28 Nov Interview with Mohamed Bouna Moctar, CEO Bank El Amana (BEA), Mauritania
Business Focus: Mauritania’s financial sector remains fairly stable, despite the COVID-19 pandemic. Currently, 18 domestic and foreign banks operate in Mauritania, and the sector has supported the growth of the country’s economy. However inflation is a key problem for Mauritania, rising from 3.8% in 2022 to 9.6% in 2022. What are the government and the banking sector of Mauritania doing to mitigate the challenge of inflation.
Bouna Moctar: Mauritania has demonstrated resilience in managing the challenges posed by the pandemic. However, the recent surge in global prices of raw materials and energy, driven by the conflict in Ukraine, has contributed to inflationary pressures. In response, the authorities have implemented robust measures to address the situation.
A key measure involved a proactive tightening of monetary policy. In August 2022, the Central Bank of Mauritania (BCM) decided to raise its key interest rate by 200 basis points, reaching 7%. This strategic move aimed to mitigate excess liquidity in the economy, thereby helping to curb inflationary trends.
Furthermore, there has been a heightened focus on foreign exchange market interventions since May 2022. These interventions play a crucial role in regulating import financing, contributing to the stabilization of the economy by managing excess liquidity effectively. To fortify bank deposits at the Central Bank, the mandatory reserve rate was increased from 6% to 8%. This adjustment signifies an unremunerated reserve that banks maintain with the Central Bank, effectively reducing available liquidity in the market.
Noteworthy financial governance reforms have been implemented, mandating the appointment of independent managers in banks to enhance transparency. Audits of pandemic-related expenditures and the disclosure of legal owners of companies securing COVID-19-related contracts underscore the commitment to accountable resource management. Mauritania has taken significant steps to address the challenge of inflation. These include a prudent monetary policy, governance reforms to strengthen the financial sector, and strategic budgetary adjustments. These comprehensive efforts are designed to ensure economic stability and foster sustained long-term growth, even in the face of inflationary pressures.
BF: New discoveries of gas are preparing the country to become an exporter during the global energy crisis, which could be quite lucrative. How important are future gas projects such as in Greater Tortue Ahmeyim to position Mauritania as an regional energy player , and to what extent local banks support this new industrial growth in the country?
Bouna Moctar: The Ahmeyim (GTA) project, boasting substantial gas reserves estimated at 1,400 billion cubic meters, stands as one of Africa’s paramount endeavors. BP has outlined its ambitious plans for expansion over a minimum of 20 years, signaling the project’s strategic significance. Mauritania’s advantageous position along the Atlantic Ocean, in proximity to Europe and facing the United States, positions it favorably to meet the surging demand for gas in both regions, supported by logistical efficiencies.
President Mohamed Ould Cheikh El Ghazouani, recently affirmed BP’s commitment to expedite the Ahmeyim project, targeting the commencement of gas exports from the upcoming year. Additionally, the collaboration between Qatar Energy Company and Shell in hydrocarbon exploration projects in Mauritania underscores the nation’s escalating appeal to global investors.
The realization of such monumental projects demands substantial investments and sustained backing for the involved stakeholders. Herein lies the pivotal role of local banks, providing crucial financial support to subcontractors, local entities, and international companies, facilitating the successful execution of these major initiatives. Through active engagement in these partnerships, local banks not only exhibit confidence in the economic viability of Mauritania’s energy sector but also contribute significantly to its advancement.
Local banks extend dematerialized account management solutions, ensuring streamlined access for large investors. Furthermore, they offer a comprehensive suite of financial advice and assistance, fostering the prosperity and progress of investors involved in these transformative projects.
BF: To what extent do banks contribute to helping the government to diversify its activities beyond the extractive and agricultural sectors?
Bouna Moctar: The Mauritanian economy is predominantly centered on traditional sectors, notably mining and fishing, exposing it to vulnerabilities stemming from fluctuations in commodity prices, climatic uncertainties, and variations in global demand for fish. To mitigate this dependence and foster economic diversification, banks assume a pivotal role, contributing to several key initiatives:
Support for Fishing: Banks actively finance the fishing industry, facilitating the modernization of equipment, promoting sustainable practices, and fostering the development of seafood processing. These efforts aim to create added value, thereby reducing sensitivity to hazards associated with traditional fishing practices.
Promotion of Agro-Industry: Banks participate in agricultural projects, contributing to the modernization of irrigation infrastructure and encouraging the processing of agricultural products. This strategy not only reduces food dependence but also stimulates employment opportunities, enhancing resilience against economic shocks.
Support for Entrepreneurship: Local banks play a crucial role in facilitating access to financial services for Small and Medium Enterprises (SMEs) and entrepreneurs. By doing so, they empower these entities to diversify their activities, fostering innovation and contributing to economic dynamism.
Infrastructure Financing: Banks contribute to the strengthening of infrastructure, actively participating in initiatives aimed at improving the overall business environment. This support is integral to promoting economic diversification and creating an enabling framework for sustained growth.
Investment in Renewable Energy: Recognizing the importance of reducing dependence on traditional fuels, banks allocate funds to projects in the renewable energy sector. This investment aims to drive the transition toward cleaner and more sustainable energy sources.
Promotion of the Manufacturing Industry: Local banks actively support the development of the manufacturing industry. This includes financing the establishment of new factories and the modernization of existing production facilities, contributing to the growth and diversification of the sector.
Access to International Markets: Banks play a pivotal role in helping Mauritanian companies expand into international markets. This support promotes exports, diversifying sources of income for businesses and contributing to the overall economic resilience of the nation.
BF: Financial inclusion is a major problem in Mauritania. According to the Administration of international trade, only 21% of Mauritanians had a bank account in 2022. What is the banking sector doing to popularize the use of banks beyond the big cities?
Bouna Moctar: Financial inclusion in Mauritania has faced challenges rooted in limited access to financial services, prevalent cash transactions, and the necessity to enhance public awareness of financial products. In response to these challenges, mobile payments have emerged as a popular alternative since 2020, driven by robust communication campaigns led by banks and supported by a legal framework governing transactions.
Key points regarding the evolution of mobile payments in Mauritania include:
Rapid adoption: Mobile payments have experienced rapid adoption, evident in the surge of users from 270,000 in December 2021 to 800,000 in September 2023. This remarkable growth underscores the responsiveness of the population to alternative financial solutions.
Limited traditional bank accounts: Despite the increase in mobile payment users, a significant portion (140,000) remains without traditional bank accounts. This highlights the ability of mobile payment applications to reach segments of the population that may have been excluded from traditional banking services.
Increased financial inclusion: The influx of mobile payment users has substantially contributed to the financial inclusion landscape, with 38% of the population engaging in mobile payments or possessing traditional bank accounts. This marks an impressive 80% increase in new users of financial services within a relatively short time frame.
Low traditional banking rate: Notably, the traditional banking rate in Mauritania stands at only 21%. The rapid growth of mobile payments is particularly significant in light of this lower rate, emphasizing the transformative impact of digital financial solutions.
Smartphone adoption: The widespread adoption of smartphones, coupled with access via USSD for remote areas, has played a pivotal role in driving the popularity of mobile payments. This tech-savvy approach has enabled financial inclusion beyond urban centers.
Future opportunities: To enhance the effectiveness of banking services, there is a recognition of the need to develop and popularize digital banking products. Digital Banks, characterized by practicality and speed, offer additional functionalities and higher usage limits compared to mobile payment applications, providing a more comprehensive and efficient banking experience for the population.
The success of mobile payments in Mauritania reflects not only a response to existing challenges but also the potential for technology-driven financial inclusion to bridge gaps and empower a broader segment of the population.
BF: The country is also increasing its spending on SMEs to support growth of innovation and creating a stronger private sector. According to the Group of the African Development Bank, private sector financing has increased by 16.4% since 2021. What is the banking sector doing to promote growth of the private sector and SMEs, and to promote entrepreneurship in the country?
Bouna Moctar: The landscape of small and medium-sized enterprises (SMEs) in Mauritania reveals a dynamic customer segment with a growing funding envelope. While acknowledged as a potentially risky sector by banks, efforts are underway to actively engage with SMEs, fostering their growth and development.
Key points regarding SMEs and access to credit in Mauritania include:
Growing Funding Envelope: The funding envelope allocated to SMEs is on the rise, showcasing the recognition of their importance as a dynamic and evolving customer segment.
Risk perception: Banks often perceive SMEs as a risky customer segment, leading to challenges in providing them with access to credit. Land security requirements are common, reflecting the perceived risk associated with SMEs.
Mitigating challenges: Banks are actively addressing the challenges associated with SME financing. Initiatives include working on innovative financial solutions and collaborating with government institutions and development organizations.
Objective of accessibility: The primary objective is to enhance the accessibility and affordability of credit for SMEs while simultaneously minimizing associated risks. This involves the development of innovative financial products tailored to the needs of SMEs.
Partnerships for risk mitigation: Collaborations with government institutions and international development organizations aim to secure portfolio guarantees for SME loans. This strategic approach reduces the perceived risk for banks, encouraging more lending to SMEs.
International collaborations: Specific funds allocated through international collaborations focus on financing SMEs. This not only addresses financial constraints but also contributes to the overall growth and development of SMEs.
Commitment to support: Despite the inherent obstacles, banks in Mauritania maintain a strong commitment to supporting SMEs. Their role extends beyond providing financial assistance to actively contributing to the creation of a business-friendly environment.
Capacity strengthening: Banks are engaged in efforts to strengthen the capacities of SMEs, recognizing the importance of empowering these enterprises for sustained growth.
Innovation in financing: Financial institutions are exploring innovative approaches to overcome financing challenges for SMEs. These may include tailored financial products, flexible repayment structures, and responsive support mechanisms.
The commitment of Mauritanian banks to SMEs extends beyond financial support to encompass creating an enabling environment, building capacities, and fostering innovation. The collaborative efforts with international partners signal a concerted approach to address challenges and promote the vital role of SMEs in the country’s entrepreneurship and private sector growth.
BF: Digitization is a top priority in Mauritania’s national development strategy. In 2020, the country saw the emergence of its first digital banks, which launched a new financial technology market. How would you assess the level of digitization of banks in Mauritania, and in particular of your bank?
Bouna Moctar: The digitalization of financial services has become an indisputable priority in response to the recent successes of mobile payment applications. Banque El Amana has recognized and embraced this transformative trend, strategically positioning itself with the launch of the highly successful Amanty application to meet the growing demand for mobile payment services.
In this dynamic landscape of financial evolution, the shift toward digitalization is a recognized and prioritized agenda for banks. The remarkable success of mobile payment applications has sparked increased interest among banks, prompting a reevaluation of their digital strategies. Banque El Amana’s Amanty application stands out as a testament to successful innovation. Functioning as a comprehensive digital solution, it not only meets the increasing demand for mobile payment services but also extends the bank’s customer reach.
Despite the success of mobile payment applications, challenges persist, including regulatory limits on transaction amounts and extended interbank payment times (currently around 48 hours in Mauritania), impacting overall banking system efficiency. In response to these challenges, the Central Bank of Mauritania has taken a decisive step with the adoption of the ATS project. This strategic initiative aims to enhance the efficiency and security of payment systems, reduce reliance on cash transactions, and improve access to financial services, particularly for marginalized populations.
A pivotal feature of the ATS project is the introduction of instant interbank exchanges. This innovation is poised to strengthen both mobile payments and Digital Banking services, offering increased flexibility compared to traditional wallets. The official launch date for the ATS project is set for November 25, 2023, marking a significant milestone in the ongoing evolution of financial services in Mauritania. Banque El Amana is perfectly positioned to strengthen its market share by offering improved experiences to its customers, both on mobile payments and on Digital Banking, thanks to our Amanty application and our Digital Banking Application as well as our bea net site.
BF: How strong is Mauritania’s fintech sector? What kinds of opportunities does this sector present?
Bouna Moctar: The financial technology (FinTech) sector in Mauritania is experiencing significant growth, propelled by the widespread adoption of smartphones and increased internet access. This expansion presents new opportunities for the development of FinTech, although it is still in its early stages compared to other global regions.
One notable success in the Mauritanian FinTech landscape is the widespread adoption of mobile payment solutions. However, existing solutions face challenges, and operational digital banking applications are anticipated to see improvements with the upcoming launch of the ATS Project, which promises enhanced efficiency and security in payment systems.
A pivotal development reinforcing the FinTech environment is the introduction of the Startup Bill, known as “Startup ACT Mauritania.” Presented to the Council of Ministers in September 2023, this bill signifies a significant stride in supporting innovation, entrepreneurship, and business competitiveness in Mauritania. It reflects the commitment of the president, Mr. Mohamed Ould Cheikh El Ghazouani, to position innovation as the driving force behind the country’s digital development.
The “Startup ACT Mauritania” serves as a legal framework designed to promote the creation and growth of innovative startups and SMEs in Mauritania, drawing inspiration from similar initiatives in other African countries. It encompasses various measures, including the conferment of the “startup” label, provision of tax and customs advantages, and mechanisms to facilitate access to financing, thereby reinforcing the role of FinTech in the country.
Crucially, this initiative is expected to stimulate the development of incubators and investment funds, further supporting the endeavors of banks in fostering Mauritanian FinTech innovation and SMEs. The holistic approach outlined in the “Startup ACT Mauritania” reflects a commitment to nurturing a conducive ecosystem for the growth of FinTech, ultimately contributing to the broader digital advancement of the country.
BF: United States investments in Mauritania have generally been focused on hydrocarbons and mining. However, others sectors such as green energy and telecommunications now seem promising for American investors. At the end of 2022, the American government has committed to investing $55 billion in the African continent, which could have an impact on Mauritania. What is the government and the sector doing banking to make Mauritania more attractive for investments? What more could be done to attract new investors?
Bouna Moctar: Mauritania is committed to attracting both national and international investments to propel its economic growth. Recently, president Mohamed Ould Cheikh El Ghazouani, reiterated this commitment during a meeting at the National Press Club in Washington, DC. The country’s renewed participation in the African Growth and Opportunity Act (AGOA) has strengthened trade ties with the United States, coupled with a notable improvement in its business climate, marking a 20-place ascent in the World Bank’s Doing Business report since 2019.
Several measures and a favorable climate have been established to encourage domestic and foreign investments in Mauritania:
Economic reforms: Significant efforts have been made to simplify administrative procedures, reduce business creation costs, and enhance legal certainty. The establishment of the Investment Promotion Agency stands out as a notable initiative offering remarkable assistance to foreign investors.
Political stability: The country has maintained political stability, a crucial factor for investor confidence, especially in a region facing security challenges.
Counterterrorism measures: Mauritania has effectively managed its borders and national territory to combat terrorism, ensuring a secure environment.
International partnerships: The country actively engages in international partnerships, participating in regional and global initiatives aimed at boosting trade and investment.
Special economic zones (SEZs): Special economic zones provide tax and customs advantages, attracting companies to operate within them.
Infrastructure development: Significant investments are made in infrastructure development, covering transport, energy, and telecommunications, to support overall economic growth.
Attractive investment code: The Investment Code offers incentives, investment security, and availability of foreign currencies. It promotes equality of opportunity, non-discrimination for all investors, and advantageous tax regimes for companies in SEZs or under the Conventional Regime.
To further attract new investors, Mauritania could focus on continuing the simplification of administrative procedures through digitalization, actively promoting investment opportunities internationally, and investing more in the training of human resources. International cooperation and active promotion are identified as key factors in sustaining and enhancing the country’s appeal to new investors.
BEA expresses readiness to support and advise any investor interested in exploring opportunities in Mauritania. The bank is confident that Mauritania will persist in progressing toward becoming an increasingly attractive choice for investments.
BF: Could you give a brief overview of BEA to our readers: how the bank stands out in the market and what its role and contribution in Mauritania is?
Bouna Moctar: BEA stands as a dynamic and secure financial institution that has been operating in Mauritania since its inception in 1996. Distinguishing itself in various sectors such as artisanal fishing, agri-food, trade, energy, telecommunications, and construction, BEA has become a leader in these domains.
With a workforce of 180 employees, BEA has forged strong commercial relationships with a diverse clientele, both local and international. The bank proudly collaborates with renowned partners, including World Food Program (WFP), United Nations High Commissioner for Refugees (UNHCR), OXFAM, Save the Children, Mauricarb (formerly Total Mauritania), Coordinating Working Party on Fishery Statistics (CWP), and others.
Emphasizing compliance, BEA conducts a substantial volume of domestic and international transactions through an extensive network of foreign correspondents and partners. Notable among these are Kreditanstalt für Wiederaufbau (KFW), the European Investment Bank (EIB), Société Générale, Union of Arab and French Banks (UBAF), UBAE, Mitsubishi UFJ Financial Group (MUFG), British Arab COmmercial Bank (BACB), Unicredit Italy, Wells Fargo, Caixa Bank, Bankinter, and BRED Bank.
BEA offers a comprehensive range of services to businesses and institutions, encompassing various means of payment, electronic banking products, and financing solutions for both investments and operational needs. The bank has received recognition for its electronic banking products, honored with the trophy for the best-prepaid card in North Africa, awarded by Cartes Afrique Award.
Positioning itself as a bank attentive to individuals, BEA adopts a Universal Bank model, aiming to meet the diverse needs of its individual customers. Additionally, BEA operates as a solidarity bank, collaborating with renowned institutions and NGOs to distribute payments to vulnerable populations in both urban and remote areas, benefiting over 300,000 individuals.
Committed to environmental and social responsibility, BEA implements an environmental and social management system compliant with ISO 90001. This commitment reflects its dedication to adhering to HSE standards internally and supporting its clients’ investments. BEA’s multifaceted approach underscores its role as a key player in the financial landscape of Mauritania.
BF: As the leader of the organization, what are some of your key priorities at this moment?
Bouna Moctar: As the Managing Director of BEA, my primary focus is on crucial areas that shape the foundation of our operations. Foremost among these is a steadfast commitment to compliance, adhering rigorously to all financial regulations and upholding elevated standards in every facet of our operations. The integration of HSE (hygiene, safety, environment) standards is paramount, reflecting our dedication to minimizing our environmental impact and prioritizing the well-being of both our employees and customers.
Customer satisfaction remains a constant priority for us. We are dedicated to delivering high-quality products and services, ensuring an exceptional customer experience. Recognizing the evolving landscape of the financial industry, we acknowledge the inevitability of digitalization. Consequently, we invest in the continuous development of digital banking and mobile payment solutions to address the dynamic needs of our customers, providing them with greater flexibility and convenience.
Beyond these focal points, there are other critical areas that demand ongoing attention. The enhancement of relationships with our international partners, innovation in financial products, the continuous development of our employee teams, and a commitment to corporate social responsibility are all challenges we willingly embrace. Our goal is to ensure the sustained growth and prosperity of Banque El Amana and, by extension, our stakeholders.
BF: What are your closing remarks and final message to USA TODAY readers?
Bouna Moctar: In my dual role as the president of the Federation of Financial Institutions (FIF) of Mauritanian Employers and the Managing Director of Banque El Amana, I extend my sincere gratitude to USA TODAY for providing this platform to share insights into the Mauritanian financial sector and our esteemed institution, BEA. It is a valuable opportunity to shed light on the investment climate in Mauritania, with the hope that this information enhances visibility, attracting more investments to the region.
BEA, as a dynamic and secure bank, stands as a crucial partner for those considering investment in Mauritania. With almost three decades of experience, robust business relationships, and a steadfast commitment to HSE compliance and standards, we are well-prepared to support and advise investors on their path to success.
Mauritania presents abundant investment opportunities across various sectors, notably energy and more. The country is undergoing rapid transformation, providing a conducive business climate, along with incentives and benefits for investors. Banque El Amana is poised to be your ally at every step of your investment journey in Mauritania.
To prospective investors, we extend a warm invitation to explore Mauritania as a promising investment destination. As the nation evolves into an economic hub in West Africa, BEA is your reliable partner, ready to navigate these prosperous waters with you.
We encourage you to reach out to us for discussions on your investment projects in Mauritania. BEA is committed to supporting and guiding you towards success. Thank you for your attention, and we eagerly anticipate the opportunity to collaborate with you on this exciting investment adventure in Mauritania.