Executive Summary

The Islamic Republic of Mauritania is a Sahelian country (1.09 million sq. km) but with only 3 million people. Mauritania shares borders with the Morocco and Algeria to the north, Mali to the east and south, and Senegal to the south. The country is about 90% desert.

Mauritania forms a geographic link between North and Sub-Saharan Africa. It has long been associated with a historical tradition of north-south trade and a culture favorable to free markets, personal mobility, and entrepreneurship.

Mauritania offers a small but rapidly growing market with a per capita GDP estimated at $663 in 2005 and a population growth rate of 3 percent. Offshore oil production, which began in February 2006, copper and gold production, and large foreign-financed investments in infrastructure boosted the 2006 nominal GDP by nearly 50 percent, with real GDP increasing by nearly 19 percent. Real non-oil GDP was expected to increase by about 6.8 percent in 2006, according to Government and IMF projections.

Over the past decade the Government of Mauritania has become increasingly open to foreign trade and investment. With the support of the World Bank, the International Monetary Fund (IMF), and other donors, the Government has liberalized the exchange system, reformed the fiscal and financial systems, and privatized a number of parastatals.

Mauritania’s external position improved in 2006 in terms of trade: exports and imports as a percentage of nominal GDP reached 32 and 38 percent respectively in 2005; the projections for 2006 were 59 and 26 percent respectively. Almost all of the country's consumer goods are imported, covered only partially by exports - principally iron ore, fish, and oil. The external current account was projected to have a surplus of about three percent of GDP by the end of 2006 despite the increased cost of imported fuel.

Mauritania's liberal economic policies, coupled with the advent of petroleum production and exports, should favor continued capital inflows and economic growth.

Mauritania’s major challenges continue to be persistent poverty affecting nearly 40 percent of the population, and limited diversification of exports.

Tariffs and taxes are still high in comparison with neighboring countries (some import taxes are as high as 45 percent).

Infrastructure in the country is limited but improving. Communication problems continue to exist. However, these limitations do not constitute a serious obstacle to trade and investment. Arabic is the official language in Mauritania, but French is used in all international business activities.

Increased housing, land, and electricity prices are becoming worrisome for investors.

Labeling on all packages and containers is required to be in Arabic or Latin characters. It should include the nature, quantity and quality of the product, production and expiration dates, and the country of origin.

The importation of alcohol, pork, and firearms is prohibited.