The availability of financial resources represents, in fact, a main foundation for the creation and development of a diversified private sector in which many opportunities for the creation of new investment projects could, profitably, be found.
These resources will allow entrepreneurs to have the necessary financing to start up and operate businesses and, above all, to set up an efficient and sustainable management system.
To be sure, a dynamic financial system allows large companies to expand their activities by guaranteeing the settlement of their insolvency and ensuring their reliability with their various partners and especially with creditors.
Access to these resources must be guaranteed by institutions and financial markets such as banks, leasing companies, financial investment organizations, stock exchanges ...
The financial market in Mauritania
The financial sector in Mauritania is made up of several financial institutions, including more than 15 commercial banks and several leasing companies and microfinance institutions.
But “this sector is characterized by a low rate of banking of 20.4%, well below the average for sub-Saharan Africa [28.9%], and a small base of depositors not exceeding 320,000 accounts, 70% of which belong to individuals”.
These figures published by the World Bank show that the private sector in Mauritania is essentially based on the financial cash system, which is limited and dominated by illegal procedures.
Therefore, the Doing Business ranking placed Mauritania with 17 other economies in 168th place, with zero points obtained in this area.
Access to funding
Access to finance is identified by Mauritanian companies as the first obstacle to the development of the private sector, especially in the industrial field.
In 2018, the total credit provided to the industrial sector does not exceed 2% of global financial resources exploited in the private sector, in general.
This marks a serious lack of financing in the industrial field, which is the field of the valuation and promotion of natural resources. This serious lack harms, particularly, the extractive industries which represent a main sector in the national economy.
Challenge to overcome
All the improvements made recently in Mauritania for the development of the business climate, have not yet succeeded in putting in place a financial strategy to overcome this major challenge.
This requires the development of a reliable financial system and the establishment of insolvency procedures to improve access to finance by companies, especially in industrial fields.
These measures could help entrepreneurs to overcome the challenges in the areas of obtaining loans and resolving insolvency, in order to promote industrial activities and accelerate economic growth, through a strong private sector capable of standing up in face of crises and international market changes.
In the following years, the issue of access to business financing should be one of the priorities of the reform program initiated by the Government. The recent initiative of the Central Bank to set up a Credit Information Bureau is to be welcomed.
Law reform and practice development
To definitively overcome these obstacles, it is urgent to amend certain juridical dispositions and to encourage the implementation, in the everyday life, of the practical attitudes.
In that sense, the insolvency law should be revised to encourage debtors and creditors to resort to it. In addition, a major awareness-raising and training program should be implemented to develop the practice of collective debt clearance procedures. Moreover, the security law should also be reviewed.