Mouhamed Kebe of Geni & Kebe provides an introduction to the business environment in Mauritania

With an estimated population of 2.6 million inhabitants, and an area of 1,030,700 km2, the Islamic Republic of Mauritania (RIM) is described as a natural resources rich country. Mining, fishing and oil are the pillars of the economy of the country. In addition to this potential, the banking sector which has experienced a net increase of banks and microfinance institutions, a policy of incentives for investment and the will of the state to create a stock exchange have contributed to reinforce the overall economy of the State.

The legislative framework for financial and banking system

Financial and banking systems in Mauritania are governed by Ordinance No. 020/2007 on the regulation of credit institutions, repealing and replacing Law No. 95-011, on the regulation of credit institutions, and instructions No. 1-6 / GR / 2008.

The Ordinance No.005-2007 on January 12 2007 regulating microfinance institutions and its implementing regulations.

Issues and potential challenges for banks, financial institutions in Mauritania

The banking sector has undergone a long process of evolution since 1990.

In recent years, the banking landscape in Mauritania recorded a proliferation of national and foreign banks. This situation is justified in part by a growth rate steadily rising in the national economy and secondly, by the recent discovery of several precious metals (gold, copper) and ongoing oil research. Thus, more than 20 banks with the majority of shares held by nationals, have obtained approvals from Central Bank of Mauritania (BCM).

Despite the introduction of these new banks, the banking lending rate is less than 4%.

The BCM has launched in recent years, a series of reforms of the legal and regulatory framework of the financial system. These efforts to modernise and stabilise the banking sectors continued in 2013 with the opening of branches encouraging banking penetration outside of Nouakchott and Nouadhibou.

In addition, a strategy developed with the assistance of World Bank aims at consolidating stability in the banking sector and strengthening banking supervision by the imposition of higher capital standards. Mauritanian banks have substantial liquidity buffers and are well capitalised.

However, today, these banks continue to show strong characteristics of emerging banks, namely the concentration of capital in the hands of a major shareholders, the concentration of the bank's operations for the benefit of affiliated customers or close to the main shareholder.

Microfinance institutions

The emergence of the microfinance sector in Mauritania is took place in the middle of the 90’s.

The promulgation of Ordinance No. 005-2007 on the regulation of institutions Microfinance dated January 12 2007 and its implementing regulations, revolutionised the microfinance sector in the country and brought innovations, namely:

• New regulations which outlined that the Central Bank of Mauritania is the sole regulator of the microfinance sector;
• Subdivision of microfinance institutions in three categories;
• Encouraging MFIs to exercise their networking activities;
• The requirement for any institution authorized to belong to the professional association of MFIs whose statutes are approved by the BCM; and
• The implementation of a specific chart of accounts to microfinance.

The area has 99 institutions, including 51 Savings and Credit (CAPEC) and 20 Savings Banks and Credit Husbandry (CECEL), with an estimated customer to 207,000 customers.

The loans distributed in 2012 reached 14.8 billion Ouguiyas. These amounts are mainly granted by UNCACEM (88%) and CAPEC (4%). The total of savings collected amounts to 5 billion of which 85% for the CAPEC.

In 10 years the number of clients has been multiplied by 15, which shows the sector's vitality despite its relative youth. This sharp increase is also to correlate with the need for financial services by poor people representing over 40% of the population.

Towards the creation of a stock exchange in Mauritania

The development of the financial sector in Mauritania requires the establishment of a modern capital market in line with international standards and taking into account the economic, social and cultural characteristics of this country.

In its financial sector development strategy for the period 2012-2017, the Mauritanian authorities are planning to establish a stock exchange in Nouakchott that will enhance the stability and transparency of the sector, access to financial services at reasonable cost for all actors and the development of the culture of savings and credit.

The emergence of such stock exchange is the response to the economic dynamics which the country has experienced in the last years and in which the growth rate has reached 6.9% in 2013 and exceeded 5% on average.

Legal incentives for investment

The adoption of a code of investment incentives, the improvement of the business environment and the implementation of basic infrastructure have boosted the private sector and foreign investment in Mauritania.

The country has significant potential for investment in the mining, gas, petroleum, agriculture and tourism sectors but also in the fields of training, education and health among others.

A satisfactory macroeconomic situation as assessed by the IMF and World Bank, with a growth rate of 6%, 5% controlled inflation and a foreign exchange reserve net increase of 7% ($1 billion) are indicators of the degree of development of the national economy.

Despite its attractive policies and its above mentioned potentials, challenges still remain mainly: regional insecurity, the national territory and geographical differences between the cities but also the small domestic market, the unstable political climate, social dislocations and low quality of legal and judicial services.

Mouhamed Kebe


Geni & Kebe