Mauritania has a limited housing finance sector. As the mortgage market does not yet meet the breadth of the population who might afford a mortgage, most households still finance their housing independently, with savings or non-mortgage credit.
The cheapest newly built house by a developer in Mauritania recorded by CAHF is US$ 29 172, which is for a 120 square metre unit. Cement prices are lower than the continental average, at US$ 6.35 for a 50-kilogram bag.
With an urbanisation rate of 3.45 percent, demand for affordable housing will remain strong, both for rental and purchase. Housing microfinance will play an important role in increasing the supply of housing, and efforts to increase access should be undertaken. Despite a growing financial sector and a high credit to GDP ratio, a high non-performing loan (NPL) rate limits the availability of housing finance. Further hampering the market is the transformation of the one specialist housing finance into a universal commercial bank. With a good macroeconomic environment, sound policy, better data and increased access to affordable credit, an enabled housing market can increasingly provide housing that the average household in Mauritania can afford.
Find out more information on the housing finance sector of Mauritania, including key stakeholders, important policies and housing affordability:
- Access to Finance
- Housing Affordability
- Housing Supply
- Property Markets
- Housing Policy and Regulations
- Housing Sector Opportunities
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2016 edition, which has up-to-date profiles for 51 African countries.Download yearbook
Connecting the Maghreb region and sub-Saharan Africa, Mauritania is classified as a lower middle-income country in the Middle East and North African region. Mauritania’s economy is not very diversified and largely dependent on a few natural resources with minerals accounting for over 75 percent of total exports and 30 percent of the central government’s revenues. In recent years, there have been improvements in economic activity; however, they have been gradual and uneven due to slower exports of iron ore and decreasing demand from China. In the short term, economic growth is predicated on the expansion of mining and requires Mauritania to adjust its external position.
Mauritania has a population of approximately 4.01 million people. The urban share of this total population is 48.3 percent. At least 60 percent of the urban population lives in slums. Mauritania’s urban population is growing at a rate of 3.5 percent, which is twice as fast as than the global average, and 14 percent higher than the average in West African countries. The rapid expansion of the cities was largely due to rural-urban migration as a result of drought and food insecurity in the 1970’s. Initially planned and built as an administrative capital in 1958 for fewer than 15 000 people, the capital, Nouakchott, currently has more than one million people. As more people moved to the urban areas, the nomadic lifestyle that was prevalent before this period decreased extensively to approximately seven percent of the population, posing capacity challenges at the local government level in terms of city planning, economic integration, provision of basic services and infrastructure. Approximately a quarter of the urban population is connected to electricity, half to water, and only a small fraction to sanitation networks. While rural areas still do not face similar population pressures, dispersed rural settlement patterns have extremely low standards of rural service delivery, including transport and electricity, leaving the rural poor disconnected from the growing economy.
Poverty and unemployment persist at high levels and progress toward achieving the Millennium Development Goals (MDGs) is uneven. According to the World Food Programme, food insecurity stemming from poverty, environmental degradation and cyclical shocks, is widespread. Progress toward building the foundation for inclusive growth has been mixed. According to the International Monetary Fund (IMF) (2015), the government has recognised the need for increased human capital and better jobs. The National Statistics Office estimated that about 42 percent of the Mauritanian population lives in poverty, of which 26 percent is extreme poverty.Agriculture employs roughly two-thirds of the population. Farming and fishing are the country’s main sources of livelihood, and represent approximately 15 percent of GDP. Yet Mauritania remains highly food insecure and more than 70 percent of grain is imported. The extractive sector, representing about 30 percent of GDP, focuses mainly on mining activities and oil drilling. Mauritania is the second largest exporter of iron ore in Africa. Similar to last year, the 2016 unemployment rate and the informal sector mask significant heterogeneity across age, gender and region (IMF, 2016). Mauritania is currently ranked 156 out of 187 countries in the United Nations Development Programme (UNDP) Human Development Index (HDI) rankings. According to the UNDP website, the 2013 figures indicate that Mauritania has an income Gini coefficient of 40.5, indicating that this relatively poor country does not necessarily have high levels of income inequality.
Mauritania’s economy grew an estimated 3.1 percent in 2015, a downturn from 6.6 percent in 2014, with only a year-on-year marginal increase to 3.5 percent projected for 2016, thereby derailing the economic recovery achieved in 2011 and 2012. Real GDP was expected to stay high by historical standards in 2015 at an estimated annual average of 5.6 percent. However, the absence of economic diversity, the drop in the price of iron ore, as well as a decrease in the agricultural performance, stunted the projected growth. Consumer price inflation was contained to 1.5 percent in 2015 due to a fall in food prices, and is expected to average 6.4 percent in 2016 and 6.1 percent in 2017. However, the country still remains vulnerable to external price shocks, as well as some downturn in domestic agricultural output.
Mauritania is a member of the Arab Maghreb Union (AMU); while the country left the Economic Community of African States (ECOWAS) in 2000, it continues to co-operate with ECOWAS member countries. However, Mauritania’s 2016 share of regional trade has remained very low. It ranked 168 out of 189 countries gaining eight spots up the World Bank’s 2016 Doing Business Report by eliminating the minimum capital requirement for and expanding borrower coverage in the credit registry. With the support of the World Bank and African Development Bank, the country has set a new action plan that will focus on clearer property rights; simpler administrative procedures and taxation; streamlined investor protection; and an updated judicial system.
Access to Finance
The World Bank cites access to finance as the top constraint to the Mauritanian private sector. Mauritania’s credit market is fragmented, shallow and extremely informal. Only 17 percent of Mauritania’s population is formally financially included as of 2015. Additionally, the World Bank notes that distribution of bank branches in Mauritania is very thin with about 5 branches per population of 100 000. It is therefore logical to extrapolate that access to housing finance in Mauritania through the formal banking system is difficult as even general financial services are out of the reach of the majority. Cash is the most common means of payment in the domestic economy. Lending to the private sector and households continue to be low while limited access to credit and high costs of financing constrain entrepreneurial activity. Owing to business reforms making it easier to do business, Mauritania made exceptional gains by moving up nine places in The World Bank’s 2016 Doing Business Report’s with the ‘ease of getting credit’ category ranking 162 out of 189 countries.
Having increased significantly with nine new licences granted since 2007, banks dominate the financial sector. The number of foreign banks has risen to six from one in 2005. Mauritania does not have a stock market. In 2015, banking sector assets represented 43.5 percent of GDP. Access to financial services in Mauritania is below average, compared to the rest of Sub-Saharan African. In 2015 there were 20 licensed commercial banks which provide mortgages; 21 registered microfinance institutions (MFIs); two specialised financial institutions: Caisse de Dépôts et de Développement (CDD), a public development bank created in 2011 with special legal status, and Finance, Conseils, et Investissement; two pension funds; 12 insurance companies; two active microfinance networks, the largest Agence de Promotion des Caisses Populaires d’Epargne et de Crédit (PROCAPEC) with 51 offices, and Oasis Mutual investment Credit (MICO (FCI); and 32 exchange bureaus These institutions operate under the purview of the Central bank of Mauritania.
According to the IMF (2016), the banking sector remains well capitalised and broadly liquid. However, liquidity is declining and the sector remains vulnerable to shocks. Due to fiscal and external trends at the end of 2015, public and publicly guaranteed debt reached 93 percent of GDP. The debt service-to-revenue ratio remained at 10.3 percent as public debt is mostly concentrated in concession terms. Although the banking system seems well-capitalised overall, some banks are still not meeting the minimum capital requirement and are under-provisioned. Asset quality remains weak: non-performing loan (NPL) ratios increased to 27.6 percent in 2015 from 20 percent in 2013 due to stricter risk classification. Increased NPLs naturally lead banks to lend less credit. With Mauritania’s pre-existing very low mortgage lending, increased NPLs further prohibit credit to housing finance. The 2014 Global Findex data indicates that in Mauritania, 20.4 percent of all adults aged 15 and older have an account at a financial institution. The data also indicated that 10.6 percent saved, 7.7 percent borrowed and 8.3 percent had an outstanding mortgage from a financial institution.
Mauritania has an extremely small mortgage market. Since the former Banque El Ammane pour le Développement de l’Habitat (now BEA) was transformed into a universal commercial bank, there are no specialist housing lending banks, essentially limiting instruments to facilitate the financing of housing. The World Bank’s 2014 Financial Sector Assessment Program has suggested that Mauritania lacks vital instruments such as a housing loans fund; a housing loans refinancing fund; long-term housing loans with periodically re-negotiable rates that minimise interest rate risks due to a mismatch between assets and liabilities; housing savings plans that provide stable resources; and microcredit for housing. CAPECs have undertaken limited operations in financing housing.
According to the World Bank’s 2014 Financial Sector Assessment Program, credit quality is the most critical issue in the Mauritanian banking system. This is exacerbated by Mauritania’s worsened risk assessment by the World Bank and IMF debt sustainability analysis, which has gone from moderate to high risk classification for debt distress.
The Central Bank of Mauritania continues to strengthen its regulatory framework and supervision capacity to support the continued development and stability of the financial system. However, opening branches outside the main urban centres of Nouakchott and Nouadhibou has not encouraged an increase in the use of banking services.
The World Bank’s 2016 Ease of Doing Business Report indicates that there are no private bureaus and only 6.1 percent of adults are registered on a public credit registry. Household credit was at 37 percent in June 2015 and dominated credit to the private sector. The effectiveness of mortgages has been hampered by banks’ lack of diligence in registering mortgages, given high registration fees. In response, the authorities reduced the registration fees in 2006.
Government has placed enormous emphasis on housing development and the eradication of slums, which partly explains why home ownership is relatively high notwithstanding the high incidence of poverty (CIA World Factbook estimated in 2014 that about 40 percent of the population live below the poverty line) and the small mortgage market in the country. From an average salary of around MRO120 000 approximately MRO80 000 is spent on rent in for a 0ne-bedroom flat in the city centre and around MRO65 000 outside the city, making accommodation the single most expensive item of expenditure. According to the latest available information (2008), it has been observed that the vast majority of households owned their homes (74 percent); tenants are in second place (almost 12 percent); and households in the process of becoming homeowners (known as gazra), constitute the remaining 7.5 percent. The main types of housing occupied by households can be classified into two groups: substandard dwellings (tents, shacks/huts, baraques and m’bar) representing 32.5 percent of all housing types; and dwellings that could be called ‘houses’ comprising the remaining 67.5 percent.
Although Mauritania’s gross national income (GNI) is very low at US$1,270, it is higher than its GDP, suggesting more foreign investments within the country than external investments, making it unlikely that most Mauritanians would be able to afford these properties. Poverty continues to increase and Mauritania failed to meet its MDG goal of reducing poverty to 28 percent by the end of 2015. However, household living conditions show significant progress in poverty reduction, which fell from 42 percent in 2008 to 31 percent in 2014. Although still characterised as a low human development index (HDI) country, Mauritania moved up five places higher in 2015 on the UNDP HDI rankings.
The World Bank/IMF’s Poverty Reduction Strategy Paper III (2011-2015) action plans include goals to improve living conditions by making decent low-cost housing available and providing proper amenities and infrastructure.
Construction is a relatively small portion of GDP, estimated to be around six to seven percent, based on extrapolations from the latest available figures of 5.5 percent in 2011, down from six percent five years earlier. Housing resources are strained and a large percentage of the urban population lives in substandard housing, such as tents, huts, or shacks. This has been an ongoing situation, despite the government introducing regulations in 1975 to urge builders to enter the market as well as persuade government employees to purchase their own property and thus relieve the demand for public housing. Self-construction has therefore continued to be the main method of building houses in Mauritania. According to the IMF’s 2016 Article IV Consultation, construction was 14 percent of the private sector credit as of June 2015.
The kebbe and the gazra, the two types of informal housing still prevalent in the urban areas, were initially the result of spontaneous settlements; yet they are still standing and similar construction continues. Government efforts to eliminate the problem of informal settlements have not yielded the desired results. The provisions to relocate and replace the informal housing require more funds than the previously disbursed amounts by the World Bank through the Urban Development Programme (PDU) in 2002. A low-cost housing micro-credit system was instituted under PDU, which helped to produce 5 000 housing units in Nouakchott and Nouadhibou. The determination of the government authorities to clear squatter settlements and offer people more decent housing led to the development and implementation of neighbourhood-based integrated restructuring programmes. The first of these between 2003 and 2007 was a pilot in El Mina. The pilot guaranteed land tenure to over 16 000 households and implemented a major construction programme costing almost MRO 4 billion (US$11.1 million). Subsequently, government opted for a more affordable, participatory approach to rehabilitate the other squatter settlements of Nouakchott and Nouadhibou. This entailed engaging with representatives in awareness raising, information sharing, and a broad enumeration of households; it has been successful in both the Arafat and Hay Saken squatter settlements.
In much the same way as the PDU programme, the Twizé programme, has not received further funding to continue changing the housing landscape of the cities. In 2008 when the program concluded, 6 000 houses had been completed and titles were issued to homeowners, thereby providing a more permanent location for previously displaced residents.
The Real Estate Construction and Management Company (SOCOGIM) that was established in 1974 to promote affordable housing delivery, was absorbed in 2013 by The Real Estate Promotion and Management Corporation (ISKAN). ISKAN was established in 2010 to help develop land, improve and develop housing, and promote and manage real estate development. The creation of ISKAN led to the approval of a strategic development plan for administrative buildings and a housing strategy; and the adoption of measures to remove bottlenecks in the construction and public works sector, and promote the use of local materials. There appears to be no information available to measure progress of this strategy thus far.
Presently, the top end of the residential development market is wholly local and is still dominated by the ad hoc construction of buildings for owner-occupation or leasing mainly to the expat market in Tevragh Zeina. Many diplomatic staff are housed in accommodation that has been built within embassy compounds.
According to the World Bank’s Ease of Doing Business 2016 data, Mauritania is ranked 100th of 189 countries for registering a property. The process requires four procedures, takes 49 days of which 45 days are for the effective transfer of property, and costs 4.6 percent of the property value. Previously, lack of cadastral information and cumbersome legal procedures hampered the transfer of property titles to occupants. However, in 2015, a computerised system was established by the Ministry of Economy to provide more transparent land allocation. The Land Registry Agency within the Ministry of Habitat maintains all information regarding property titles, mortgages and other tax related matters. Due diligence is performed prior to the final title transfer to register a property. Owners need a notarised sale agreement and a title certificate.
According to the Directorate of Land and State Assets, there is a total of 27 075 official deeds in Mauritania of which 27 003 are in urban areas and 72 are in rural areas. Of the 27 075 deeds, 92 percent are titled to men and 8 percent to women. It is estimated that the city of Nouakchott has more than 500 000 provisional property deeds which are delayed in titling due to previous institutional overlap of jurisdictions.
Article 15 of Maurtania’s 1991 constitution guarantees private property and the 2012 Investments Code further outlines property rights. The Mauritanian Civil Code which is modelled after the French Civil Code, further protects private property rights; technically, anyone is allowed to purchase land. However, it has to be underscored that it is notably difficult to gain redress for grievances arising from property disputes through the courts. This makes purchase or leasing of lend increasingly precarious as there are some well-documented problems arising from the ambiguity of land laws between the state and customary land laws. According to the US State Department, in 2014 rural Communities around Boghé claimed a lease agreement between the state and a Saudi Arabian bank for cultivation, was in fact expropriation. Further to that, the 1983 Law on Land Tenure allows the state to seize any land that remains unused and sell it to private individuals. So there is land law ambiguity which is compounded by yet a third set of legislation; customary regulations conflict with the notion of the state taking land from anyone. Information regarding property rights appears to be mixed, owing to the fact that three agencies are in charge of land designation with overlapping responsibilities: the Ministry of Housing, Urbanisation and Planning is responsible for land management, the Ministry of Finance is responsible for land allocation, and the Agency for Urban Development. 
Housing Policy and Regulations
The policy and regulation framework in Mauritania remains an impediment in the housing finance sector as risk associated with the lack of solid and unequivocal laws remains high. Changes are, however, being made to improve this but the pace is not sufficiently swift to address the policy dichotomies. The rapid urbanisation that followed the droughts of the 1970’s outstripped the ability of government to manage urban growth and the provision of housing. Some institutional mechanisms aimed at liberalising and promoting the sector, together create loose policy framework. Property-based local revenues are minimal and further hamper the ability of local governments to provide basic infrastructure, particularly to the informal settlements on the urban fringe where most of the urban growth is concentrated. The main policy and regulation frameworks governing the housing sector include:
- Mauritania Constitution of 1991 Article 15- provides that the right to property is guaranteed; however the law may limit the scope of the exercise of private property if the requirements of economic and social development require this;
- Land Code, ordinance 83-127 of 5 June 1983 – Article 2 “The State recognizes and guarantees private ownership of land which is in accordance with Sharia, contribute to economic and social development of the country”;
- Law No. 99-031 of 20 July 1990, as amended by Law No 2005-08 of 30 January 2005, and its implementing texts: Established real estate development in the country; and
- World Bank/IMF’s Poverty Reduction Strategy Paper III (2011-2015) action plan: Part of this programme aims to improve living conditions by making decent low-cost housing available and providing proper amenities and infrastructure. The approach has focused mainly on: 1) adopting and implementing a national housing strategy; 2) significantly increasing the supply of housing; 3) encouraging real estate development, with a view to quickly providing a diverse supply of dwellings at a cost that is accessible to households; 4) continuing and expanding the “Twizé” low-cost housing programme to the major urban areas; and 5) implementing a system for financing housing taking into account the needs of households, as well as those of real estate developers.
Housing Sector Opportunities
Mauritania was one of the top 10 reformers worldwide in the World Bank’s Doing Business ranking. There is opportunity to continue strengthening structural reforms to promote clarified property rights, and streamline investor protection with support of the World Bank and the African Development Bank. Recently Mauritania has had a significant increase in the number of new registered banks which should have a positive impact on the availability of credit to households, and promote investment opportunities in the financing of housing.
Furthermore, there appears to be some opportunities for both the public and private sectors to strengthen the development of housing finance, and increase its supply. Efforts could be targeted toward establishing refinancing and guarantee mechanisms, and creating new products, such as housing savings plans, long-term mortgages and renegotiable mortgage products. These would complement those recommended by the World Bank’s Country Partnership Strategy for the government to explore the feasibility of establishing: 1) a loans recovery company and/or a mortgaged real property management company; 2) a mortgage refinancing fund; and 3) a mortgage guarantee fund.