Mauritania is a West African country located on the western edge of the Sahara desert, with a population of approximately 3 million people that is mostly concentrated in the urban areas. The country is in part desert (3/4 of the 1,030,700 square kilometers of the territory). Since independence in the 1960s, Mauritania's economy has been dependent on natural resources, iron ore first then combined with fisheries, and presently oil and other minerals. The severe droughts of the 1960s and 1970s, which generated migration from rural to urban areas and created pressures on the country's administration through increased demand for education, housing, employment, health, administrative and other services, which continue up to today. Mauritania's eligibility to the multilateral debt relief initiative in 2006, the beginning of oil exports, the successive food, financial and political-institutional crises, as well as the mining sector boom, were the major factors in the changes in economic aggregates over this period. Mauritania's economic performance deteriorated sharply in 2008-09 on the back of these domestic and external shocks. Real gross development product (GDP) contracted from 5.9 percent in 2007 to -1.2 percent in 2009. The external positions weakened from a deficit of 9 percent of GDP in 2007 to 12.3 percent of GDP in 2009, and international reserves only covered about two months of imports. The government launched the Special Intervention Programme (programme special d'intervention - PSI) in 2008 to reduce the impact of the food crisis on the population. The country faces several key challenges in its recovery, including a narrow productive base, vulnerability to external shocks, a weak business climate, and persistent poverty levels in the rural sector. While the government has an integrated reform agenda on Public Finance Management (PFM), this report highlights a number of bottlenecks that affect the planning and execution of expenditures affecting development goals, and offers a set of prioritized, sequenced measures that mitigate them.
