that households headed by people employed in agriculture (including livestock) are the most affected by poverty, followed by those employed in the transport and communication sector. However, households headed by public sector wages-earners are less exposed to poverty.

1According to the EPCV 2008.

14. There was a progress in the social sectors, but the achievement of the Millennium Development Goals (MDGs) remains a key challenge. Mauritania ranked 154 out of 182 countries according to the Human Development Index in 2009. Overall, the most important deficiencies in the progress toward the achievement of the MDGs in Mauritania are related to health, environment, employment and some gender indicators (UNDP 2010). Table 1 shows that although Mauritania is likely to meet its MDG relating to access to water, it faces challenges in meeting the MDGs particularly related to maternal and child mortality.

15. As in other countries, food insecurity is associated with poverty and remains one of the most important causes of malnutrition in Mauritania. Based on FAO estimates, 29% of Mauritanian households were food insecure in 2008. Almost half of households do not have access to safe drinking water and diarrheal diseases, malaria and acute respiratory infections still claim the lives of many young children. The underperformance of the agriculture sector, characterized by an under exploitation of arable lands and slow progress of irrigation, is an important cause of food insecurity. In addition to the hard climate conditions, weak productivity of rural sector has exacerbated the threats of food insecurity on the Mauritanian economy. Land degradation, weak mechanization, high production costs, low access to agricultural loans, absence of loans devoted to livestock activities and lack of supports to commercialization are among the main factors contributing to these low productivity of the rural sector.

16. More recently, lower food and fuel prices accompanied by the normalization of relations with the international community have helped cushion the impact of the global economic slowdown on the external position. The current account deficit was 12.7 percent in 2009, down from 15.7 percent in 2008. The decline in exports was more than offset by a marked reduction in imports, reflecting the contraction in economic activity, lower world food and fuel prices, and the foreign exchange rationing. The resumption


18. The share of agricultural (including livestock production) in GDP has been declining, despite its high potential, while manufacturing activity remains at a nascent stage. In the PRSP II, the Government emphasized the importance of improving the performance of rain-fed agriculture given its important role in reducing poverty in these areas. However, as noted above, agriculture, including livestock production, has not been performing well: the contribution of the traditional sector (agriculture and livestock) to GDP decreased from 31.2% in 1970-1974 to 20.4% in 2000-20042 - see Table 2. The underlying trends are even more clearly visible if we separate agriculture and livestock production. As shown

2World Bank, 2005.

TABLE 1: Millennium Development Goals

Sector 1990 1996 2000 2002 2004 2008PRSP MDGs

2010 2015 2015

(Per 1,000 live births)

Reduce child mortality

Child mortality (under five years) 129.5 125.6 122.0 … … … 128.0 55.0 45.7

(Per 100,000 live births)

Improve maternal health

Reduce the rate of maternal mortality … … 747.0 … 820.0 820.0 400.0 300.0 …

(In percent of ages 15-24)

Combat HIV/AIDS, malaria , and other diseases

Reduce by half the prevalence of HIV/AIDS … … 0.5 0.6 0.5 … < 1.1 < 1 1.0

(In percent of population)

Ensure environmental sustainability

Access to improved water source 37.0 40.0 50.0 … 52.0 62.0 65.0 75.0 …

Access to electricity … … 18.0 … 24.0 30.6 … … …Source: IMF 2010.

of donor financing after the July 2009 election and the disbursement of financial compensation under the European Union (EU) fishing convention helped maintain the level of gross international reserves at 2.2 months of imports at end-December 2009. The Central Bank of Mauritania (BCM) restored the foreign exchange auction system in mid-December 2009. Following this restoration, and an agreement on a new program of reforms, the Government reached an agreement with the IMF for an Extended Credit Facility (ECF) in the amount of SDR 77.28 million and the first tranche from this facility was released in March 2010.

3. Structural Weaknesses

17. Mauritania has a low saving rate and almost all investment is financed from abroad (Figure 4). Over the period 1997-2007, the saving rate (1.53% of GDP) in Mauritania was well below the average in its comparator countries. Investment has been fair robust, however, at 21% of GDP, but driven largely from rent stream. The increase in investment between 2003 and 2007 was not followed by an increase in saving, this rate was even negative (-15% of GDP) in 2005. Since 2006, the impact of oil revenues on investment has been visible with a pick of 18.76% of GDP reached in 2006.


in Figure 5, on average, the share of agriculture in GDP averaged only 3.7 percent of GDP during 1991 – 2008. Livestock has had a more stable and significant contribution to growth – an average of 13 percent of GDP during 1991 – 2008, but the sector has been shrinking since 2000, attaining 11 percent of GDP in 20083. The performance of manufacturing (small industry and crafts) is not very different from agriculture and in 2008 it accounted for about 5% of GDP.

19. Demand for labor in the formal economy (public and private) is low, relative to the size of the labor force, the overwhelming majority of which (85%) work in informal sector jobs. As shown in Table 3 and Figure 6, the modern productive sectors - mining and manufacturing - provide employment to only a small share (9%) of labor force. The official unemployment rate in 2008 was 32%. This high unemployment rate disproportionately affects the young population less than 25 years old. Moreover, education level does not appear to contribute to reducing this rate, since 34.5 percent of the labor force with secondary education and 16.5 percent for those with tertiary education are unemployed. Nationwide, the commercial sector (consisting

3World Bank, 2010, Country Economic Memorandum.

of “services” and “retail”) is the main supplier of job opportunities (24.6%) followed by agriculture (including livestock) which employs 20.4% of the active population (EPCV 2008).

20. Mauritania is highly dependent on foreign aid (see Figure 7). Official Development Assistance (ODA) received as percentage of National Income increased from 3.83% in 1970 to 27.39% in 1986 and to 28.03 in 2002. The negative effects of the cessation of aid flows following the political crisis of 2008, as noted above, gives an idea of

TABLE 3: Demand for Labor by Sector

Formal Sector Informal Sector

(in percent) (in percent)

Agriculture 1.5 30.0

Livestock 1.0 7.5

Fisheries 2.3 2.7

Mining 8.2 0.4

Manufacturing 1.1 2.3

Construction 0.9 4.0

Transport 2.3 3.8

Retail 1.5 27.0

Services 11.3 9.8

Public Administration 61.2 2.0

Other 8.7 10.5

Total 100 100Source: EPCV, 2004.

TABLE 2: Sectoral contribution to GDP (%)

Sector 1960-64 1965-69 1970-74 1975-79 1980-84 1985-89 1990-94 1995-99 2000-04

Agriculture 43.1 31.1 31.2 29.3 31.6 29.2 28.1 25.1 20.4

Manufacturing NA NA NA NA NA 12.6 11.5 10.4 9.0

Source: World Bank 2005.


the vulnerability created by the dependency on aid. Foreign aid has also reduced the incentives to improve the efficiency of public policies. Social and governance indicators show that natural resource rents and aid flows have not efficiently contributed to economic development in Mauritania. In 2006, for example, Mauritania devoted only 2% of its GDP to education, while this share reached 6% of GDP in Morocco. Foreign aid has also many similarities to rents from natural resource extraction and thus has added to governance issues, as reflected in Table 4 which shows Mauritania poor performance relative to its neighboring countries in the region.

4. Key Constraints to Economic Growth in the Medium Term

21. The lack of progress in developing human capital is a critical medium- and long-term constraint to development in Mauritania. As noted above Mauritania ranks low (154 out of 182 countries) on the Human Development Index in 2009. Recent domestic and external shocks have slowed growth and progress on poverty

reduction and with it, many related aspects of human development, despite some achievements in other goals, mainly in basic education. Thanks to the support of the international community, Mauritania has been able to achieve some progress in fighting against HIV/Aids, Tuberculosis and Malaria. However, maternal and infant mortality rates are alarming as noted above. Also while there have been important achievements in the area of basic education, there remain pronounced disparities between regions--the gross enrolment rate in basic education in rural areas (estimated at 79.6% in 2008) is still below that in urban areas (estimated at 108.5%). The population in poor regions or “Wilayas” has half the enrollment in their richer counterparts. At the same time, the key role played by manufacturing sector in capacity building and skills development is conspicuous by its absence in Mauritania given the negligible size of this sector and the lack of employment opportunities, as noted above.

22. The extraction of natural resources (iron ore, fisheries and recently oil) purely for obtaining rents without further processing or added value limits the benefits to the rest of the economy. Almost all export earnings in Mauritania emerge from the extraction and export of natural resources –iron ore, copper, gold, oil, and fisheries—and primarily from iron ore and fisheries—see table 5. This has created a high and sustained level of economic rents. However, this created several challenges. First, the existence of the windfall income has helped increase Government revenue, it has also created well-known governance problems associated with the lack of transparency and the distribution of these rents as noted by analysis done by independent

TABLE 4: Governance Index

Rule of LawRegulatory

QualityGovernment Effectiveness

Political Stability No

Violence

Voice and Accountability

Overall Index

2009 1996 2009 1996 2009 1996 2009 1996 2009 1996 2009 1996

BURKINA FASO -0.3 -0.3 -0.1 -0.2 -0.7 -0.9 -0.1 -0.2 -0.3 -0.3 -1.9 -2.2

MALI -0.4 -0.6 -0.4 0.1 -0.8 -1.5 -0.3 0.7 0.2 0.7 -2.4 -1.0

MAURITANIA -0.8 -0.9 -0.7 -1.1 -0.9 .. -1.2 0.6 -1.0 -1.0 -5.2 -2.4

MOROCCO -0.2 0.1 0.0 0.3 -0.1 0.2 -0.4 -0.5 -0.8 -0.6 -1.7 0.0

TUNISIA 0.2 -0.2 0.1 0.7 0.4 0.5 0.2 0.0 -1.3 -0.9 -0.3 -0.1Source: World Bank 2010.


observers –see table 4. Second, as noted above, Mauritania has simply been extracting these resources without adding much value thus limiting the size of its manufacturing sector and with it employment opportunities. Third, the dependence of the country on two main types of natural resources (iron ore and fisheries) has created vulnerability to external shocks. In 2010, the signs of recovery of the economy are mainly due to the performance of the iron ore sector.

23. Poor performance of the agriculture and livestock production -- the main sources of livelihood for households in rural areas. The challenges faced by the Mauritanian farmers in making irrigated rice production profitable after more than a decade of efforts and investments reflects additional challenges. Farmers in rain-fed areas face the additional challenge from droughts and desertification, as noted above. The poor performance in agriculture over the past two decades, as already noted above, has occurred despite the large amounts of foreign aid directed to this sector. In 1994, 58% of foreign aids was allocated to rural and agriculture development (mainly for irrigation)4 and some important projects were implemented including the Programme de Développement de l’Agriculture Irriguée en Mauritanie (PDIAIM) supported by the World Bank.

24. Absence of an enabling environment for private sector development: The development of industries outside natural resource extraction faces several constraints in Mauritania. The small

4http://www.ifad.org/evaluation/public_html/eksyst/doc/country/pa/mauritania/cesmr98f_1.htm.

size of the local market, poor infrastructure (roads, ports) and the high cost of water and electricity, shortages in skilled labor, weaknesses in the regulatory environment and lack of access to financing are among the main constraints to the development of Mauritanian industry. The poor enabling environment makes Mauritania unattractive for investors including both foreign and local including SMEs. It is clear that oil and iron ore exploitation were the main beneficiaries of the increase of FDI flows in 2004-2005 periods (see figure 8). This has exacerbated the unemployment situation as noted above. In addition to the weak demand for labor, the skills mismatch problem is also a critical constraint pointing to the need to improve skills and raise the low productivity.

25. All the evidence indicates that Mauritania has a unique dual economy structure:

• A subsistence economy supporting more than two-thirds of the population and focused on crop production, livestock management and traditional coastal fisheries. Despite the massive exodus of the population from rural to urban areas mainly to Nouakchott (5% in 2008 against 60% in 1960)5, following recurrent food crises (drought, locust invasions), two-thirds of the population still lives in and around the rain-fed agro-pastoral areas in the south.

• A natural resource based modern “enclave” economy using capital-intensive production techniques to produce raw materials (iron ore,

5FAO et Programme Alimentaire Mondial, 2008, «Mission inter-agences de consultation avec le Gouvernement et les partenaires au développement».

TABLE 5: Exports Composition (% of Total Exports)

2009 1996 2009 1996 2009 1996

Iron Ore 57.9 59.83 68.58 35.88 41.27 34

Gold na na na 0.13 2.80 16

Copper na na na 0.44 12.58 14

Oil na na na 50.05 25.02 10

Fisheries products

41.92 39.87 31.41 13.5 18.31 26*

*For 2011 estimates the number for fisheries includes earnings from licenses.Source: CMAP 2010.


gold, copper, oil and deep-sea fishing) with little or no value-added for export markets. The two economies are disconnected and the spillover effect seen in most developing countries (without a high dependence on natural resource rents) has not taken place.

26. This unique economic structure has produced mixed results: On the positive side, the enclave economy has provided high and consistent rents that have allowed the Government to finance development activities including infrastructure for irrigated agriculture. On the negative side, the enclave economy has only limited links with the subsistence economy. In particular as the value added to raw material exports is limited and given the capital-intensive nature of extraction activities, the demand for labor is negligible.

27. Even worse, the economy reveals the classic symptoms of suffering from the well-known “Dutch disease” common to natural resource based economies. The “Dutch disease” effect, which arises in economies enjoying large and sustained rents from extraction and export of natural resources (see figure 9), leads to an appreciation of the exchange rate, which undermines the competitiveness of investments in manufacturing and commercial agriculture. The effect works through an appreciation of the exchange rate which reduces the viability of investments in tradable goods. The latest consistent IMF data series available on the real effective exchange rate (REER) for the past

decade 2000-2010 is supportive of this view and shows the REER remaining fairly constant despite the country running large current account deficits - see figure 10. This graph includes the post 2006 period for which the IMF feels the data is most reliable. It shows the REER remaining fairly constant between 2006 and 2010 at a time when current account deficits were exceptionally large (-18.3 % in 2007, -15.7 % in 2008 and -12.7


% in 2009). The short-lived oil boom in 2006-2007, which accounts for only a small share of the natural resource rents accumulated during several decades, seems to have had little effect on the REER.

28. Evidence of “pronounced Dutch Disease effects” during the three decades from 1970 -2000 has also been noted in independent analysis6 focusing on governance issues arising from windfall gains. This assessment is based on evidence indicating: (a) stagnation in the share of agriculture (including livestock) with its 2004 share in GDP of 16 percent “barely half that expected for a country at Mauritania’s level of development” and noteworthy for a country with “150,000 irrigable hectares which, with improved livestock management and roads to access markets, could lift agriculture’s share of GDP above the expected one-third level”, (b) manufacturing is “two-thirds the size expected”, and (c) the remarkably low commercial farm output has cut the agricultural sectors capacity “to stimulate agro-processing”. The root cause of this economic stagnation is attributed to a “rent driven economy” which in the three decades received sustained high rents from iron ore extraction, fishing and aid amounting to “one-third of GDP” and with political allocation of the rents, encouraged by lack of transparency and poor governance.

29. It is vital that the Government develops a strategy to manage economic rents from natural resources extraction to mitigate the adverse economic effects of long-term exchange rate appreciation and strengthen the links between the two economies. It can do this by among other things: (i) Moving towards more value-added production in all areas where it has a comparative advantage in terms of resources—fisheries, livestock, mineral ores, and oil. (ii) Addressing other constraints to enhancing linkages between the two dual economies for example human development and capacity building; and (iii) Facilitating investment in activities such as construction, that is less vulnerable to exchange rate appreciation.

6See “Aid and Rent-Driven Growth: Mauritania, Kenya and Mozambique compared, Richard M. Auty, 2007.

III. MAURITANIA’S VISION, DEVELOPMENT CHALLENGES AND PRIORITIES

1. Poverty Reduction Strategy Paper 2001-2015

30. The PRSP (2001-15) sets out the vision of Mauritania as a politically stable and democratic country, which transforms itself into a decentralized and modern state, well integrated with the regional and global economy on the path of sustainable economic and social development. The Government is implementing this vision through multi-year action plans the latest of which, PRSP III covering the period 2011-2015, is in the final phase of preparation following consultation with civil society, private sector and development partners. PRSP III has been designed taking account of the lessons learnt from the implementation of PRSP II and I (see Box 1).

31. For PRSP III, the Mauritanian government intends to maintain the objectives set in the two previous PRSPs. PRSP III outlines development priorities and interventions in a five-year action plan, clustered around four strategic objectives outlined below with increased emphasis on private sector development, monitoring and evaluation and donor coordination as a cross-sector theme.

i. Acceleration of Growth and Stabilization of Economy: The Plan will meet this objective through interventions designed to stabilize macroeconomic balances, improve the business environment for private sector development, support sectors with a potential for high growth, and reform the state owned enterprise sector to facilitate fiscal consolidation.

ii. Anchoring Growth in the Economic Sphere of the Poor: The Plan aims to achieve this objective through interventions that support rural development, target pockets of urban poor, promote microfinance and SMEs, enhance food security, reduce environment degradation and reorient policies to focus on targeted poverty reduction programs. Expected outcomes of these interventions are an increase in the contribution of rural sector


to growth from 0.6% during the PRSP II period to 1% in the third plan period; and meet 50% of the cereal needs of the population through local production.

iii. Development of Human Resources and Provision of Basic Services: The action plan calls for human resource development and increased access to basic services as an important determinant of poverty reduction. Priority areas for action include improving education access and quality, health care and nutrition, employment opportunities, water and sanitation, child and women advancement, and ensuring universal access to basic services.

iv. Improving governance and Capacity Building: The Plan highlights strengthened governance and capacity building as critical for achieving the objectives of the PRSP. It places special emphasis on curbing corruption and improving transparency of government operations. To enhance effectiveness of government plans, it stresses the need for capacity building in relevant parts of the public and private sectors and civil society.

v. Monitoring, evaluation, and coordination of PRSP III action plan has been enlisted as a cross cutting axis to support the core objectives of the strategy. The Plan calls for strengthening the institutional system for implementation and follow-up of the strategy, enhancing the monitoring, evaluation, and reporting systems.

32. PRSP III lays out ambitious targets as outcomes by the year 2015: (i) the GDP per capita to reach US$ 1374 by 2015 (compared with US$ 1096.3 in 2010), driven by an average GDP growth rate of 4.7% (compared with 3.8% during the previous PRSP period, 2006-2010), and an investment rate (as % of GDP) at 28.1% (compared with an average investment ratio of 19.4% in the previous PRSP period); (ii) the incidence of poverty to decline from 42% in 2008 to 25% in 2015 (with rural poverty to fall to 35% from about 60% in 2008), (iii) an average inflation rate of 5%, (iv) universal access to basic education and an illiteracy rate of 15% among population aged 15 years and up, (V) provision of full health coverage within a radius of 5 km, reduce the infant mortality rate to 40 ‰, the child mortality rate to 55 ‰ and the maternal mortality rate to less than 300 per 100,000 and reverse the progression of HIV / AIDS, with prevalence in the general population of less than 1%, and (v) increase the rate of connection to water supplies (rural and urban) to 74%.

33. The main driver of growth, under the Plan is the services sector. The Plan projects the services sector to generate over half (51%) of the targeted 5.5% growth in GDP. In achieving this outcome, it expects private enterprises to play a key role especially in the following service areas: transportation, telecommunication, commerce,

Box 1:Lessons Learnt from the Implementation of PRSPII

While progress was made in fiscal management and judicial system, the results from PRSP II show that it failed to achieve the ambitious goals originally set. Progress was made in the management of both the expenditure system and the tax system, while reforms were made to improve and streamline the civil administration system. Further, while investments were made in rural areas, they did not have a significant impact in developing the rural sector or curbing unsustainable migration to urban centers. Poverty increased in rural areas and economic growth has averaged 3.3% excluding oil and 3.8% including oil, about half of the initial target of 8.4% for the 2006-2010 period.

The implementation of PRSP II faced several constraints. It was implemented over the 2007-2009--a period where both the national and international environment was not favorable for the achievement of PRSP II objectives. Among other things, the food crisis has significantly contributed to maintaining poverty at alarming levels. Moreover, oil production and revenue were below expectations and had a significant impact on financial resources available for achieving the various government programs. In addition, there is a need to mention the suspension of funding by several donors during the political crises of 2006 and 2008.

Although part of the PRSP II objectives, monitoring and evaluation did not take place throughout the implementation. The absence of information systems, lack of human resources and lack of coordination within government and between government and its partners have also strongly contributed to the failure of the PRSP II.


hotel business, and banking and insurance. Industry provides the second lead contribution (31%) followed by the primary sector (18%). The growth in industry hinges on the development of iron ore project, Guelb II, government investments in construction, electricity sector reform, and improvement in business climate. Agriculture sector, on the other hand, depends on improved irrigation and focused investment to develop livestock, fisheries, and rural businesses. Table 6 highlights the expected real GDP growth under PRSP III.

2. Risks to Government Strategy

34. There are several risks to the Government development strategy. First, the weak capacity of public agencies will hamper efficient implementation. Weak governance and policymaking framework will lead to a disconnect between the PRSP development framework and actual investment by the public sector. Also going from PRSP to actual budget formulation calls for close coordination between local regional and national policies. The Government is aware of this risk but it is unclear if the planned mitigation measures under PRSP III will prove adequate.

35. Secondly, there is a large funding gap for implementing PRSP III. The Government only has resources to fund less than half of the financing requirement of UM 1338 billion. It is unclear how the large resource gap is to be covered. The document indicates that the Government is looking to public-private partnerships to help close this gap. However, given the status and rate of private sector development in Mauritania, the prospects of the private sector providing such large amount of funding pose serious challenge for the implementation of PRSP III.

36. Thirdly, given that there are already indications that country is suffering from ‘Dutch-disease’ phenomenon, it might have negative implications on development efforts of the

Government. The rise of services sector and decline in manufacturing and agriculture over the years points to affects the unlinked dual economy is having on the pro-poor sectors. Without appropriate strategy to neutralize the affects of capital flows as a result would undermine Government efforts to develop these sectors.

37. Fourth, the Plan does not take account of the “Dutch Disease” effect, which the economy appears to be suffering from. This creates the risk that the planned drivers of growth may not materialize as expected.

38. Lastly, the Plan indicates that the Government is fully aware of the risks posed by external shocks but it offers no concrete measures to mitigate these risks. Change in commodity prices in international markets, and natural disasters such as drought, flooding, and locust attacks have hampered the economic development in the past.

39. On the upside, there are two uncertainties. First, the country may be successful in finding new resources from on-going exploration activities, which will help to create windfalls that will improve the fiscal balances, and attract foreign capital. Secondly, and more important for poverty reduction, Mauritania may be successful in establishing a closer link between the enclave mineral sector and the rest of the economy. This will help to accelerate growth and development. Table 7 shows a higher growth scenario based on a simple economic model, where both factors come into play.

IV. PAST AND CURRENT INTERVENTIONS OF IDB GROUP AND INVOLVEMENT OF OTHER DONORS

1. IDB Group Portfolio in Mauritania

40. IDB Group total financing approval for Mauritania has reached US$ 672.6 million. Total cumulative approvals of IDB project finance and

TABLE 6: GDP Growth Rate (Base Scenario)

Base Scenario; PRSP III 2008 2010 2011 2012 2013 2014 2015

GDP Growth 3.7% 4.6% 5.2% 5.4% 6.0% 5.4% 5.5%

Poverty Incidence 42% 35% - - - - 25%


TABLE 7: High Growth Scenario

2010 2011 2012 2013 2014 2015

GDP Growth 4.6% 5.9% 6.2% 8.6% 7.1% 5.9%

technical assistance operation for Mauritania since inception now exceeds ID 337.57 (approximately US$ 481.23 million). Since Mauritania joined the IDB as a founding member in 1974, the Group has approved 90 operations and 6 special assistance projects. The industry and mining sector has received the largest share of financing, around 25% of total approvals by value while transport and communications, and agriculture received 20% and 19% respectively. Out of the 90 operations, 57 have been completed, representing about 30% of the approved amount, and 33 operations are under implementation.

41. Mauritania has also benefitted from the IDB Group’s trade finance operations. The Group has approved a cumulative total of US$ 117.5 million since the start of the trade-financing program. In 1429H, ITFC approved one syndicated operation for the Government of Mauritania amounting US$ 43 million, however the latter was cancelled due to the withdrawal of participants. The main beneficiary from trade finance operations since inception is the Government of Mauritania.

42. ICIEC has been supporting Mauritanian exports & imports since inception of its operations. In fact, ICIEC issued 1 credit insurance policy to a bank in Mauritania in the past for the amount of US$ 10.2 million. It has also issued an approval on a financing operation involving supply of goods from Mauritania to a

buyer in Senegal for the amount of US$ 0.283 million. Approvals issued by the Corporation to cover imports made by Mauritanian importers amounted to US$ 0.4 million, in addition to the amount of US$ 11.5 million in approvals issued to cover confirmation of L/Cs issued by Mauritanian banks. Regarding investment insurance, ICIEC has received an application from an investor from Belgium to cover his investment in an agricultural project in Mauritania, for the amount of US$ 14.7 million, while no application was received from Mauritanian investors to cover investments abroad. In 2008, ITAP prepared and designed an Investor’s Guide booklet in favor of the “the Commissariat à la Promotion des Investissements” (CPI). In addition, ITAP conducted a need assessment mission to Mauritania in April 2010 to explore ITAP’s possible intervention in supporting the Mauritanian investment promotion agency. As an outcome of this mission, a technical assistance program for CPI is currently under preparation by ITAP.

43. ICD has also been active in supporting the private sector in Mauritania. Up to date, ICD has approved four operations for a cumulative amount of US$ 56 million. Recently, a memorandum of understanding was signed between ICD and the GoM for the participation in the development of economic zones for attracting foreign direct investments. Two new operations are under study by ICD.

2. Lessons Learned from Evaluation of Past IDB Group Interventions in Mauritania

44. In general, the main lessons from implementation of IDB projects in Mauritania relate to: (i) weak capacity of Executing Agencies slow project implementation, (ii) delays in the signing and fulfillment of effectiveness conditions of financing agreements, (iii) delays in the procurement process; (iv) insufficient knowledge of IDB procedures.


45. The project formulation should take into consideration the establishment of enhanced PIUs, for overcoming the technical/financial weaknesses of some executing agencies. While IDB’s experience in dealing with the different executing agencies was considered as satisfactory overall, the institutional capacity of some of them needs to be strengthened to enable them to perform close supervision and follow-up of their respective projects.

46. To improve development outcomes, more importance should be given by IDB to quality at entry especially readiness of the projects for implementation. More emphasis should

be placed during appraisal and negotiation of relevant memoranda of understanding (MOUs) to clearly define all modalities of project implementation, operation and maintenance. The beneficiary population should also be involved at early stages of the projects to facilitate ownership and sustainability of the facilities, especially for the irrigation and health sector projects.

47. To enhance the development of the private sector through lines of financing, project design needs to address more effectively the issue of foreign exchange risk. This is a critical path for future IDB’s interventions given the potential in terms of trade financing and investment.

TABLE 8: Other Donors Involvement in Mauritania

Donors Priority AreasPledged Amounts

PRSP II PRSP III

World Bank - Economic governance and public sector capacity

- Diversifying growth- Fighting poverty and inequalities

US$ 388 Million (pledged during the 2007 Consultative Meeting)

AfDB - Economic and financial governance- Agriculture and agro-industries- Transport- Water supply and sanitation- Education

AFD (French Development Agency)

- Access to basic services and developing and protecting rural areas

- Sustainable management of fisheries resources- Supporting productive sectors

European Commission - Water facilities- Energy- Food Security- Human rights, justice and security- Fisheries- Support to SNIM

Euro 156 Million (pledged during the 2007 Consultative Meeting)

The Government of Libya - Health (the construction of 10 health centres is under study + Hospital in Rosso)

- Education (construction of a university in Kiffa)- Tourism- Telecommunications

US$ 500 Million

Arab Funds

- The Kuwait Fund for Development

- Education- Water- Technical Assistance- Infrastructure

US$ 100 Million

- The Saudi Fund for Development

US$ 100 Million

- The Arab Fund for Economic and Social Development

US$ 500 Million


3. Other Donors Involvement in Mauritania

48. Following the return to constitutional rule in Mauritania in 2009, the donor community has re-affirmed its commitment and support for the on-going development program (PRSP II 2006-2010) and its planned extension (PRSP III 2011-2015). The donor meeting in Brussels in June 22-23, 2010 re-confirmed this sentiment. The involvement of the main donors in support of PRSP II (ongoing) and PRSP III is outlined in Table 8 in terms of main priority areas and amounts pledged or committed.

V. ELEMENTS OF IDB GROUP PARTNERSHIP STRATEGY

1. Strategic Framework for the Mauritania MCPS

49. The main MCPS mission, following a field visit to a rural area near the town of Rosso, and extensive consultation with development partners raised the following important questions:

• Why is the economy stuck in a trap with two-thirds of the population living in poverty after 50 years of receiving high and sustained rents from natural resource extraction?

• Why was there a complete failure of the last PRSP action plan?

• Why rice production in irrigated areas is apparently uneconomic despite immense and dedicated effort by the Government and donors spread over a dozen years?

• Why is there an absence of investment in manufacturing despite a clearly talented entrepreneurial class limited to the provision of services?

• Why is there an absence of a linkage between the high tech capital-intensive investments in deep-sea fisheries, iron ore, copper, oil and gold extraction and the rest of the traditional economy -- the normal route for capacity and skill development in most developing countries?

• Why are we having serious implementation problems with our projects?

50. It was clear that our earlier framework relying largely on the small size of the economy, external shocks, and political instability–factors common to many LDMCs less endowed with resources than Mauritania and arguably doing better -- could not provide satisfactory answers to these questions.

51. As a result, the mission decided to shift to the use of a new strategic framework, which depends on structural factors to provide a more credible insight to many of the above questions. This revised framework, outlined above in Section II, depends on the use of a unique “dual economy” economic structure in which a subsistence economy co-exists not with a modern economy (the norm in most of our member countries) but a natural resource based enclave economy and with which it has limited linkages. Further, dollar rents from the enclave economy undermine the viability of investments in the subsistence economy through exchange rate appreciation -- the well-known “Dutch disease” effect. Clearly, other factors contribute to the problems facing Mauritania such as political instability, the small size of the economy and the century’s told tradition of herding and coastal fishing rather than agriculture. However, on their own these factors cannot adequately explain the current reality in Mauritania.

52. Consistent with the above-mentioned structural constraints, this MCPS is based on three pillars and one crosscutting theme, to focus on the need to better manage economic rents from natural resource extraction and by adding-value to extracted resources and strengthening the links between the enclave and the subsistence economies. These pillars are (i) human development, with a focus on health; (ii) rural development and food security; and (iii) enhancing and diversifying the modern economy, while the cross-cutting theme focus on capacity building which affects all sectors in Mauritania supported by a financing envelope of about US$ 700 million provided by the IDB Group. The pillars of IDB Group support and are fully aligned with Mauritania’s strategic pillars in PRSP and anchored in the Vision 1440H aspiration of helping


transform the human development landscape of the Muslim world and restoring its dignity.

53. The MCPS process of extensive consultations between IDB Group staff, the GoM, domestic stakeholders, and development partners underpins the proposed partnership strategy. These consultations have not only resulted in the diagnosis of the key structural constraints facing the economy but also an understanding on the areas of IDB Group intervention in the medium term, taking into account IDB Group’s mandate and comparative advantage and the roles of the other development partners. The MCPS framework also provides for a Results Matrix that should help the GoM and IDB Group staff monitor progress in the implementation of the MCPS across the range of interventions.

2. Pillar I: Enhancing Human Development Through Health

2.1 Current Situation

54. Human Development is central to Mauritania’s long-term future. As reflected in its poor rank (154 out of 182) in the multi-dimensional Human Development Index in 2009, Mauritania faces challenges in many areas including education, lack of skills, health and malnutrition arising from poverty. The IDB Group will focus its efforts over 2011-2015 to help address the constraints Mauritania faces in three dimensions where the challenges are most acute — health (under this pillar), malnutrition through reduction in poverty and improvement in food security (under the second pillar) and capacity building as a cross sector theme.

55. An increase in the allocation of funds to the health sector in Mauritania from about 0.6% of GDP in 2000 to 3.8% in 2010, has led to improvement in access to health facilities but it is still insufficient to provide a basic level of essential services. The increases in resources have helped but are still below the level of US$13 per capita, considered universally as the minimum level of expenditure necessary to ensure a basic level of essential services.

56. The increased resources have helped to improve access to health services in urban and

rural areas but regional disparities remain. In urban areas, about 97% percent of urban population now lives within five kilometers of primary health services. The situation in rural areas has improved but on average only 45% of the population has access to primary health service within five kilometers. The rural average masks much more differences in access between urban and poor rural areas.

57. In addition, the donor community has been providing substantial support to help Mauritania fight communicable diseases including HIV/AIDS, Tuberculosis and Malaria and the country has made progress in this area. Because of these efforts, it appears that MDG 6, related to these diseases, may be achievable.

58. However, child and maternal mortality remain at alarming levels (figures 11 – 12) due to widely perceived malfunctions of the health system and the associated lack of effective sector wide policy.


• The current rate of progress of 8.5% during the past decade will be insufficent for Mauritania to reach the MDG target for the under-five mortality rate (from 135 per 1000 live births in 2000 to around 122 per thousand in 2007, while the MDG target is 45 set for 2015). There are also deep inequalities in mortality. The gaps are 13 points between rural and urban areas, 84.3 between Dakhlet Nouadhibou and Guidimagha; 57 between the richest and the poorest and 49 points depending on the level of education of the mother.

• Similarly, the maternal mortality rate (MMR) remains among the highest in the region it is unlikely that Mauritania will achieve the related MDG target 4. Currently, at 686 per 100,000 live births in 2007, decreasing from 930 in 1990 and 747 in 2000, Mauritania is still far from the target of 232 set for 2015 (MICS).

59. The coverage rate of the Expanded Program on Immunization (EPI) has been falling for the past three years and now stands at 76% for children below five years of age, well below the 85% coverage rate considered by the WHO as necessary to protect the population.

60. The high CMR is largely due to respiratory infections and delivery conditions, and living conditions. Precarious living conditions inherent in poor and rural areas also play a role (housing, access to potable water, sanitation etc). Malnutrition is also factor in child mortality, along with lack of knowledge of proper childcare in new mothers.

61. Along with the lack of proper health facilities and equipment, the high MMR is largely due to the high proportion of premature and frequent pregnancies, low access of pregnant women to quality antenatal care and emergency obstetric services. Cultural aspects contribute to both of these factors

62. While the proportion of births attended by skilled personnel increased from 57% in 2001 to 61% in 2007, the remaining 39% were assisted by an unqualified person, a relative or without any type of assistance whatsoever.

2.2 Main Constraints

63. The main constraints to improving the alarming situation of child and maternal mortality are closely related to malfunctions that characterize the entire health system in Mauritania.

Limitations of health services

• Inadequate funding and institutional capacity: Absence of a clear and coherent policy and a national health sector plan, coupled with both underfunding — a paltry US$13 per capita — and understaffing of the Ministry of Health (MOH) hinder efficient stewardship role for the implementation of the Health Sector Development Plan. Also, program execution in the sector is slowed down by the rapid turnover of staff holding key positions and by weaknesses in financial management and procurement.

• Poor quality of the health management information system (HMIS/ and lack of coordination between MOHSA and SECF, which shares the mandate for malnutrition prevention and reduction, has been problematic over the past years.

• Shortages of qualified and motivated health and social workers along with imbalances in the skill-mix and uneven geographical deployment remain among the key factors affecting the quality and utilization of services. According to the MOH, 90% of trained midwifes currently live in Nouakchoutt.

• Inadequate drug quality and supply: Drug shortages continue to persist in health facilities and the capacity of the drug procurement and distribution system needs further strengthening.

Weak Social Health Determinants

• Inadequate quality control over all components of the Health Sector (SOPs, drugs and health commodities, equipment, training, HMIS etc) is a prevalent feature.

• Low literacy rates especially among women in the rural areas compounded with deeply


rooted harmful traditional practices (e.g. female genital mutilation, food taboos etc) negatively affect the health-seeking behavior and ultimately, accessibility to health services.

• Chronic malnutrition rates have stagnated and remain a serious problem in rural areas among the poorest and the very young (0-3 years) who are the most vulnerable.

2.3 Government’s Strategy for the Health Sector

64. The PRSP-III identifies the development and implementation of a clear and coherent policy as one of the top priorities of the health sector for the next five years. The sector strategies and poverty reduction plans highlighted the need to increasing funding to address healthcare access and quality, human resource needs, awareness and monitoring and evaluation.

65. The forthcoming CSLP-III (2010-2015), envisages developing a strategy whose objectives focus on four strategic areas: (1) improving universal access to health services and quality nutrition, (2) strengthening of the fight against the disease (3) developing mechanisms for financing health and (4) leadership development, good governance and sector performance. This strategy will enable to (i) reduce the overall mortality and morbidity, particularly IMR and MMR (ii) reduce the total fertility rate; and (iii) mitigate the impact of epidemics including endemic HIV/AIDS and emerging diseases (iv) reduce hunger and malnutrition in the population, especially among vulnerable groups (v) strengthen community participation in development and management strategies for access to basic health services, and (vi) enhance coordination and planning within and across sectors.

66. Donors and specialized agencies remain skeptical about the Government’s commitment to implement the strategy in terms of the level, equity and allocative efficiency of spending. Inadequacy of financial support to the WHO for preparing a health sector policy is worrying in this regard. Also available PRSP III documents do not specify the amounts of future funding to the health sector.

2.4 Proposed Interventions (with Donors) to Help Government Meet its Goals

67. Scaling up of direct IDB Group support for primary health care, and a partnership with donors on health initiatives, are the two elements for IDB Group support to enhance access to quality health services and ultimately, impacting the high IMR and MMR in Mauritania though a financing envelope of US$150 million.

Building partnership, and synergy with donors

68. Support to the initiative for preparation of a national health sector policy and the proposed five-year plan currently under preparation by the WHO. In addition:

(i) Support the Expanded Immunization Program to redress shortcomings in the coverage rates with a direct impact on the infant mortality rate in cooperation with UNICEF and GAVI;

(ii) Adopt and expand the successful AFD user’s fees initiative to enhance access to quality health services for pre- and post-natal care in priority remote areas.

Scale up of the direct IDB Group support for Health

69. Support for the extension of the Primary Health Care (PHC) and secondary health care services in the high poverty areas would enhance access to quality services by investing in training and retaining of basic health staff and community volunteers (e.g. midwifes, nurses, community promoter etc), procurement of equipment, other essential health commodities and construction of PHC facilities.

2.5 Suggestions and Recommendations for the Government

70. The situation in Mauritania shows that the implementation of interventions under the human development pillar requires policy and institutional reforms. In this regard, the government strategy should be strengthened through the following actions:

• Preparing and implementing at the earliest opportunity a health system development


strategy giving priority to strengthening primary care provision especially in rural areas.

• Substantially raising allocation in the budget for health system interventions with increased resources devoted to disease prevention and control program and the training of primary health staff (nurses, midwifes and general practitioners) and community health promoters.

• Increase the deployment and retention of the trained health staff for remote and needy areas to augment the efforts of partners to expedite interventions addressing the high IMR and MMR.

3. PILLAR II: Rural Development and Food Security

3.1 Current Status

71. Agriculture has not been performing well in Mauritania. On average, the contribution of agriculture to GDP was 16.7% during the 1991-2008 period with crops (agriculture sensu stricto) representing 3.7% and livestock 13%. In absolute terms, agriculture production has not been declining but stagnating. Stagnation had many causes. In rain fed areas where rainfall is low and erratic, water harvesting and soil conservation techniques to improve production exist but not adopted on a large scale. There has been little or inadequate effort to support rain fed agriculture and livestock despite its importance in rural economy.

72. Food security is a major concern. Cereal production in Mauritania supplies only one third of the population’s needs. Commercial imports and food aid (mainly wheat and rice) supply the balance. In recent years, the level of food supply has been low, particularly in remote areas, and prices of traditional cereals (millet and sorghum in particular) in the production areas have increased especially in the wake of 2008 global food crisis. Adverse climatic conditions also caused a decrease in crop production adding to food insecurity affecting almost one third of the total population, particularly the rural poor. Malnutrition in rural areas is rampant and the most susceptible group includes infants, and

pregnant women. The Government has acted to in coordination with its development partners to deal with food crises. However, the second Strategic Framework for the Fight against Poverty (PRSP II) for 2006-2010 and various instruments of the Special Intervention Program created to address food insecurity had limited impact and food production continued to stagnate.

3.2. Constraints

73. There are several constraints faced by agriculture in Mauritania:

• Annual area under cultivation did not increase and yields remain low by international standards.

• In rain fed areas where rainfall is low and erratic, water harvesting and soil conservation techniques to improve production exist but not adopted on a large scale. There has been little or inadequate support for rain fed agriculture and livestock despite its importance in rural economy.

• In irrigated areas, agriculture is performing poorly despite the significant investments made over the past 30 years. This is due to a combination of factors--natural disasters (floods, locust, etc.), institutional failures (mismanagement, credit and land tenure issues), and a weak investment climate (inadequate infrastructure, volatility in international prices of cereals, overvaluation of the exchange rate). Local officials in Rosso informed the MCPS mission that abandonment of irrigated land by farmers is a serious problem and farmers that met with the mission indicated that Government subsidies were essential for them to survive. This has all contributed to the inability of increases in the size of irrigated areas under new schemes to compensate for areas put out of cultivation. In 2009, only 8,000ha were cultivated compared to an average of 17.000 ha planted annually in last ten years.

• With its important livestock population (11 million of sheep, goats, cattle and camels), Mauritania is self sufficient in red meat and exports a substantial volume (estimated at


75,000 t/year) of live animals to neighboring countries. The local market lacks basic infrastructure (transportation, slaughtering houses, cold chains and sanitary controls). Exports suffer from the same problems, which explain the sale of live animals, depriving the country of a substantial value-added. Similarly, there is no infrastructure for the modern treatment of animal skin. Inefficient traditional techniques produce poor quality hides sold at low prices to the export market as a raw material. There is no leather industry in Mauritania. In 2008, the volume of hides exported was 383.1 tons for the modest value of $ 177,000 representing an average price of US$ 412/ton (source: ONS).

• Mauritania produces about 30% of its milk consumption, two thirds of which are self-consumed and only one third is sold on the local market. The absence of a well-developed supply chain with sufficient capacity for milk collection, cold storage and transportation limits the access of local milk to the market and renders the local milk unable to compete with the imported –and often subsidized- milk. In 2008, Mauritania imported about US$77 million of milk and dairy products (source: ONS).

74. The weak management and human resource endowment in public institutions has added to these problems and led donors to support creation of independent Project Implementation Units (PIUs) that further weakened these institutions.

3.3 Opportunities

75. Agriculture can help to reduce poverty and enhance food security if the Government moves to address the above constraints. In fact, despite its very limited arable land area (0.5%), the agricultural potential of Mauritania is sufficient to provide the country with a reasonable level of food security and help reduce poverty, which lies mostly in rural areas.

76. The potential for irrigated agriculture (137,000 ha) is largely sufficient to meet all the country needs for rice and a significant part of its

vegetables and other diversification crops needs if yields are improved. It could also provide fodder for intensive dairy farming. Current average yield for paddy in Mauritania is 4.24 tons/ha with several farmers achieving 6 tons/ha and, for few of them, even 8 tons/ha. Local climate allows for a second crop but very few practice it.

77. The potential in rain fed agriculture, despite the harsh climate and the irregularity of rainfall, can be better valued if the limited water and soil resources are well exploited and managed in a sustainable way. This would improve the food security of poor rural populations and uplift their economic conditions.

78. Livestock also has a significant potential for improvement: it can not only satisfy a significant portion of domestic milk demand but also supply red meat for the entire domestic market and export to neighboring countries. Livestock byproducts (hides) can also be processed locally using modern techniques and bring additional value added.

79. Inland fishing, currently practiced at small a scale by local communities along the Senegal river and its tributaries as well as in water reservoirs such as Foum Gleita in the Gorgol, is done in a very traditional and inefficient way and it receives little attention from the fisheries department. The effective development of inland fisheries and aquaculture can supply rural communities with a valuable local source of animal protein and generate additional employment and income.

3.4 Government Strategy

80. A Rural Sector Development Strategy of (RSDS) was elaborated in 1998, updated in 2001 and revisited in 2006 to ensure its harmony with the orientations of PRSP I and PRSP II. The RSDS identified four strategic objectives: (i) promote the growth of the sector to ensure food security for the country; (ii) ensure equitable access to sector resources; (iii) increase the supply and availability of goods and public services required for the sustainable development of the sector and (iv) developing management capacity for promoting


Integrated Rural Development programs, involving community participation. This strategy was to be implemented through a set of policies and in a coordinated and decentralized manner: (i) promotion of the main agricultural value chains wedged on the macroeconomic framework and targeting quality products and Diversification; (ii) development of rural infrastructure, (iii) institutional strengthening and organization of the sector, and (iv) policies to protect natural resources.

81. For the livestock sector, the main objectives of the Government inscribed in the 2009 Policy Letter are: (i) to increase the sector’s growth in a sustainable manner and with redistribution, and (ii) to reduce vulnerability of households living from livestock, in accordance with the guidelines of the PRSP.

82. The Action Plan for the PRSP III (2011-2015) proposes an investment program for the rural sector covers that would cost UM 155billion, equivalent to approximately USD 584 million, in combination with a strong emphasis on the role of the private sector. This program aims at improving productivity and incomes in the sector and is concentrated in the regions where the poorest populations live.

83. IDB Group and all other donors fully agree and support the above government strategies, which have been consistent for the last 15 years. The problem Mauritania faces is the government inability to fully and truly carry out the implementation of these strategies and to take all the measures that are recommended. High turnover of decision makers and senior government agencies staff and general mismanagement have been the main impediments. There are also questions about the continuing need to subsidize agriculture in irrigated areas.

3.5 Proposed IDB Group Interventions

84. Agriculture and rural development requires a multi sector and integrated approach. Government support to agriculture alone has shown its limits especially in irrigated areas.

Given the lessons learned from the past showing lack of impact of major government interventions, including subsidies, there should be an early end to subsidies and to Government interventions in irrigated agriculture except where justified on an exceptional basis and the private sector should be encouraged to take a lead role7. Instead, the focus of government interventions should now be on rain fed agriculture to enhance food security and reduce poverty. With this view, the Government should encourage a supply chain approach (approche filière) to address food security involving all partners from input supply to production, processing and market. Production alone will not guaranty food security and will not alleviate poverty. All steps in the supply chain are important and necessary. Agriculture development remains the top activity for the food insecure rural communities. IDB Group promotes such approach in the following areas and intends to provide financing of about $250 million to promote the following activities.

(a) In the irrigated areas, IDB would support the consolidation of rice production system, crop diversification and intensive dairy farming. This will be done by improving or rehabilitating existing irrigated schemes rather than creating new ones (improving land leveling, irrigation and drainage and introducing electrification), securing land tenure and credit, training farmers and technicians, supporting the creation and/or maintenance of access road and transport infrastructure, developing processing units and securing markets. Priority products are rice, new crops (diversification) for local and export markets, and milk. Inland fishing will be part of the integrated approach to be adopted.

(b) In the rain fed areas, IDB would support integrated rural development approach

7 The IDB Group plans to play an important role in promoting the role of the private sector in irrigated agriculture in Mauritania. It will do so both through ICD and in its interactions with the Coordination Group, to support new models for Arab-African investment that can benefit from the synergy with Member Countries that have surplus cash and consumer markets with those that have the knowledge and know-how (for example, Egypt, Morocco etc.) At the same time, to facilitate public-private partnerships in agricultural investments, the Bank will be working closely with the Government of Mauritania to help resolve the constraints noted above in Section V.3.2 that irrigated agriculture has faced in the past decade, and continues to face.


focused on watershed development. Communities located in food insecure areas will be selected on a watershed basis. Community Development Plans will be elaborated and executed by the communities with the assistance of public, private or NGO partners. Activities to be supported include water harvesting, soil conservation and protection, agriculture and livestock production, inland fishing, local capacity building, rural access road and other socioeconomic infrastructure.

(c) IDB Group programs for rural development will aim to include road infrastructure to enhance market access to local communities. The contribution of the IDB to infrastructure development is already facilitating regional integration projects (connections Nouakchott-Nouadhibou to Morocco, and corridors to Mali involving participation to financing: Timbédra-Nema and Ayoun el Atrous –Nioro roads). Moreover, access to far-flung isolated areas is being supported by the creation of a new north-south corridor via Atar-Tidjikja-Kifa, which in addition to its regional counterpart, has eased access to the country’s interior areas.

(d) In the pastoral areas, IDB support to livestock would be at two levels: (i) as part of the integrated approach recommended for the irrigated and rain fed areas and (ii) at national level to deal with the larger animal population practicing transhumance. For the latter, IDB support would consider supporting the national animal health program and to the development of the milk, red meat and hide industries through the Private Sector Development window. This would be done in coordination with Pillar 3.

(e) IDB support to inland fisheries will be included in the projects for irrigated and rain fed areas outlined above. For inland fisheries, IDB considers that it should be part of the Rural Development and Food Security pillar as it is mainly carried out on a small scale, on small bodies of water in rural communities and mainly for local consumption and markets.

(f) It is proposed that ITFC participates in the financing of imports of food and agriculture inputs under Sovereign Risk. Alongside with foodstuff imports, ITFC can play strategic role in supporting the development of local agriculture production, through the financing of seeds, fertilizers and other agriculture products. Discussions with SONIMEX showed that this could be a potential cooperation area starting 2011 forwards.

(g) ICIEC could provide political risk insurance to foreign investors willing to invest in the agriculture sector in Mauritania. In addition, ICIEC may support the agriculture sector in Mauritania by providing credit insurance to exporters, covering the non-payment risk of their overseas buyers. Exports of fisheries, livestock and other agricultural products could be considered in this regard.

(h) The IDB Group should play a significant role in the realization of cross-border initiatives between Mauritania and its neighbor countries which are all member countries. In this regard, the recent initiative launched between Mauritania and Mali to enhance economic development in the city of Gougui (Mauritania) and the city of Nouara (Mali) could be supported by the IDB Group interventions in these cities. It is worth noting that these two cities are connected by the regional rural road financed by the IDB and linking Ayoun Latrous (Mauritania) and Nioro (Mali). Mauritania can also play a major role in providing expertise in bilingual education to benefit Mali and Senegal, under the cross-border initiative, as well as to other IDB member countries in West Africa under reverse linkage (see below).


85. In order to successfully implement the activities under this pillar, it is critical that the government of Mauritania should carry out the following policy actions:

• Update the rural development strategy.

• Design, adopt and start implementing a capacity building strategy for the rural


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Figure 13: Survey of Constraints Facing the Business Environment in Mauritania

development institutions and their staff (capacity in project planning, implementation, monitoring and evaluation, knowledge of IDB procedures, procurement procedures, etc.).

• Set up a sound monitoring and evaluation system for programs and projects and a projects supervision unit in the ministry of rural development.

• Set up an early warning system for natural disasters.

4. PILLAR III: Enhancing and Diversifying the Foundations of a Modern Economy

4.1 Private Sector Development/Islamic Finance

Current situation

86. As noted above, private sector activities in Mauritania are at a nascent stage and dominated by the informal business and small and medium enterprises8. As discussed in Section II, Mauritania is facing a serious development challenge in that the linkage between the subsistence economy and the modern economy typical of a country at

8The transition to a formal economy also faces challenges as 80 % of commercial transactions are made in cash, as noted in the Ernest & Young, Financial feasibility study of establishing an Islamic Bank in Mauritania.

Mauritania’s level of development is missing or is at best very weak. A key development challenge for Mauritania, moving forward is the question of how to strengthen these linkages. The diagnosis suggests, from a macroeconomic perspective, that the Government should urgently review its policies regarding the management and use of earnings from exports of natural resources, taking account of the lessons of international experience in this area. Countries earning high and sustained rents from natural resource extraction try to alleviate any excessive appreciation of the exchange rate by smoothening the use of such rents in addition to steps to process and add more value to the extracted resources before exporting them. This MCPS and this pillar, reflecting the IDB Groups comparative advantage, focuses on areas where the Group can help Mauritania to diversify and enhance its modern economy and strengthen its linkages with the subsistence/informal economy by encouraging and supporting private sector development to facilitate the processing and value addition to the resources it is blessed with.

87. Mauritania offers several business opportunities:


• A positive medium term economic growth output: Real GDP growth reached 11.7% in 2006 and was about 4% over the period 2006-2010. Although growth forecasts for PRSP III (5.5%) are below the ambitious targets in PRSP II of 8.4% due to lower-than-expected levels of oil production, the medium-term outlook remains positive as the high growth scenario reflects.

• Increasing Foreign Direct Investments: FDI increased significantly during the period of 2002-2006 going from US$ 67 million in 2002 to US$ 814 million in 2005 and then to US$ 155 million in 2006. FDI in Mauritania is largely concentrated in the extractive sector.

• Strategic geographic position: Being at the crossroads of two consumer markets, the Maghreb and West Africa, Mauritania benefits from a strategic position that is favorable for the development of trade and exporting activities -- and thus the related banking activities. Moreover, Mauritanian products have preferential treatment on European Union markets.

• Substantial Natural Resources: Despite recent skepticism of its oil reserves, Mauritania remains promising in terms of natural resources. In fact, Mauritania has substantial deposits of solid minerals, including iron-ore, gypsum, phosphates, salt, copper, gold and diamonds and is one of the richest zones in fish resources.

Constraints and opportunities for Private Sector Development

88. The most important constraint to the private sector, as perceived by firms in manufacturing, trade and other sectors is access to and cost of finance but they also mention other constraints (see Figure 13). An important reason for this is that their owners consider banks as an arm for their private business activities. Other constraints include (i) access to electricity (see Box 2), (ii) management capacity and lack of skilled labor, (iii) taxes and (iv) regulatory environment9.

9World Bank CEM, 2010.

89. The lack of a clear legal framework facilitating access to justice is also a major impediment to private sector development in Mauritania. This shortcoming is obvious in land ownership for which there is still no overall record keeping system that would help to entrench the legal status of land ownership. This tends to impede private investments given the fact that land ownership, the basis of any investment, is uncertain. As a result, promoters involved in income generating activities, as well as micro and small enterprises (MSEs) are virtually excluded from bank financing.

90. Management and organization problems due to lack of funds hamper the work of the judiciary. For instance, business and company registration does not exist in Mauritania, so it is difficult to identify the legal status of firms.

Government strategy

91. PRSP III places a high priority to private sector development but lacks specifics. As mentioned above, in the PRSP-III action plan covering the period 2011-2015, the Government strategy aims at creating favorable conditions to the attainment of sustained and durable growth through structural reforms designed to enhance the investment climate. These include a focus on (a) promotion of growth sources; (b) infrastructure development; (b) rural development with a special attention focused on rain agriculture and livestock; (c) urban development; (d) access to finance to support SME development; and

Box 2ICD Strategy in Mauritania

ICD’s intervention is based on the assessment that Mauritania is positioned in the quadrant B of ICD’s member country mapping which include the group of member countries where both Islamic finance and Private Sector Development are weak or at the initial stage of development. ICD strategy will focus on four areas: (i) developing new channels for investment (e.g. building banks or Ijara companies); (ii) developing an enabling environment for Islamic finance/PSD; (iii) supporting direct investment/financing in the fishery sector; and (iv) preparing a feasibility study for the development of a specialized economic zone in Nouhadibou.


(e) the conservation of the environment and its promotion as an economic asset. These areas are important and most reflect necessary conditions for private sector development. But there is a need for a more specific program to address the fundamental structural weaknesses facing the economy and which have inhibited development of a modern economy with a vibrant private sector based manufacturing over the past two decades.

Proposed strategy for interventions to help Government meet its goals in consultation with other donors

• Flagship investments in key areas such as fisheries, dairy, red meat and hides,

• Improving the business environment for SMEs in particular access to finance, among other things through the setting up of an Islamic Bank and the establishment of dedicated lines of finance for local banks,

• Offering short term financing to public entities,

• Construction of affordable housing for lower and middle-income people in urban areas,

• Investment in critical infrastructure—roads, ports, and energy,

• Encouraging firms in natural resource sectors to add value to the extracted resources.

Indicative interventions by IDB Group for 2011-2015

92. In the framework of the strategy of intervention of the IDB Group in Mauritania, the IDB Group plans to invest in four main axes:

• SME development & promotion of Islamic financing,

• Development of projects in the real estate and fishery sectors,

• Launching catalyst programs which are business enabler to the private entrepreneurs, like Special Economic Zone (SEZ) and Project Development Facility,

• IDB participation in PPP program to restructure SOMELEC including investment in domestic gas

Box 3Status of Power Sector in Mauritania

• Demand is growing rapidly (10% per year on average between 1998 and 2008)

• There is a large shortage of supply (the shortfall in Nouakchott estimated at 30-40 MW) and backup generators make up half of total installed capacity in Mauritania, high international oil prices have put enormous pressure on all of the oil-importing countries including Mauritania.

• The cost of electricity is high due to the structure of production (fuel / diesel imported) and technical performance (technical and commercial losses are nearly 30%).

• In the urban areas: electrification rate is limited to 54% national wise whereas it drops to 40% in Nouakchott. Main cities are exclusively dependant on a single source--MVS provides 15% of the hydropower generated in Manantali Dam. This constitutes a single interconnected network (225/90/3315 KV), all other areas and localities are supplied from off-grid separated small networks by diesel generators.

• In rural areas, the electricity is quasi-inexistent; the electrification rate does not exceed 5%. The viability of providing electricity service based on decentralized generators and networks leads to a high compensation of the private service providers, which aggravates the financial burden of the government. The penetration rate of renewable is insignificant due to the high investment and weak willingness to pay from the rural population due to lack of revenue generating activities.

• The principal supplier and network operator (SOMELEC) is in a quasi-business failure situation due to:

- unresolved investment issues related a failed privatization in 2004

- high transmission and commercial losses estimated at 31.5%; and

- internal inefficiency--number of clients/employee is 104, half the international standard.

• Despite its problems the government is strongly supporting SOMELEC and the Government signed a performance-based agreement along with a restructuring program,


based thermal and solar energy capacity, and improving transmission networks including Nouakchott-Nouadhibou connection.

93. ICIEC is ready to support the inflow of foreign direct investments into Mauritania by insuring investments made by foreign investors against certain political risks in Mauritania. Some foreign investors would require such risks to be covered in order to make their investments

4.2 Trade Finance and Insurance

Trade composition in Mauritania

94. Mauritania’s share of regional trade is still very small, the EU remains its main trading partner, and its trade with China is rising rapidly. Mauritanian exports get preferential treatment in the EU market and under the Everything-But-Arms (EBA) program for least developed countries. The majority of Mauritania’s imports come from the EU, with France being the single largest source worldwide. Its trade with China is rising--exports to China rose from only US$9 Million in 2002 to US$365 Million in 2006. Since the start of oil production, China has become the country’s main destination for exports, accounting for a startling 67.3% in 2006, up from just 0.7% in 2005.

Constraints to trade finance

• The financial sector is under-developed. About 88% of the sector’s assets are held by commercial banks with 8 commercial banks, 7 insurance companies, 2 financial institutions specialized in agriculture and fisheries, 67 approved micro-finance institutions, as well as a leasing firm. There lack of diversification of the products and services offered and the commercial banks’ transactions mainly concern operators of the import – export sector, and are essentially based on short-term financing.

• The private sector is not structured, consisting of small companies. This makes it difficult to deal directly with these entities.

• Banks are often playing a trader role and they import for themselves all commodities in need in the market.

• Mark up of local banks is very high. Around 13% p.a for known companies and more than 17% p.a for new clients.

Elements of IDB Group Intervention in Trade Finance & Insurance

95. The interviews conducted with SONIMEX (National company for imports and exports), the ministry of agriculture, and Mauritania Patronat, emphasized on the urgent need to supply the imports of basic commodities such Sugar, Oil, Rice, and similar. The Government aim to stabilize the prices is confronted with the growing appetite of private companies, taking advantage from shortage periods to increase the prices. SONIMEX is the government arm towards ensuring an adequate Market supply, which is seen as the most efficient way to counter speculating for such crucial commodities. Financing SONIMEX foodstuff imports, and other critical inputs for the development of Agriculture capacity, is in direct link with MCPS Pillar 1 and should offer the following advantages if provided under Government guarantee:

1. The financial agility for country food security.

2. The ability to secure prices stability against speculation.

3. The ability to build on the existing capacity and extend the supply to other strategic commodities such seeds, fertilizers, which are critical for Mauritania food security and agriculture development.

96. ITFC can play important role in financing public companies needs of Energy, mainly Gas and Fuel under sovereign risk. The preliminary discussions with SOMELEC and SOMAGAS GMS as well as the Ministry of Energy and Petrol showed that ITFC financing could offer better terms and conditions.

1. The confirmation fee is included in ITFC Mark up (about 2% saving).

2. ITFC Financing provides a financial advantage as currently, these companies are under a differed payment credit from their Gas and Fuel supplier.


3. The flexibility to finance other entrants with the same facility.

97. ITFC intends to support the important SMEs sector by extending lines of finance or two step Murabaha financing to local banks, so their clients can benefit directly from it. Preliminary discussions have started with Banque Mauritanienne du Commerce International (BMCI) which has sent an official financing request.

98. ICIEC could potentially insure the nonpayment risk of Letters of Credit to be issued by Mauritanian banks to finance imports of goods and services from ICIEC’s member countries. In addition, ICIEC could insure Letters of Credit financing the imports of capital or strategic goods from non member countries.

99. ICIEC may also insure foreign contractors executing projects in Mauritania in strategic sectors (like infrastructure, health, education, etc.) in favor of the government or government-owned entities, against the nonpayment risk if the payment is made or guaranteed by the Ministry of Finance of Mauritania.


100. In order to insure successful implementation of activities under this pillar, the government should prepare the ground for the development of a vibrant private sector. Among others, the following actions, should constitute a priority for the GoM:

• Strengthen the investment climate by improving the policy regarding the registration of land ownership.

• Develop a regulatory framework to reform and strengthen the financial sector.

• Setting up the legal framework for PPP and building capacity to oversee the management of PPP.

• Remove barriers to entry for new investments especially in areas where investment opportunities are promising (including further processing of iron ore before exporting it).

• Identify and implement measures to speed-up investment inflow to the energy sector, both for generation and transport/distribution.

5. Cross-Cutting Theme: Capacity Building10

5.1 Current Situation and Constraints

101. The Mauritanian Administration and Civil Service in general suffer from weak capacity in terms of limited staff and cadre, aging executives coinciding with important retirements, frozen recruitments, inadequacy of skills with required profiles. Likewise, the private sector and large firms face a shortage of adequate skills and low productivity. The largest firms in the country report skills mismatch to be the primary obstacle for productivity and growth11.

102. Only half of the ministries recently surveyed report a unit headed by a specialist of Monitoring-Evaluation, while evaluation is a permanent activity in 34% for policy and 66% for projects and programmes. Almost half of the institutions have never practiced evaluation of public policies and as for individual projects and programs; this rate stands at only 30%.12

103. The Islamic Development Bank financed a number of Technical Assistance and capacity building operations in the sectors of Mining, Awqaf, Banking, Civil Administration, Rural Development and Agronomic Research, and Poverty reduction through effective management of oil resources. Besides, the setting-up of PIUs has been systematic for all new projects.

104. The Technical and Financial Partners of Mauritania have been extensively involved in the Government Capacity Building programmes. The major programme under implementation is the PRECASP13, funded by the World Bank to focus on five ministries. It aims to address civil service reform and public sector management capacity,

10More detailed background paper on the Capacity Building is available for reference.11World Bank, Mauritania, Policy Options to Enhance Private Sector Development, CEM, April 201012MAED, AMSE,PNUD, Christian BONIFAS, Mohamed O/SIDI BACAR, 30 mars 2009.13Project Appraisal Document on a Proposed Credit In the Amount of SDR 9.1 mn (Us$13.0 mn Equivalent) to the Islamic Republic of Mauritania for a Public Sector Capacity Building Project, May 31, 2006.


and improve the performance, efficacy, and transparency of public resources management. An evaluation of this 2006 project is still awaited.

5.2 Government Strategy and Objectives

105. The new Government strategy, reflected in PRSP III, recognizes that weak administrative capacity has hindered the country’s development and its ability to absorb developmental aid in the past. It emphasizes the need for building and improving the capacity of both PIUs and core government ministries and agencies and takes account of recent findings linking low absorptive capacity to weaknesses in the technical capacity of ministries, poor coordination of interventions, and the absence of effective monitoring and evaluation (M&E) capacity, notably in relation to data availability and quality and the institutional capacity for M&E14.

106. Strengthening good governance and capacity building and reinforcement of monitoring, evaluation, and coordination constitute the fourth and the fifth pillars of PRSP III. PRSP III includes measures aimed at (i) developing capacities in the area of design and programming, (ii) capacity-building in project execution and monitoring and evaluation, (iii) harmonization of donor procedures, and (v) capacity building in the private sector. The IDB Group supports this approach and emphasizes the need for early implementation, and support for policy design. Also, and critically, GoM should urgently focus on complementary programs to develop private sector skills and capacity.

5.3 IDB Group Proposed Strategy

107. The IDB Group will earmark US$ 1 million to support capacity building in the public sector focusing on entities dealing with crosscutting issues including policy development, planning and programming, monitoring, audit and evaluation, and legal and regulatory frameworks. The following public entities will be given priority for support: the Ministry of Economic Affairs and Development, the Ministry of Finance, the

14Capacity Issues In the Formulation and Implementation of the Next Generation of Poverty Reduction Strategy Papers, Working Paper, The African Capacity Building Foundation, 2009.

Ministry of Public Sector and Modernization of the Administration, the Commissariat for the Promotion des Investments, the General Inspectorate of the State, the Court of Accounts, the Agency for Project Studies and Monitoring and sector departments corresponding to priority sectors of the strategic pillars of the MCPS.

108. IDB has pre-identified generic themes for capacity building. These include (a) Planning, programming, monitoring and evaluation of policies, poverty analysis, projects and programmes, (b) Enhancing quality at entry and formulation of projects, and the mastery of the project cycle, (c) Capacity building of staff in the fields of macroeconomics and statistics, economic modeling, (e) Development of an integrated information systems, and (f) Improvement of institutional and organizational frameworks.

109. Instruments include technical assistance project with a focus on “reverse linkage” to promote sharing knowledge and best practices between Mauritania and other IDB MCs. Areas for cooperation include rural electrification (Morocco), agriculture (Egypt & Morocco) microfinance (Tunisia), Islamic microfinance (Bangladesh), SMEs and disaster management (Turkey), Natural resources rents management (Indonesia, Malaysia, Pakistan), and energy (Algeria and Arab Countries). At the same time, reverse linkage is not a unidirectional concept and Mauritania can play a major role in providing expertise in bilingual education to benefit Mali and Senegal, as noted above under cross-border initiatives, as well as to other IDB member countries in West Africa.

110. ITAP, based on a need assessment of the Commissariat à la promotion des investissements (CPI) carried out in April 2010, is designing a comprehensive technical assistance program for Mauritania with the objective of helping CPI in promoting Mauritania as an investment destination and an estimated budget of US$ 300,000. The program will consist of several components including: (i) Strengthening the organizational structure of CPI and staff training, (ii) Country Image Building, and (iii) Investment


TABLE 9: Indicative IDB Group MCPS Financing Program for 2011-2015 (1432-1436H) (in US$ Million*)IDB Group Envelope: US$ 700 Million**

2011 2012 2013 2014 2015

140 140 140 140 140

IDB

ITFC, ICD, and

ICIEC

IDB

ITFC, ICD, and

ICIEC

IDB

ITFC, ICD, and

ICIEC

IDB

ITFC, ICD, and

ICIEC

IDBITFC,

ICD, and ICIEC

Hum

an Developm

ent (Primary

Healthcare)

Rural Developm

ent and Food Security

Private Sector Developm

ent+Trade Finance

Hum

an Developm

ent (Primary

Healthcare)

Rural Developm



ent +Trade Finance

Hum

an Developm

ent (Primary

Healthcare)

Rural Developm



ent +Trade Finance

Hum

an Developm

ent (Primary

Healthcare)

Rural Developm



ent +Trade Finance

Hum

an Developm

ent (Primary

Healthcare)

Rural Developm



ent +Trade Finance

30 50 60 30 50 60 30 50 60 30 50 60 30 50 60*Subject to absorptive capacity and other constraints outlined in this report. Also, total includes US$ 2 to 3 million for TA.**The framework agreement signed between the IDB Group and the Government of Mauritania on 29 Rajab 1429H (1 August 2008G) envisaged investing a similar amount of US$ 700 Million through Y2012G.

generation activities to identify and prepare profiles of viable projects.

VI. RISKS AND UNCERTAINTIES

111. The short period since the establishment of the new government is insufficient for affirming the ability of this government to maintain the political stability that the country really needs. Political instability continues to threaten the sustainability of the reforms that the country is trying to put in place to enable its development process. To mitigate this risk, the MCPS team has consulted widely in Mauritania on the proposed IDB Group interventions, including members of the opposition parties in parliament and civil society. Also, the MCPS is based on the objectives in the PRSP III which the Government has prepared after involving all concerned parties. Therefore the priorities outlined in the MCPS are likely to be relatively immune to political economy developments.

112. Vulnerability to external shocks is exacerbated by the dependency of Mauritania on foreign aid. In the future, at least in the short and medium term, the success of its strategies will be

contingent on the magnitude of the impact that the external shocks could exert on its economic growth. The speed of diversification of the economy would be determinant in reducing this dependency of Mauritania on external resources. Good governance of natural resource rents is a pre-requisite to the sound implementation of development strategies. Implementation of this MCPS will help to mitigate this risk by enhancing diversification of the economy.

113. Vulnerability to natural disasters (mainly droughts and floods) and environmental degradation have been very serious issues in Mauritania. Support provided under pillar II is designed to reduce the risks faced by those most vulnerable to these risks (i.e. the rural poor).

114. The size of the financing envelope. The size of financing indicated in this MCPS was agreed with the Government and is in accordance with the baseline growth scenario outlined in the PRSPIII. Under a higher growth scenario, which could result from either the discovery of more mineral resources or better management of windfalls leading to increased spillovers to the ‘subsistence economy’, financing requirement


reforms and a surge in oil production in 2006, economic growth averaged 5% in the 2004-2008 periods. However, the deterioration in economic activity resulting from domestic and external shocks revealed the structural weaknesses inherent in the economy.

119. The prospects for significantly reducing poverty to 25% and achieving a stable economic growth of 5.5%, as envisaged in PRSPIII, and creating more jobs hinge on the performance of subsistence sectors, especially agriculture and livestock, and manufacturing, which face several constraints. These include: underdeveloped human capital, poor performance of agriculture, livestock, and manufacturing sectors, weak business environment for private sector activity, and absence of link between the modern mineral economy and traditional sector.

120. The MCPS outlines a substantial IDB Group program of cooperation spread over the next five years (2011-2015), to help Mauritania address the aforementioned constraints. Key steps in the way forward to ensure success include more detailed programming, enhancing the effectiveness and role of IDB Group entities particularly to facilitate private sector development, and a mid-term review to access progress and make needed corrections. These steps will help to encourage effective implementation of the MCPS as an instrument of IDB Group’s partnership with Mauritania.

121. There are significant benefits to both sides of the partnership. The partnership will help Mauritania in its quest to achieve its long term vision of a stable modern democracy, well integrated with the regional and global economy and set on the path of sustainable economic and social development. For the IDB Group the MCPS will form the cornerstone of its dialogue with Mauritania — it will leverage internal Group synergies and enhance the country’s ownership, and with it, the development impact of the IDB Group interventions.

could be higher and will be reconsidered at the mid-term review stage. In case of lower growth resulting from political instability, external shocks, and natural disasters, the financing needs could also be reassessed in mid-term review.

115. Commitment of other donors for sustained support to Mauritania. As noted in the report, Mauritania is highly dependent on foreign aid and thus any interruption in this aid (for example following unexpected political developments) will make it difficult for Mauritania to meet its PRSP III targets. In these circumstances, the continued IDB Group support will help to soften the impact from such a shock.

116. Impact of the MCPS Program. The results matrix outlining the expected impact of the MCPS program has been prepared taking into account the planned investments of the Government, the private sector, and the interventions of other development partners. Expected impact depends on implementation of the MCPS, in coordination with the Government and other development partners. Therefore, IDB Group will continue active dialogue with Government and development partners during implementation.

VII. CONCLUSION AND WAY FORWARD

117. The dichotomy between the subsistence poor economy and the modern enclave economy poses unique challenges to Mauritania’s development. This unique economic structure has produced mixed results: on the positive side, the enclave economy has provided high and consistent rents that have allowed the Government to finance development activities including infrastructure for irrigated agriculture. On the negative side, the enclave economy has only limited links with the subsistence economy. In particular as the value added to raw material exports is limited and given the capital-intensive nature of extraction activities, the demand for labor is negligible.

118. Thus, despite a moderate economic growth, poverty has remained high especially in rural areas. Thanks to sound macroeconomic policies, prudent economic management, structural


ANNEXES


MAURITANIA AT A GLANCE

Selected Macroeconomic Statistics (Source: IMF’s World Economic Outlook Database, October 2010)

2006 2007 2008 2009 2010 (Est.)

Population (millions) 2.9 3.0 3.0 3.1 3.2

Real GDP (LCU, Billions) 339.8 343.3 355.9 352.1 368.7

Real GDP growth (%) 11.4 1.0 3.7 -1.1 4.7

Nominal GDP (LCU, Billions) 725.0 734.0 854.8 793.5 961.2

Nominal GDP (US$, Billions) 2.7 2.8 3.5 3.0 3.5

GDP per capita (current, LCU Millions) 0.251 0.248 0.282 0.256 0.302

GDP per capita (current, US$) 933.4 953.0 1167.4 975.4 1096.3

Inflation (%) 6.2 7.3 7.3 2.2 6.1

Current Account Balance (%GDP) -1.3 -18.3 -15.7 -12.5 -7.6

Sectors, value added (% of GDP) (Source: WDI 2010)

1970 1980 1990 2000 2007

Agriculture 29 30 30 28 13

Industry 38 26 29 30 47

Services 32 44 42 43 41

Selected Social Indicators (IMF Country Report No. 10/168, April 2010)

1996 2000 2002 2004 2008

Poverty incidence 50.0 46.3 .. 46.7 42.0

Prevalence of child malnutrition 32.0 .. 30.2 39.4

Gross primary enrollment ratio 75.9 89.1 89.8 76.7 90.9

Share of girls in total primary enrollment 46.0 48.0 49.0 79.0 93.5

Child mortality 125.6 122.0 .. .. ..

Maternal mortality rate .. 747.0 .. 820.0 820.0

Incidence of HIV/AIDS .. 0.5 0.6 0.5 ..

Private Sector Indicators (Source: World Bank 2010)

2003 2004 2005 2006 2007

Time required to start a business 82 82 82 82 65

2009 2010 Change

Doing Business 161 166 -5

Starting a Business 140 149 -9

Dealing with Construction Permits 141 154 -13

Employing Workers 123 125 -2

Registering Property 62 74 -12

Getting Credit 147 150 -3

Protecting Investors 143 147 -4

Paying Taxes 176 175 1

Trading Across Borders 161 163 -2

Enforcing Contracts 82 83 -1

Closing a Business 150 150 0


RESU

LTS

MAT

RIX

PILL

AR

1 --

HU

MA

N D

EVEL

OPM

ENT

(HEA

LTH

)

Gov

ernm

ent G

oals

/ S

trat

egy

Curr

ent

Chal

leng

es/

Bind

ing

Cons

trai

nts

Out

com

es th

at th

e ID

B G

roup

Exp

ects

to

Supp

ort

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Exp

ects

to

Influ

ence

Dur

ing

the

MCP

S Pe

riod

IDB

Inte

rven

tion

sO

utpu

t

Impr

ove

the

heal

th a

nd w

elfa

re

thro

ugh

impr

oved

acc

ess

to

qual

ity

heal

th c

are

and

soci

al

equi

ty t

o e

nabl

e re

duci

ng th

e ov

eral

l mor

talit

y an

d m

orbi

dity

, pa

rticu

larl

y IM

R an

d M

MR

Inad

equa

te

insti

tuti

onal

cap

acit

y:

• A

bsen

ce o

f a c

lear

an

d co

here

nt p

olic

y an

d a

natio

nal h

ealth

se

ctor

pla

n •

Und

erst

affing

of t

he

Min

istr

y of

Hea

lth

(MO

H).

• In

adeq

uate

de

cent

raliz

ation

•

Wea

knes

ses

in

finan

cial

man

agem

ent

and

proc

urem

ent

Und

er-f

undi

ng:

Wea

k he

alth

m

anag

emen

t in

form

ation

sys

tem

(H

MIS

/

Lack

of c

oord

inati

on

betw

een

key

part

ners

Dev

elop

men

t of

natio

nal h

ealth

sec

tor

plan

Trai

ning

and

reta

inin

g of

Sta

ff

Ope

ratio

naliz

ation

of

the

dec

entr

aliz

ation

Enfo

rcem

ent o

f go

vern

ance

Incr

ease

d bu

dget

al

loca

tion

Alte

rnati

ve H

ealth

fin

anci

ng p

rom

oted

Leve

ragi

ng th

e on

goin

g eff

orts

of k

ey p

artn

ers

on g

roun

d;

Part

ners

hip

prom

otion

an

d sy

nerg

y to

add

ress

ke

y ch

alle

nges

Impr

ovem

ent i

n ac

cess

to

qua

lity

heal

th

serv

ices

for

vuln

erab

le

grou

ps a

nd in

rem

ote

area

s

Supp

ort t

he in

itiati

ve

for

prep

arati

on o

f a

natio

nal h

ealth

se

ctor

pol

icy

and

the

prop

osed

five

-yea

r pl

an

Supp

ort t

o ex

tens

ion

of P

HC

serv

ices

(Fac

ilitie

s,

equi

pmen

ts, r

aini

ng

and

reta

inin

g of

ba

sic

heal

th s

taff

at

com

mun

ity le

vel);

Supp

ort f

or d

isea

se

cont

rol p

rogr

ams

(EPI

and

epi

dem

ics

cont

rol)

1.N

ation

al H

ealth

po

licy

and

a 5-

year

he

alth

sec

tor

plan

pr

epar

ed a

nd

oper

ation

al

2. G

over

nmen

t ann

ual

heal

th b

udge

t/co

unte

rpar

t fun

ding

an

d pa

rtne

rs s

uppo

rt

to H

ealth

Inc

reas

ed

3. Im

prov

ed h

ealth

st

aff tr

aini

ng,

dist

ribu

tion

and

moti

vatio

n

4. A

cces

s to

qua

lity

heal

th s

ervi

ces

in

prio

rity

rem

ote

area

s im

prov

ed


PILL

AR

2 --

RU

RAL

DEV

ELO

PMEN

T A

ND

FO

OD

SEC

URI

TY (A

GRI

CULT

URE

AN

D F

OO

D S

ECU

RITY

)

Gov

ernm

ent G

oals

/ S

trat

egy

Curr

ent C

halle

nges

/ Bi

ndin

g Co

nstr

aint

sO

utco

mes

that

the

IDB

Gro

up E

xpec

ts to

Su

ppor

t

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Exp

ects

to

Influ

ence

Dur

ing

the

MCP

S Pe

riod

IDB

Inte

rven

tion

sO

utpu

t

Prov

ide

food

sec

urity

;

Alle

viat

e po

vert

y;

Prom

ote

the

sust

aina

ble

and

equi

tabl

e gr

owth

of t

he s

ecto

r.

Incr

ease

its

cont

ribu

tion

to th

e na

tiona

l eco

nom

y.

Chal

leng

es

Rura

l are

as, w

here

mor

e th

an 5

0% o

f the

poo

r liv

e ha

ve s

uffici

ent p

oten

tial

to e

nsur

e fo

od s

ecur

ity

and

elim

inat

e po

vert

y,

and

cont

ribu

te p

ositi

vely

to

the

natio

nal e

cono

my.

Food

sec

urity

impr

oved

Rura

l Pov

erty

redu

ced

Acc

ess

to fo

od im

prov

ed

as m

easu

red

by th

e Fo

od

Secu

rity

Com

mis

sion

(C

SA)

Inco

mes

incr

ease

d fo

r ta

rget

ed c

omm

uniti

es in

ID

B in

terv

entio

n ar

eas.

Mau

rita

nia

rain

fed

zone

can

sus

tain

mor

e th

an tw

ice

the

actu

al

prod

uctio

n of

cer

eal

and

puls

es if

exi

sting

im

prov

ed te

chni

ques

fo

r so

il an

d w

ater

co

nser

vatio

n an

d m

anag

emen

t wer

e ad

opte

d, if

func

tiona

l va

lue

chai

ns w

ere

esta

blis

hed

and

if lo

cal

com

mun

ities

wer

e fu

lly

empo

wer

ed.

Agr

icul

ture

pro

ducti

on in

ra

in fe

d ar

eas

incr

ease

d.

Mor

e ar

eas

unde

r pr

oduc

tion

and

high

er

yiel

ds o

btai

ned.

Com

mun

ity-

base

d in

tegr

ated

rur

al

deve

lopm

ent

and

wat

ersh

ed m

anag

emen

t pr

ojec

t (CB

IRD

-WM

).Pr

ojec

t: X

1

Infr

astr

uctu

re (

acce

ss

road

s, s

mal

l dam

s, w

ells

, ga

rden

s, g

rain

sto

rage

, et

c.).

Equi

pmen

t (gr

ain

mill

s, fe

nces

, too

ls, e

tc.).

Fa

rmer

s tr

aine

d an

d or

gani

zed.

Irri

gatio

n po

tenti

al

(137

.000

ha) i

s su

ffici

ent

to m

eet m

ost o

f cou

ntry

ne

eds

for

rice

, veg

etab

les

and

anim

al fe

ed a

nd

allo

w fo

r s

ome

vege

tabl

e an

d/or

frui

t exp

orts

.

Rice

yie

lds

and

prod

uctio

n in

crea

sed.

an

d ec

onom

ic v

iabi

lity

of

loca

l ric

e ac

hiev

ed in

the

Sene

gal R

iver

Val

ley.

Rice

yie

lds

and

prod

uctio

n in

crea

sed.

an

d ec

onom

ic v

iabi

lity

of

loca

l ric

e ac

hiev

ed in

IDB

supp

orte

d pr

ojec

ts.

Reha

bilit

ation

of e

xisti

ng

irri

gate

d sc

hem

es (R

EIS)

. Pr

ojec

t: X

2

X h

ecta

res

of ir

riga

ted

sche

mes

reha

bilit

ated

an

d un

der

prod

uctio

n.Fa

rmer

s tr

aine

d an

d or

gani

zed.


PILL

AR

2 --

RU

RAL

DEV

ELO

PMEN

T A

ND

FO

OD

SEC

URI

TY (A

GRI

CULT

URE

AN

D F

OO

D S

ECU

RITY

) (CO

NTI

NU

ED)

Gov

ernm

ent G

oals

/ S

trat

egy

Curr

ent C

halle

nges

/ Bi

ndin

g Co

nstr

aint

sO

utco

mes

that

the

IDB

Gro

up E

xpec

ts to

Su

ppor

t

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Exp

ects

to

Influ

ence

Dur

ing

the

MCP

S Pe

riod

IDB

Inte

rven

tion

sO

utpu

t

Prov

ide

food

sec

urity

;

Alle

viat

e po

vert

y;

Prom

ote

the

sust

aina

ble

and

equi

tabl

e gr

owth

of t

he s

ecto

r.

Incr

ease

its

cont

ribu

tion

to th

e na

tiona

l eco

nom

y.

Pote

ntial

to s

uppo

rt

a la

rger

and

hea

lthie

r liv

esto

ck p

opul

ation

and

to

impr

ove

sign

ifica

ntly

th

e va

lue-

adde

d of

this

se

ctor

. It c

an:

(a) p

rodu

ce

all t

he m

ilk th

e co

untr

y ne

eds;

(b) i

ncre

ase

the

valu

e-ad

ded

of it

s re

d m

eat p

rodu

ction

fo

r lo

cal m

arke

ts a

nd

expo

rts

and

(c) d

evel

op a

m

oder

n hi

de a

nd le

athe

r pr

oces

sing

indu

stry

.

Add

ed v

alue

per

ani

mal

is

incr

ease

d.

The

lives

tock

pop

ulati

on

is h

ealth

ier

and

mor

e pr

oduc

tive.

Live

stoc

k Pr

ojec

t.Pr

ojec

t: X

3

Live

stoc

k in

vent

ory

com

plet

ed.

Vete

rina

rian

sta

ff

trai

ned,

equ

ippe

d an

d op

erati

onal

.N

ew w

ater

poi

nts

crea

ted.

*Mar

ket s

hare

for

loca

l m

ilk im

prov

ed a

nd

impo

rts

redu

ced.

*Val

ue-a

dded

in th

e da

iry

and

red

mea

d se

ctor

s si

gnifi

cant

ly in

crea

sed.

*Val

ue-a

dded

for

hide

s is

si

gnifi

cant

ly a

ugm

ente

d

*Milk

pro

cess

ing

cent

ers

are

oper

ation

al a

nd

econ

omic

ally

via

ble.

*Vol

ume

of lo

cal m

ilk

proc

esse

d is

incr

ease

d.

*Loc

al re

d m

eat m

arke

t if

fully

sup

plie

d an

d ac

cord

ing

to n

orm

s an

d pr

oces

sed

red

mea

t ex

port

s ar

e gr

owin

g.

*Mau

rita

nia

expo

rts

proc

esse

d hi

des

Supp

ort t

o th

e Pr

ivat

e Se

ctor

for

the

deve

lopm

ent o

f (i)

da

irie

s, (i

i) sl

augh

ter

hous

es, (

iii) m

eat

proc

essi

ng c

ente

rs a

nd

(iv) s

kin

and

leat

her

indu

stri

es.

Proj

ect:

X5

*Milk

col

lecti

on s

yste

m is

in

pla

ce.

*Num

ber

of m

ilk

proc

essi

ng c

ente

rs

incr

ease

d.

*Sla

ught

er h

ouse

s ar

e bu

ilt a

nd a

re o

pera

tiona

l.

*Hid

e tr

eatm

ent u

nits

ar

e bu

ilt

Inla

nd fi

shin

g po

tenti

al in

th

e m

ajor

wat

erco

urse

s (S

eneg

al R

iver

and

tr

ibut

arie

s) a

nd in

the

few

w

ater

rese

rvoi

rs c

an b

e be

tter

exp

loite

d in

ord

er

to in

crea

se in

com

e an

d im

prov

e nu

triti

on in

rur

al

area

s.

Inla

nd fi

sh p

rodu

ction

an

d m

arke

ting

deve

lope

d an

d pr

ocur

e ad

ditio

nal

inco

me

and

food

for

loca

l po

pula

tions

Fish

pro

ducti

on a

nd

catc

hes

are

incr

ease

d.

Fish

is s

old

on th

e lo

cal

mar

ket.

Mor

e fis

h is

be

ing

cons

umed

. .lo

cally

Dev

elop

men

t of

fish

cultu

re a

nd fi

sh

man

agem

ent a

s pa

rt

of C

BIRD

-WM

and

REI

S pr

ojec

ts.

Proj

ect:

X1

& X

2

Trai

ning

and

equ

ipm

ent

of fi

sher

man

com

plet

ed.


PILL

AR

2 --

RU

RAL

DEV

ELO

PMEN

T A

ND

FO

OD

SEC

URI

TY (I

NFR

AST

RUCT

URE

-- T

RAN

SPO

RT)

Gov

ernm

ent G

oals

/ S

trat

egy

Sour

ce: P

RSP

IIICu

rren

t Cha

lleng

es/

Bind

ing

Cons

trai

nts

Out

com

es th

at th

e ID

B G

roup

Exp

ects

to

Supp

ort

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Ex

pect

s to

Influ

ence

D

urin

g th

e M

CPS

Peri

od

IDB

Inte

rven

tion

sO

utpu

t

Impr

ove

the

insti

tuti

onal

or

gani

zati

on o

f the

sec

tor

Mod

erni

ze th

e de

velo

pmen

t of

in

fras

truc

ture

Impr

ove

the

econ

omic

co

mpe

titi

vene

ss o

f tra

nspo

rt

serv

ices

Rein

forc

e th

e ca

paci

ty o

f the

se

ctor

Imba

lanc

ed f

undi

ng

for

road

mai

nten

ance

ve

rsus

road

co

nstr

uctio

n

Hig

h tr

ansp

orta

tion

fees

, lim

ited

capa

city

and

lack

of

com

petiti

vene

ss

of th

e m

ariti

me

tran

spor

t

Lim

ited

capa

city

of

the

natio

nal

cons

truc

tion

sect

or

Lim

ited

inte

rnal

ca

paci

ty fo

r M

& E

of

proj

ects

Lack

of P

PP s

truc

ture

s an

d re

gula

tions

and

lim

ited

abso

rptio

n ca

paci

ty o

f pub

lic

sect

or

A s

igni

fican

t red

uctio

n in

tra

vel ti

me

for

traffi

c th

roug

h th

e ne

w N

orth

-Sou

th

corr

idor

Sign

ifica

nt re

ducti

on

in th

e co

st o

f tr

ansp

ort

serv

ices

th

roug

h th

e co

rrid

or

Subs

tanti

al

impr

ovem

ent i

n ac

cess

to m

arke

ts in

ra

in fe

d ar

eas

Incr

ease

d ca

paci

ty

of th

e EN

ER in

term

s of

road

s le

ngth

m

aint

aine

d pe

r ye

ar.

Com

preh

ensi

ve M

IS

of th

e M

inis

try

of

Tran

spor

t in

line

with

th

e M

ulti-

mod

al

mas

ter

plan

stu

dy

Feas

ibili

ty s

tudy

fo

r th

e ad

ditio

nal

segm

ents

is re

ady

Fina

ncin

g of

som

e se

gmen

ts a

ppro

ved,

(p

artic

ular

ly

Mas

ter

plan

of

impr

ovem

ent o

f rur

al

acce

ss ro

ad p

repa

red

Mas

ter

Plan

for

the

ENER

acti

vity

ex

pans

ion

is

prep

ared

, Inv

estm

ent

in H

eavy

mat

eria

l is

defin

ed

Nee

ds A

sses

smen

t an

d To

R fo

r th

e pr

epar

ation

of

Feas

ibili

ty s

tudy

of

inte

grat

ed M

IS in

the

Min

istr

y of

Tra

nspo

rt

is p

repa

red

- Con

tinue

im

plem

entin

g th

e N

orth

-Sou

th C

orri

dor

thro

ugh

Atar

-Tid

jikja

-Ki

fa - I

mpr

ovin

g ru

ral

acce

ss th

roug

h pa

ving

an

d ta

rrin

g ru

ral

feed

ers

and

eart

h tr

acks

- Enh

anci

ng th

e ca

paci

ty o

f the

N

ation

al R

oad

M

aint

enan

ce

Aut

hori

ty

- Tec

hnic

al a

nd

Man

ager

ial

capa

city

bui

ldin

g of

the

Min

istr

y an

d Tr

ansp

ort,

pa

rticu

larl

y in

term

s of

dep

loym

ent o

f an

effec

tive

MIS

Feas

ibili

ty s

tudy

fo

r th

e ad

ditio

nal

segm

ents

Stea

dy

impl

emen

tatio

n of

the

on-g

oing

pro

ject

s an

d ap

prov

al o

f fina

ncin

g fo

r ne

w s

egm

ents

Prio

rity

rur

al a

cces

s ro

ads

base

d on

fair

te

chno

-eco

nom

ic

crite

ria

Mas

ter

Busi

ness

Pla

n fo

r th

e EN

ER a

ctivi

ty

expa

nsio

n is

pre

pare

d in

clud

ing

rene

wal

and

In

vest

men

t pla

n fo

r

Hea

vy m

ater

ial

Feas

ibili

ty s

tudy

of

inte

grat

ed M

IS in

the

Min

istr

y of

Tra

nspo

rt


PILL

AR

2 --

RU

RAL

DEV

ELO

PMEN

T A

ND

FO

OD

SEC

URI

TY (E

NER

GY)

Gov

ernm

ent

Goa

ls /

Str

ateg

ySo

urce

: PRS

P III

Curr

ent C

halle

nges

/ Bi

ndin

g Co

nstr

aint

sO

utco

mes

that

the

IDB

Gro

up E

xpec

ts to

Sup

port

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Exp

ects

to

Influ

ence

Dur

ing

the

MCP

S Pe

riod

IDB

Inte

rven

tion

sO

utpu

t

Sust

ain

grow

th b

y:

Incr

ease

d pr

oduc

tion

cap

acit

y

Prom

otion

of i

nter

conn

ecte

d ne

twor

k to

redu

ce t

he c

ost o

f po

wer

gen

erati

on

Rura

l ele

ctri

ficati

on

Dev

elop

men

t of l

ocal

syn

ergi

es

and

rene

wab

le e

nerg

y

• In

effici

ency

of S

tate

O

wne

d En

terp

rise

and

its

mon

opol

istic

nat

ure

• La

ck o

f inv

estm

ent

duri

ng p

ast 5

yea

rs

• En

ergy

pro

ducti

on

over

ly d

epen

dent

on

fuel

/di

esel

impo

rt

• Li

mite

d En

ergy

re

sour

ces

• Ra

te o

f urb

an

elec

trifi

catio

n in

crea

sed

from

50%

to 8

0%

• Ra

te o

f rur

al a

nd s

emi-

urba

n el

ectr

ifica

tion

incr

ease

d fr

om 5

% to

40

%.

• SO

MEL

EC b

ecom

es

a so

undl

y m

anag

ed

econ

omic

ally

and

fin

anci

ally

via

ble

orga

niza

tion

• Ex

ploi

tatio

n of

Ene

rgy

sour

ce p

oten

tial o

f co

untr

y es

peci

ally

Sol

ar

& G

as

• Si

gnifi

cant

ly im

prov

ed

acce

ss to

relia

ble

and

affor

dabl

e el

ectr

icity

• Ex

plor

e op

timiz

ation

of

Fue

l im

port

fina

ncin

g th

roug

h IT

FC fi

nanc

ing.

• O

MVS

and

nati

onal

ne

twor

ks a

re u

pgra

ded

to

cate

r fo

r ad

ditio

nal n

ew

gene

ratio

n ca

paci

ty

• Re

stru

ctur

ing

of S

tate

O

wne

d En

terp

rise

(S

OM

ELEC

) is

com

plet

ed

• So

lar

Ener

gy P

roje

ct fo

r hy

brid

izati

on o

f iso

late

d ne

twor

ks fi

nanc

ing

is

appr

oved

, co

ntra

ct fo

r co

nstr

uctio

n of

CSP

s aw

arde

d in

resp

ectiv

e re

gion

s.

• M

aste

r pl

an a

nd

Feas

ibili

ty s

tudy

for

upgr

adin

g an

d ex

pand

ing

the

tran

smis

sion

net

wor

k ar

e co

mpl

eted

Inte

rven

tions

to s

uppo

rt

• So

lar

Ener

gy a

nd re

late

d in

vest

men

ts in

Fou

m

Legl

eyte

dam

– E

l Gha

yre

zone

; and

Nbe

ykitt

La

hrat

h, D

har

zone

; in

Ade

l Ber

ou z

one)

.

• N

ouak

chott

–N

ouad

hibo

u tr

ansm

issi

on

conn

ectio

n

• Tr

ansm

issi

on N

etw

ork

Exte

nsio

n to

Sel

ibab

y,

Kiffa

, Aio

u, a

nd N

ema.

• D

evel

opm

ent o

f H

V tr

ansm

issi

on li

nes

(OM

VS).

Tech

nica

l Ass

ista

nce

in

build

ing

insti

tutio

nal

capa

city

and

str

uctu

re

for

the

deve

lopm

ent a

nd

stru

ctur

ing

of IP

P (P

PP)

Ener

gy p

roje

cts

Expl

ore

optim

izati

on o

f Fu

el im

port

fina

ncin

g th

roug

h IT

FC fi

nanc

ing.

Cont

ract

s aw

arde

d fo

r th

e co

nstr

uctio

n of

CSP

s in

resp

ectiv

e re

gion

s

Det

aile

d D

esig

n fo

r th

e ex

pans

ion

and

inte

rcon

necti

on o

f the

se

para

te n

etw

orks


PILL

AR

3 --

EN

HA

NCI

NG

AN

D D

IVER

SIFY

ING

TH

E M

OD

ERN

ECO

NO

MY

(PRI

VATE

SEC

TOR

DEV

ELO

PMEN

T)

Gov

ernm

ent G

oals

/ S

trat

egy

Curr

ent C

halle

nges

/ Bi

ndin

g Co

nstr

aint

sO

utco

mes

that

the

IDB

Gro

up E

xpec

ts to

Su

ppor

t

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Ex

pect

s to

Influ

ence

D

urin

g th

e M

CPS

Peri

od

IDB

Inte

rven

tion

sO

utpu

t

• Re

info

rcem

ent o

f str

uctu

ral

refo

rms;

• Im

prov

emen

t of b

usin

ess

clim

ate;

• Pr

omoti

on o

f gro

wth

sou

rces

; an

d

• D

evel

opm

ent o

f in

fras

truc

ture

s fo

r a

sust

aina

ble

grow

th.

• Ru

ral d

evel

opm

ent w

ith a

sp

ecia

l att

entio

n fo

cuse

d on

rain

ag

ricu

lture

and

live

stoc

k;

• Pr

omoti

on o

f the

acc

ess

of

the

poor

to a

dapt

ed fi

nanc

ial

serv

ices

and

the

deve

lopm

ent

of S

ME;

• Co

nser

vatio

n of

the

envi

ronm

ent a

nd it

s pr

omoti

on

as a

n ec

onom

ic a

sset

• Sl

ow fu

nctio

ning

and

ou

tdat

ed le

gal s

yste

m

• La

ck o

f ski

lled

staff

• La

ck o

f Man

agem

ent

skill

s

• W

eak

orga

nisa

tions

as

mos

t com

pani

es a

re

typi

cally

fam

ily-b

ased

bu

sine

sses

and

the

owne

r is

dom

inan

t.

• Li

mite

d M

arke

t kn

owle

dge,

whi

ch

trig

gers

lack

of m

arke

t da

ta.

• A

cces

s to

fina

nce

is d

ifficu

lt as

ban

ks

are

relu

ctan

t to

lend

gi

ven

the

scar

city

of

bank

able

pro

ject

s.

• Li

mite

d us

e of

IT

give

n a

lack

of s

kills

an

d of

infr

astr

uctu

re.

• Im

prov

e co

rpor

ate

gove

rnan

ce

• Su

ppor

t SM

E de

velo

pmen

t

• En

ablin

g en

viro

nmen

t for

Is

lam

ic fi

nanc

e/pr

ivat

e se

ctor

dev

elop

men

t

Boos

t inv

estm

ent i

n th

e fis

hery

sec

tor

• La

unch

cat

alys

t pr

ogra

ms

whi

ch a

re

busi

ness

ena

bler

to th

e pr

ivat

e en

trep

rene

urs

• Su

ppor

t pri

vate

pr

ojec

ts in

the

fishe

ry

sect

or

• En

sure

suffi

cien

t su

pply

of a

fford

able

ho

usin

g un

its a

nd

othe

r re

al e

stat

e in

fras

truc

ture

• Es

tabl

ish

the

Isla

mic

ba

nk o

f Mau

rita

nia

• SM

E de

velo

pmen

t &

prom

otion

of I

slam

ic

finan

cing

• Su

ppor

t pri

vate

en

trep

rene

ur p

repa

re

bank

able

pro

ject

s

• H

elp

SMEs

pro

mot

e co

rpor

ate

gove

rnan

ce

• Bo

ost t

he v

alue

cr

eatio

n in

the

fishe

ry

sect

or b

y de

velo

ping

th

e re

quire

d pl

atfor

m fo

r lo

cal

tran

sfor

mati

on o

f the

fis

hery

pro

duct

s

• Pr

ojec

t dev

elop

men

t Fa

cilit

y

• Is

lam

ic B

ank

of

Mau

rita

nia

• M

MI p

roje

ct

• Sp

ecia

l Eco

nom

ic

Zone

(SEZ

) of

Nou

adhi

bou


PILL

AR

3 --

EN

HA

NCI

NG

AN

D D

IVER

SIFY

ING

TH

E M

OD

ERN

ECO

NO

MY

(TRA

DE

FIN

AN

CE)

Gov

ernm

ent G

oals

/ S

trat

egy

Curr

ent C

halle

nges

/ Bi

ndin

g Co

nstr

aint

sO

utco

mes

that

the

IDB

Gro

up E

xpec

ts to

Su

ppor

t

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Exp

ects

to

Influ

ence

Dur

ing

the

MCP

S Pe

riod

IDB

Inte

rven

tion

sO

utpu

t

Trad

e Fi

nanc

e

1- C

omm

erci

al b

anks

’ tr

ansa

ction

s m

ainl

y co

ncer

n op

erat

ors

of

the

impo

rt –

exp

ort

sect

or, a

nd a

re

esse

ntial

ly b

ased

on

shor

t-te

rm fi

nanc

ing

2- T

he c

ost o

f Fin

anci

ng

is s

een

as v

ery

expe

nsiv

e, s

hort

term

fin

anci

ng o

ften

exc

eed

12%

pa

3- G

over

nmen

t co

mpa

nies

cou

ld

impr

ove

thei

r fin

anci

ng

cond

ition

s

4- S

MEs

nee

ds b

etter

te

rms

and

Cond

ition

s fo

r sho

rt te

rm fi

nanc

ing

5- E

xist

ent n

eed

in

food

stuff

, Agr

icul

ture

pr

oduc

ts, E

nerg

y an

d Pe

trol

eum

Sho

rt te

rm

finan

cing

1- R

egul

ar s

uppl

y of

Foo

dstu

ff a

nd

Agr

icul

ture

pro

duct

s an

d pr

ices

sta

bilit

y ag

ains

t spe

cula

tion.

Pa

rticu

lar

focu

s on

st

rate

gic

com

mod

ities

su

ch s

eeds

, fer

tiliz

ers,

w

hich

are

cri

tical

fo

r M

auri

tani

a fo

od

secu

rity

and

agr

icul

ture

de

velo

pmen

t.

2- F

inan

cing

SM

Es

in ta

rget

ed s

ecto

rs

thro

ugh

lines

of fi

nanc

e de

dica

ted

to lo

cal

bank

s.

3- F

inan

ce G

over

nmen

t Co

mpa

nies

in n

eed

of

shor

t ter

m fa

ciliti

es:

Petr

oleu

m a

nd E

nerg

y co

mpa

nies

, im

porti

ng

com

pani

es,

1- H

ave

Gov

ernm

ent

supp

ort i

n se

curi

ng

deal

s by

pro

vidi

ng

Gov

ernm

ent

guar

ante

es to

the

targ

eted

com

pani

es

2- H

ave

Gov

ernm

ent

invo

lvem

ent i

n fa

cilit

ating

the

cont

act

and

the

feas

ibili

ty

stud

ies.

1- S

ON

IMEX

, SO

MEL

EC

and

SOM

AGA

S fo

r pu

blic

com

pani

es

2- A

ll lo

cal b

anks

to

mat

eria

lize

lines

of

fina

ncin

g in

the

bene

fit o

f SM

Es

1- H

ave

ITFC

, an

d IC

IEC

as m

ain

part

ners

fo

r Pu

blic

sho

rt te

rm

need

s.

2- P

artic

ipat

e in

the

finan

cing

of s

trat

egic

co

mm

oditi

es in

favo

r of

pri

vate

and

Pub

lic

entiti

es


Cros

s-cu

tting

The

me:

CA

PACI

TY B

UIL

DIN

GCa

paci

ty B

uild

ing

for

Gen

eric

and

Sys

tem

ic W

eakn

esse

s

Gov

ernm

ent G

oals

/ S

trat

egy

Curr

ent C

halle

nges

/ Bi

ndin

g Co

nstr

aint

sO

utco

mes

that

the

IDB

Gro

up E

xpec

ts to

Su

ppor

t

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Exp

ects

to

Influ

ence

Dur

ing

the

MCP

S Pe

riod

IDB

Inte

rven

tion

sO

utpu

t

4th a

nd 5

th P

illar

s of

PRS

P-III

: Im

prov

ing

Gov

erna

nce

and

Capa

city

Bui

ldin

g Ec

onom

ic G

over

nanc

e an

d En

hanc

ing

Pilo

ting

, Mon

itor

ing,

Eva

luati

on a

nd C

oord

inati

on o

f the

PR

SP

- To

enha

nce

plan

ning

and

pr

ogra

mm

ing,

- To

deve

lop

the

stati

stica

l fu

nctio

ns a

nd in

form

ation

sy

stem

s,

- To

secu

re a

n effi

cien

t and

eff

ectiv

e m

anag

emen

t of p

ublic

re

sour

ces,

- To

impr

ove

the

insti

tutio

nal

and

orga

niza

tiona

l fra

mew

ork

- To

deve

lop

hum

an re

sour

ce,

- To

set u

p an

effi

cien

t m

onito

ring

and

eva

luati

on

syst

em a

nd c

onsi

sten

t rep

ortin

g in

stru

men

ts.

- Wea

k ca

paci

ty fo

r Pr

ojec

t Des

ign

and

Form

ulati

on (L

ack

of

Qua

lity

at E

ntry

)

- Wea

k di

men

sion

s of

Man

agem

ent f

or

Dev

elop

men

t Res

ults

(le

ader

ship

, mon

itori

ng

and

eval

uatio

n an

d bu

dget

pro

cess

es)

- M&

E U

nits

exi

st in

on

ly 5

0% o

f the

Pub

lic

Adm

inis

trati

on,

- M&

E is

not

a

perm

anen

t acti

vity

for

proj

ects

and

pol

icie

s,

- Wea

k ab

sorp

tive

capa

city

,

- Pla

nnin

g,

prog

ram

min

g,

mon

itori

ng a

nd

eval

uatio

n of

po

licie

s, p

roje

cts

and

prog

ram

mes

enh

ance

d,

- Pro

gres

sive

bui

ld-

up o

f the

sta

tistic

al

and

Mon

itori

ng

and

Eval

uatio

n sy

stem

s w

ithin

the

Adm

inis

trati

on,

- Ins

tituti

onal

and

or

gani

zatio

nal

fram

ewor

ks im

prov

ed,

- Cap

acity

of h

uman

re

sour

ces

in te

rms

of

pove

rty

anal

ysis

and

as

sess

men

t of p

olic

y im

pact

s st

reng

then

ed.

- Cap

acity

of

min

istr

ies

in p

olic

y fo

rmul

ation

, pla

nnin

g,

prog

ram

min

g, P

roje

ct

desi

gn a

nd fo

rmul

ation

, im

plem

enta

tion,

m

onito

ring

, aud

it an

d ev

alua

tion

enha

nced

,

- Tec

hnic

al C

apac

ity

for

Capa

city

Bui

ldin

g O

pera

tions

(Gra

nts

and

Loan

s)

- Ins

tituti

onal

and

O

rgan

isati

onal

bui

ldin

g op

erati

ons,

- Per

sonn

el a

nd c

adre

tr

aini

ng s

essi

ons,

- Rec

ruitm

ent o

f ex

pert

s fo

r in

-hou

se

Trai

ning

and

Edu

catio

n,

- Pro

moti

on o

f Re

gion

al C

oope

ratio

n (C

oope

ratio

n Fr

amew

ork

Agr

eem

ents

)

- Gov

ernm

ent E

ntitie

s co

ncer

ned:

MA

ED, M

F,

MPS

MA

, CPI

, GIS

, CoA

, A

PSM

, and

Sec

tora

l M

inis

trie

s.


Cros

s-cu

tting

The

me:

CA

PACI

TY B

UIL

DIN

GCa

paci

ty B

uild

ing

for

Gen

eric

and

Sys

tem

ic W

eakn

esse

s

Gov

ernm

ent

Goa

ls /

Str

ateg

yCu

rren

t Cha

lleng

es/

Bind

ing

Cons

trai

nts

Out

com

es th

at th

e ID

B G

roup

Exp

ects

to

Supp

ort

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Exp

ects

to

Influ

ence

Dur

ing

the

MCP

S Pe

riod

IDB

Inte

rven

tion

sO

utpu

t

Agr

icul

ture

, Liv

esto

ck a

nd F

ood

Secu

rity

- To

prom

ote

the

PPP

in th

e A

gric

ultu

re S

ecto

r

- To

enha

nce

Agr

icul

tura

l in

stitu

tions

(U

NCA

CEM

, SO

NA

DER

, SN

AAT

, Res

earc

h Ce

nter

s, A

gric

ultu

ral E

duca

tion,

)

- To

impr

ove

capa

city

of a

naly

sis,

pl

anni

ng, a

nd e

valu

ation

of t

he

Min

istr

y of

Rur

al D

evel

opm

ent,

- Wea

k ca

paci

ty o

f in

stitu

tions

,

- Lac

k of

app

ropr

iate

fr

amew

ork

for

priv

ate

parti

cipa

tion

in

agri

cultu

re s

ecto

r

- Wea

k en

tities

in c

harg

e of

ext

ensi

on s

ervi

ces

and

diss

emin

ation

- Ine

xist

ence

of a

pplie

d ag

rono

mic

rese

arch

,

- Lac

k of

stu

dies

of v

alue

-ch

ains

- Out

date

d fo

od s

ecur

ity

stra

tegy

- Att

racti

ve E

nviro

nmen

t fo

r PP

P in

Agr

icul

ture

se

t up,

- Cap

acity

of A

gric

ultu

ral

insti

tutio

ns e

nhan

ced

- App

licati

on o

f ag

rono

mic

rese

arch

in

crea

sed,

- Val

ue c

hain

s in

A

gric

ultu

re a

nd L

ives

tock

st

udie

s,

- Nati

onal

food

sec

urity

st

rate

gy re

view

ed,

- Ext

ensi

on S

ervi

ces

and

Dis

sem

inati

on e

nhan

ced,

- Neg

otiati

on o

f PPP

Co

ntra

cts

- Str

engt

heni

ng o

f st

atisti

c an

alys

is c

apac

ity

- Tur

naro

und

plan

of

UN

CACE

M, S

ON

AD

ER

- Cap

acity

Bui

ldin

g fo

r SN

AAT

- Ins

tituti

onal

Sup

port

in

term

of s

anita

ry c

ontr

ol

of li

vest

ock

prod

ucts

- Tec

hnic

al C

apac

ity

for

Capa

city

Bui

ldin

g O

pera

tions

(Gra

nts

and

Loan

s)

- Mas

ter

plan

for

attri

butio

n of

land

plo

ts

unde

r PP

P co

ntra

cts

- Tar

gete

d Tr

aini

ng

Sess

ions

- Ins

tituti

onal

Bui

ldin

g

- Tec

hnic

al C

oope

ratio

n w

ith ID

B m

embe

rshi

p,

Fish

erie

s

- To

incr

ease

the

Gov

ernm

ent

Insti

tutio

nal a

nd T

echn

ical

Ca

paci

ty to

man

age

the

fish

stoc

k re

sour

ces

- Wea

k go

vern

ance

- Ove

ruse

of fi

sh s

tock

s

- Str

engt

heni

ng o

f Re

sear

ch in

fish

erie

s Se

ctor

for

Opti

mal

ex

ploi

tatio

n of

fish

sto

cks

- Enh

ance

the

capa

city

of

the

Min

istr

y ca

dre

in te

rm

of fi

sh s

tock

man

agem

ent

tool

s

- Tec

hnic

al C

apac

ity

for

Capa

city

Bui

ldin

g O

pera

tions

(Gra

nts

and

Loan

s)

- Tar

gete

d Tr

aini

ng

Sess

ions

,


Cros

s-cu

tting

The

me:

CA

PACI

TY B

UIL

DIN

GCa

paci

ty B

uild

ing

for

Gen

eric

and

Sys

tem

ic W

eakn

esse

s (C

onti

nued

)

Gov

ernm

ent G

oals

/ S

trat

egy

Curr

ent

Chal

leng

es/

Bind

ing

Cons

trai

nts

Out

com

es th

at th

e ID

B G

roup

Exp

ects

to

Supp

ort

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Ex

pect

s to

Influ

ence

D

urin

g th

e M

CPS

Peri

od

IDB

Inte

rven

tion

sO

utpu

t

Hea

lth

Sect

or

- To

prep

are

the

Hea

lth S

ecto

r St

rate

gy

- Lac

k of

cle

ar a

nd

artic

ulat

ed s

trat

egy

- Lac

k of

ade

quat

e st

aff

- Wea

k m

anag

eria

l ca

paci

ty

- Pre

para

tion

of th

e H

ealth

Sec

tor

Stra

tegy

- Cre

ation

and

Eq

uipm

ent o

f la

bora

tory

for

cont

rol

of d

rugs

qua

lity

- Tec

hnic

al C

apac

ity

for

Capa

city

Bui

ldin

g O

pera

tions

(Gra

nts

and

Loan

s)

- Tar

gete

d Tr

aini

ng

Sess

ions

- Ins

tituti

onal

Bui

ldin

g (s

choo

l of p

ublic

he

alth

, par

amed

ical

ed

ucati

on)

Tran

spor

t

- To

build

cap

acity

in th

e m

aint

enan

ce o

f roa

ds n

etw

ork

- To

enha

nce

mon

itori

ng

and

eval

uatio

n ca

paci

ty,

man

agem

ent o

f con

cess

ion

cont

ract

s fo

r th

e D

irect

orat

e of

Pla

nnin

g, C

oope

ratio

n an

d Re

sear

ch

- Wea

k ca

paci

ty in

m

aint

enan

ce o

f roa

ds,

- Wea

k ca

paci

ty in

de

sign

, mon

itori

ng

and

eval

uatio

n

- EN

ER’s

Cap

acity

En

hanc

ed,

- Fun

ction

s of

des

ign,

m

onito

ring

and

ev

alua

tion

of p

roje

cts

stre

ngth

ened

,

Setti

ng-u

p of

Te

chni

cal U

nit f

or

Proj

ects

Des

ign

with

in th

e D

irect

orat

e of

Tra

nspo

rt

Infr

astr

uctu

re

- Tec

hnic

al C

apac

ity

for

Capa

city

Bui

ldin

g O

pera

tions

(Gra

nts

and

Loan

s)

- Tra

inin

g Se

ssio

ns o

f A

gent

s an

d ca

dre

of

ENER

- Tra

inin

g in

Pla

nnin

g an

d fo

rmul

ation

of

Tran

spor

t Pro

ject

s


Cros

s-cu

tting

The

me:

CA

PACI

TY B

UIL

DIN

GCa

paci

ty B

uild

ing

for

Gen

eric

and

Sys

tem

ic W

eakn

esse

s (C

onti

nued

)

Gov

ernm

ent G

oals

/ S

trat

egy

Curr

ent C

halle

nges

/ Bi

ndin

g Co

nstr

aint

sO

utco

mes

that

the

IDB

Gro

up E

xpec

ts to

Su

ppor

t

Inte

rmed

iate

Res

ults

th

at ID

B G

roup

Ex

pect

s to

Influ

ence

D

urin

g th

e M

CPS

Peri

od

IDB

Inte

rven

tion

sO

utpu

t

Elec

tric

ity

- To

enha

nce

the

capa

city

of

iden

tifica

tion,

form

ulati

on a

nd

nego

tiatio

n of

PPP

Ele

ctri

city

Pr

ojec

ts

- To

enha

nce

the

capa

city

of

impl

emen

tatio

n of

rur

al

elec

trifi

catio

n pr

ojec

ts a

nd

Rene

wab

le E

nerg

y Pr

ojec

ts

- Wea

k ca

paci

ty

in id

entifi

catio

n,

form

ulati

on o

f PPP

En

ergy

pro

ject

s

- Ins

tituti

onal

fr

amew

ork

of e

nerg

y pr

oduc

tion

outd

ated

,

- Wea

k ca

paci

ty o

f im

plem

enta

tion

of

rura

l ele

ctri

ficati

on

and

rene

wab

le e

nerg

y pr

ojec

ts

- Lac

k of

mas

ter

plan

for

Elec

tric

ity

dist

ribu

tion

grid

- Setti

ng-u

p of

the

Age

ncy

for

Rene

wab

le

Ener

gy

- Rev

iew

of t

he

Insti

tutio

nal

Fram

ewor

k fo

r En

ergy

Pr

oduc

tion

- To

revi

ew th

e in

stitu

tiona

l Fr

amew

ork

of E

nerg

y Pr

oduc

tion,

- Mas

ter

Plan

for

Elec

tric

ity D

istr

ibuti

on

Gri

d

- Pre

para

tion

of th

e st

rate

gy o

f Ren

ewab

le

Ener

gy

- Tec

hnic

al C

apac

ity

for

Capa

city

Bui

ldin

g O

pera

tions

(Gra

nts

and

Loan

s)

- Tar

gete

d Tr

aini

ng

Sess

ions

in P

PP

Cont

ract

s ne

gotia

tion,

- Rev

erse

link

age

agre

emen

ts b

etw

een

Mau

rita

nia

and

IDB

mem

ber

coun

trie

s in

Ru

ral E

lect

rific

ation

an

d Re

new

able

En

ergy

,

member country partnership strategy of the ......mcps for mauritania, 2011-2015 member country...

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