Mauritania’s economic strategy: balancing growth, gas revenues, and social welfare

The recent public debate surrounding fuel prices has served a crucial purpose: it brought Mauritania’s economic policy out of the shadows. This controversy compelled a clear articulation of choices, the circulation of vital statistics, and a direct confrontation of differing viewpoints.

My previous analysis contributed to this discussion, and I return today not to rehash the same issues, but to delve deeper into fundamental economic principles. We will examine the promising potential of natural gas, and scrutinize the social safety net, whose latest figures reveal a broader reach than widely understood.

My observations are those of an engaged citizen, grounded solely in verified facts.

Policy alignment: re-evaluating the sequence of decisions

My initial assessment acknowledged the validity of the chosen policy instruments: price adjustments coupled with targeted transfers. However, I also highlighted the Central Bank’s indication that excess banking liquidity contributed to inflation, a point that warrants further exploration.

Distinguished economist Sidi Mohamed Biya offered a pertinent clarification. In response to an energy shock, a consistent approach involves a clear division of roles: monetary policy targets demand and inflation expectations, while targeted transfers safeguard real incomes without fueling aggregate demand. Aid directed towards vulnerable households does not generate inflationary pressure in the same way a general fiscal expansion would. This is precisely its intended function.

The sequencing of these decisions, often overlooked in the discourse, corroborates this. The government’s social measures were implemented on March 31, 2026. The Central Bank subsequently raised its key policy rate on May 18, 2026. This demonstrates that the Central Bank acted *after* the government’s arbitration, not before. It was not a case of ‘loosening then tightening,’ but rather the reverse. Consequently, the argument of sequential inconsistency loses much of its foundation.

Nevertheless, a genuine blind spot persists. Mauritanian inflation is not solely an imported phenomenon driven by fuel costs. The Central Bank itself acknowledges that it is also exacerbated by an abundance of liquidity within the banking system. This domestic driver is distinct from the fuel price debate. It is concerning banking liquidity and the composition of public spending that critiques of the economic policy find their most robust footing.

The macroeconomic bedrock: figures challenging the narrative of fragility

Before drawing any conclusions about the fragility of the Mauritanian economy, it is essential to consider several objective indicators.

Public debt stands at approximately 42% of GDP, deemed sustainable by the IMF with a moderate risk of debt distress. Public revenues are around 22.5% of GDP, showing an increase due to recent fiscal measures. Foreign exchange reserves cover roughly 6.4 months of imports, a comfortable level. Economic growth reached 4.0% in 2025, with a projected rebound in 2026, spurred by the commencement of gas production. The IMF has commended Mauritania’s prudent budgetary management, underpinned by a fiscal rule that shields spending from commodity price volatility.

This overall picture does not depict an economy in crisis. Instead, it illustrates an economy under pressure, with ongoing structural reforms still required.

Natural gas: a promise requiring deliberate action

By the end of 2024, the Greater Tortue Ahmeyim project delivered its first gas. Initial LNG shipments followed in 2025, with production steadily increasing towards its full capacity. Mauritania has officially become a gas producer, a significant milestone.

However, resource wealth alone does not guarantee economic transformation. It can, however, finance such a transformation, provided institutions are seriously committed. Accessible roads, reliable energy, quality education, a fair justice system, and a productive private sector are what gas revenues can achieve if strategically directed. A recent development signals progress: in March 2026, the Central Bank announced a partnership with the Islamic Corporation for the Development of the Private Sector (ICD), mobilizing approximately $900 million in Islamic financing for Mauritanian enterprises. This is a valuable step. Yet, local content development cannot be mandated; it must be built through training, structured sub-contracting, and sustained effort over time.

Genuine sovereignty: stocks, regulations, competition

Mauritania imports nearly all its refined fuels: approximately 800,000 tonnes of diesel and 125,000 tonnes of gasoline annually. Its storage capacities remain limited, and its distribution logistics are concentrated among a few operators. This dependency incurs foreign exchange costs and presents a genuine vulnerability to global shocks.

The notion of sovereignty truly worth discussing is not abstract. It manifests as concrete resilience: sufficient strategic reserves, transparent competition regulations, the capacity to monitor profit margins, and the ability to arbitrate disputes among operators. Over time, gas production, by progressively reducing the energy bill for electricity, will alleviate pressure on foreign exchange reserves. However, its impact on transport fuels will be neither immediate nor direct.

Social initiatives: figures that reshape perceptions

It is here that the most recent data compels a re-evaluation of the initial framework of this debate.

During a meeting with representatives of the most influential trade unions on June 11, 2026, the President of the Republic publicly disclosed the extent of ongoing social support efforts. For energy price support alone, the state had already allocated the equivalent of 4.06 billion MRU. This figure is projected to reach 13 billion MRU by year-end. Concurrently, food assistance is being provided to an additional 155,000 families, and monetary transfers are reaching 352,000 households nationwide — nearly three times the initially announced 124,000. Over 42,500 civilian and military personnel, along with 27,600 retirees, are receiving exceptional aid. The total package for social interventions is expected to exceed 14.8 billion MRU for the current year.

These statistics illuminate three key aspects of the discussion.

Firstly, the true scope of the program. Criticism regarding the limited number of beneficiaries needs to be revised: 352,000 households represent a significant effort, comparable to the Tekavoul program at full capacity. The national social registry has proven its efficacy here.

Secondly, the question of cost. The projected 13 billion MRU for energy price support in 2026 significantly surpasses the initial estimate for pure capping presented in the first contribution (approximately 5 billion MRU for diesel alone). However, these two figures are not directly comparable: ‘energy price support’ encompasses a broader scope than just the petroleum tax on transport fuels, likely including electricity and other energy forms. A more detailed breakdown of this allocation is necessary for a definitive assessment.

Finally, the nature of the chosen approach. The state has opted for a hybrid strategy: partial price adjustment, sectoral energy support, and multiple targeted transfers. This blended approach incurs a total cost that likely exceeds that of a rigorously applied, singular option. This is the price paid for a choice that, even imperfectly, offers protection without abruptly exposing households to the full impact of economic shocks.

Nonetheless, the benefits disbursed via Tekavoul and the national social registry remain modest relative to actual needs. The true challenge, made evident by these figures, is to transform these transfers from sporadic to regular and to progressively increase their amounts.

Economist and banker Yahya Ould Amar recently emphasized that the poor must never be the adjustment variable in economic decisions. This imperative does not oppose targeted transfers; it mandates them. Universal subsidies, while seemingly social, disadvantage the poorest twice over: they first allocate funds to the more affluent (those who consume the most fuel), then create a deficit that these same vulnerable households will absorb during the next economic tightening.

The key initiatives shaping future progress

Mauritania’s macroeconomic foundations are robust. Gas revenues are beginning to flow. The social safety net is substantial and more extensive than previously thought. What remains to be achieved is true economic transformation: building an economy capable of generating value beyond resource rents and public expenditure.

This requires investing in human capital, as no natural wealth can replace effective education. It demands correcting regional imbalances, ensuring that growth benefits the entire nation, not just Nouakchott. And it necessitates consistently functioning institutions, resilient beyond political and economic cycles.

Conclusion

The primary objective of any economy is to manage its balances. The second, more challenging mission, is to ensure prosperity is sustainable and broadly shared. These two objectives are not mutually exclusive, but they often progress at different rates.

The fuel price debate offered a valuable lesson. It underscored that protecting the most vulnerable and maintaining sound public finances are not contradictory goals. Both require the same instruments: rigorous targeting, consistent disbursement, and transparent spending. This is not a matter of generosity; it is a question of methodology.

An economy that understands its accounts must also understand how to build for the future and how to effectively protect its citizens.

About Issa Cheiguer

Issa Cheiguer is a Mauritanian expert in finance, investment, and strategic consulting. As Chairman and CEO of Finance Conseil Investissement (FCI), he guides businesses and investors in structuring their projects and securing financing. His work focuses on private sector development and enhancing Mauritania’s economic attractiveness. His expertise spans financial advisory, investment, and supporting high-impact projects.