28 Nov Interview with Abdessalam Ould Mohamed Saleh, Minister of the Economy and Sustainable Development
Business Focus: Mauritania’s economy has grown progressively, rising by 2.4% in 2021 and 5.2% in 2022. The country’s new found oil and gas and mining potential mixed with fishery and agriculture industry are currently fueling this growth. In 2023 and 2024, it is expected that growth should be around 6.5%. To start the interview, can you tell us about the big trends that you see in the Mauritanian economy, the major sectors, and as we are soon closing 2023 year, what would you conclude about the performance of the economy?
Abdessalam Mohamed Saleh: After grappling with the economic repercussions of the Covid-19 pandemic, Mauritania is experiencing a notable recovery. In 2022, the country achieved a remarkable economic growth rate of 6.4%. Projections for 2023 suggest continued positive momentum with an expected growth rate of approximately 4.8%, while the outlook for 2025-2026 anticipates growth rates surpassing 5%. These promising economic trends are attributed to a combination of ongoing reforms, substantial infrastructure projects, and the burgeoning potential of extractive industries.
Key economic indicators from recent reviews of the macroeconomic program, supported by the International Monetary Fund (IMF), are consistently positive, reflecting the effectiveness of the reform agenda.
In the extractive sector, significant projects include:
- The Fdeirick project, slated to contribute 2-3 million tons by 2025.
- The Elaouj project, involving 11 million tons, is under discussion in a shareholder agreement between the national company Société Nationale Industrielle et Minière de Mauritanie (SNIM) and an Australian partner.
- Other joint ventures totaling 10 million tons are in advanced stages of negotiation.
The gold production has doubled in recent years, with the Tasiast mine, operated by Kinross, now ranking as the tenth-largest gold mine in the continent. Ongoing exploration activities encompass various minerals, including gold, iron ore, uranium, and rare earth.
Anticipated for the upcoming year is the commencement of gas production from a joint field owned by Mauritania and Senegal, operated by BP and Kosmos Energy, with an initial production rate of 2.5 million tons per annum. Discussions are ongoing for the development of the Birallah gas field in Mauritania.
Simultaneously, efforts continue to enhance the performance of fisheries and agriculture, vital sectors dependent on local processing and value addition. Transformation in these sectors is expected around 2028, coinciding with the availability of a lower-cost and reliable source of locally produced energy.
BF: How are you planning to leverage and use the new revenues you will get from the energy sector? How are you working to equally spread these revenues?
Abdessalam Mohamed Saleh: We must approach the prospects of newfound revenues with a sense of realism, acknowledging the substantial expectations associated with them. Drawing insights from the experiences of other nations, it becomes evident that realizing significant benefits from oil and gas revenues often takes a considerable span of 10 to 15 years. Achieving levels of revenue that profoundly impact the lives of citizens necessitates careful consideration and strategic planning.
To ensure the equitable and responsible use of these resources across generations, there is a strategic initiative to establish a National Sovereign Fund. The primary focus of this fund will be directed toward investments, with a keen emphasis on securing a significant portion for the benefit of future generations. Additionally, a portion of these resources will contribute to the national budget through a combination of direct and indirect taxation revenues. This multifaceted approach aims to prevent any wastage of funds and to secure lasting benefits for both current and future generations.
BF: The agriculture sector occupies a large share of the economy and currently employs around 50% of the population. Last July, the African Development Bank released $750,000 dollars to encourage and sustain the livestock industry. Tell us a little bit about the potential of the agriculture sector. What kind of measures need to be implemented to unleash the potential of this sector?
Abdessalam Mohamed Saleh: The agricultural potential of our region has always been apparent, but three significant constraints have hindered the sector’s realization of its full potential. The first and foremost challenge is energy, a factor that has impeded the sector’s transformation. It is unreasonable to expect farmers to invest in their activities when a substantial portion, possibly 50% of the value they produce, might go to waste due to inadequate storage options. This is especially pertinent to horticulture and livestock products. The primary focus now is to ensure that farmers, particularly in irrigable areas, have access to reliable and affordable energy sources. Various projects are currently underway and will be implemented in the upcoming months to address this crucial need.
The second constraint revolves around market access, encompassing both local and international markets. Ongoing dialogues with the private sector aim to establish well-functioning markets, tackle infrastructure challenges, and address standards compliance. Positive developments are observable near the Senegal River, with the introduction and even exportation of new crops last year. While the sector is making gradual progress, continuous support is essential to sustain its upward trajectory.
The third constraint pertains to research and extension services. Although SONADER (Company Nationale pour le Développement Rural) currently provides extension services, there is a recognition that more must be done. Consequently, a restructuring process for SONADER has been initiated, recognizing its critical role in bringing contemporary knowledge and technology to farmers. This necessitates investments from the public sector and fosters robust collaboration between the public sector, private sector, and farmers. Long-term research, especially within the context of regional collaboration with neighboring countries, both from the south and north of Africa, is crucial to the sector’s sustainable development.
BF: What is Mauritania and your ministry doing to diversify the industrial base of the country, and to encourage SMEs, entrepreneurs, and Start Ups to play a more significant role?
Abdessalam Mohamed Saleh: The diversification of our economy encounters various challenges, primarily the imperative to upgrade our connectivity and energy infrastructures, cultivate the right skills for our economic landscape, and expand and diversify our banking and finance sector. These challenges have notably impeded the growth of small and medium-sized enterprises (SMEs). To address these issues, we are proactively engaged in efforts to mitigate obstacles for SMEs and startups and foster entrepreneurship. The government’s initiatives in this domain have received support from several partners, both bilateral and multilateral.
As part of these initiatives, we have established a dedicated institution, the APIM, tasked with promoting and supporting private investment. Collaborating with our partners, we have expanded vocational training programs and are actively developing large-scale public and private internship programs. In the infrastructure sector, the government has enacted a law governing public-private partnership financing, aligning with the best international standards. Encouragingly, there have been positive experiences with international private investors, signaling progress in this domain.
In the energy sector, last year, we introduced an electricity code designed to promote private investment and competition, with a focus on attracting more private investments in highways, energy, and water infrastructure. To address the financing needs of small and medium-sized enterprises, the government has advocated with our partners to increase funding for the private sector. This advocacy has resulted in the provision of close to $100 million in lines of credit to the banking system, intended to support SMEs, with expectations of more support in the coming months.
BF: Mauritania is one of the most impacted countries in Africa by climate change. In July, Mauritania and the European Union launched the ‘affordable access to clean, renewable energy’ program to develop the potential of renewable energies. Can you tell me what the government is doing to enhance the resilience of the country against climate change to protect the citizens? What kind of initiatives would you like to highlight in that regard?
Abdessalam Mohamed Saleh: Our nation faces significant climate vulnerabilities, exposed to droughts, floods, and high temperatures, particularly impacting our coastal ecosystems. Addressing climate change is a priority, and we are actively engaged in cooperation with the Millenium Challenge Corporation (MCC), focusing on adaptation and mitigation measures. As part of our nationally determined contributions (NDCs), we aim to enhance disaster risk management practices and institutions. Mauritania actively participates in the Africa Great Green Wall initiative, collaborating with other African countries and receiving support from various international entities, including the United States.
In our adaptation program, we support farmers in better managing water and land resources, promoting good agricultural and livestock practices. The emphasis is on training, capacity building, and encouraging collaborative efforts among farmers to address climate challenges.
On the mitigation front, despite not being a significant greenhouse gas emitter, we see the global climate action agenda as an opportunity for developing countries to leverage their renewable energy potential. Africa, with its substantial solar radiations, holds a unique position. We have developed an ambitious long-term vision for our energy and mining sector, emphasizing the scaling up of wind and solar resources for domestic use and green hydrogen production.
Mauritania boasts more than 4,000 GW of potential renewable energy, with 500 GW immediately developable. The north-western part, with a combination of wind and solar energy, is ideal for almost continuous renewable energy availability. Green hydrogen production, estimated at $1.3 per kilo initially, holds significant economic potential. This includes exports and local uses, such as green steel, aligning with the interests of European Union (EU) and United States partners.
Harnessing this potential involves agreements with both public and private partners. The recent launch of the Team Europe Initiative for Green Hydrogen Development in Mauritania marks a crucial step, potentially accelerating green hydrogen production in the country.
As we transition, we recognize the need to lay the foundations for robust economic growth. This entails maintaining macroeconomic stability, investing in infrastructure, and building skills to attract substantial private investment. While our real economic growth potential may be realized by the end of the decade, we acknowledge the importance of a strong social protection program to ensure societal well-being, address inequality, and tackle extreme poverty challenges during this transitional phase.
BF: What is your final message for the readers of USA Today?
Abdessalam Mohamed Saleh: Mauritania is a welcoming destination for foreign direct investment, offering a unique combination of mining, renewable energy, and gas resources. Positioned to become a hub for the production and export of low-carbon energy and green minerals, our country invites investors to participate in this transformative journey. Embracing this challenge is not just our endeavor; it’s an opportunity for all stakeholders to contribute to sustainable development. Come and be a part of this collective effort.