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
Mauritania is classified as a lower middle-income country. The country connects the Maghreb region and sub-Sahara Africa. Despite its relatively low GDP, the country is rich in natural resources. The Real GDP growth increased by an estimated 3.1 percent in 2016 from 2.o percent in the previous year. This growth was mainly driven by the primary sector and recovering mining exports. However, the absence of economic diversity, the drop in the price of iron ore, as well as a decrease in agricultural performance, stunted the projected growth of 5.6 percent. As part of the expanding tertiary sector, – the banking, insurance and real estate subsector contributed to 20.4 per cent of GDP in 2015. In 2016, the Mauritanian economic situation remained weak as the iron-ore price stayed low and foreign demand continued to be low. With mining accounting for a large proportion of Mauritania’s economy as mining accounted for 70 percent of the country’s exports and 30 percent of its national budget. The rate of change in their country’s economic activities however remained closely tied to the global economic situation which is also known as the world economic situation which is a study that portrays the world’s economy in the near and medium context. The slowdown in China’s economy in 2014 had a major impact on the Mauritanian economy as 50% of the country’s iron ore is procured by China.
Since the 1960s, Mauritania has rapidly urbanized with 49 percent of its population concentrated in urban areas. Of that 49 percent, 28 percent live Nouakchott, the capital city. The rate of urbanisation was at 3.452% in 2016 according to a study conducted by ”Trading Economies” The first phase of extreme 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, now has a population of over one million. 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 only 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 any growth the economy may enjoy.
The UNDP Human Development Index ranking as of June 2017 was 0.513. The Gini coefficient according to the UNDP remains at 40.5 indicating that this relatively poor country still has high levels of income inequality. Unemployment rates in Mauritania are estimated at 12.8 percent, and this rate rises to almost 17 percent in urban areas. 86 percent of workers are in the informal sector. In Mauritania, poverty is most prevalent in rural areas (44.4 percent). Although, overall, poverty is decreasing, a mixture of continued rural-urban migration and the instability of the resource-based economy might be triggering a steady rise in urban poverty. Where, according to the United Nations Economic Commissions for Africa Country Profile, 31 % of the population live in relative poverty and 16.6% of the population is living in extreme poverty conditions with prevalence in rural areas.
Mauritania is ranked 160 out of 190 countries in the World Bank’s 2017 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 continues to use the that focuses on clearer property rights; simpler administrative procedures and taxation; streamlined investor protection; and an updated judicial system.
Access to Finance
There is no stock market in Mauritania. Despite an announcement in 2014, the Mauritanian Central Bank’s intention to launch a stock market in two to three years has not materialised. Currently, commercial bank loans are the only type of credit instrument, making access to housing finance in Mauritania through the formal banking system very difficult as even general financial services are out of the reach of the majority[i]. The World Bank cites access to finance as the top constraint to the Mauritanian private sector. Only 17 percent of the population is included in the formal economy. Cash is the most common means of payment in the domestic economy. Lending to both the private sector and individual households continues to be low while limited access to credit and high costs of financing constrain entrepreneurial activity. Business regulatory reforms have made it considerably easier to do business in the country The credit registry coverage for Mauritania’s adult population has increased from 6.1 in 2016 to 6.6 in 2017. Mauritania’s credit market remains fragmented, shallow and extremely informal because “Few of the positive effects ordinarily associated with agglomeration have emerged. Urban centres are characterized by informality, poor infrastructure, and poor service coverage, self-employment and weak human capital—characteristics which are neither favourable to attracting the private sector to invest nor to creating an enabling environment for the development of higher-productivity services and tertiary sectors.”
“As of April 2017, there were 25 banks, national and foreign; operating in Mauritania, despite the fact that only some 15 percent of the population holds bank accounts.”[ii] In 2015, there were 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.
The sector remains vulnerable to shocks as liquidity continues to decline. Due to fiscal and external trends at the end of 2015, the IMF estimated the debt-to-service ratio to be at 14.7 percent. 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 that increased to 27.6 percent in 2015 from 20 percent in 2013 due to stricter risk classification remain unchanged[iii]. Increased NPLs naturally lead banks to lend less credit. With Mauritania’s already chronically low mortgage lending rates, an increase in NPLs further prohibit credit to housing finance.
Mauritania still has an extremely small According to the World Bank’s 2014 Financial Sector Assessment Program , 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.
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 2017 Ease of Doing Business Report indicates that there are no private bureaus and only 6.6 percent of adults are registered on a public credit registry. Household credit was at 38 per cent in June 2016 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.
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. There are two main types of housing. Firstly, substandard dwellings (tents, shacks/huts, baraques and m’bar) representing 32.5 percent of all housing and secondly, formal dwellings comprising the remaining 67.5 percent. Since independence, the government has placed enormous emphasis on housing development and the eradication of slums, making home ownership relatively high despite the high incidence of poverty.
The Urban Development Project (UDP) is a programme that aims to combat poverty in precarious settlements in Nouakchott and Nouadhibou, combining access to housing, access to credit, vocational training, and local development. It was launched in outlying settlements and land parcels around Nouakchott and enabled long-term residents of city slums to move to an improved urban environment on rationalized plot patterns with registered land titles in a test environment where the results of this project were as follows: outcomes were satisfactory, risk to development outcome was moderate, Bank performance was satisfactory, and Borrower performance was satisfactory.
Certain lessons learned include that the project method is not the most efficient way for workable capacity building. So, developing local governmental capacities needs a national program, based on sustainable resources and strong political commitment that ultimately will be reinforced by donors. The project revealed the viability and sustainability of microcredit operations for creating income activities in Mauritania. Slum upgrading has limitations when there is a lack of established appropriate regulatory frameworks for land development in an urban environment.
Accommodation is the single most expensive item of expenditure. The average salary is about MRO120 000 of which MRO80 000 is spent on rent for a 0ne-bedroom flat in the city centre and around MRO65 000 outside the city.
Although Mauritania’s gross national income (GNI) is very low at US$1,200, 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 is decreasing in Mauritania however at very slow rates with 2014 standing at 33% and 2016 at 31%. The World Bank/IMF’s Poverty Reduction Strategy Paper III (2011-2015) action plans included goals to improve living conditions by making decent low-cost housing available and providing proper amenities and infrastructure.
The Mauritanian housing sector remains largely unchanged since 1975 when the government introduced regulations , which include persuading government employees to purchase their own property to reduce the demand for public housing that will in turn attract developers to start work on private development . Construction remains a relatively small portion of GDP, with a negligible increase from last year’s estimated six to seven percent[i], 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. Self-construction has therefore continues to be the main method of building houses in Mauritania.
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.
A low-cost housing micro-credit system was instituted under PDU, which is also referred to as the Urban Development Project 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. Subsequently, government opted for a more affordable, participatory approach to rehabilitate the other informal settlements of Nouakchott and Nouadhibou. This entailed engaging with representatives in awareness raising and information sharing as well as a broad enumeration of households. The programme has been successful in both the Arafat and Hay Saken informal settlements.
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 . To fight against the proliferation of slums, the Mauritanian government implemented policy evictions, which were a scheme or plan to evict squatters in the early 80’s. However, with the spread of kébbés, politicians still prefer to preserve social peace and consider more consensual solutions. Despite these efforts, there remains high levels of mistrust between government officials and informal sector dwellers.
External investment into the property market appears to be materializing according to the Middle East Monitor, Qatari funded housing projects in were being developed in the municipality of Jadir Al-Mahkan in the southern state of Tarrza consisting of 100 housing units. However, given Qatar’s most recent international issues, there appears to be no information available to measure progress of this development thus far as Mauritania has sided with the other Arab countries where they have cut off all dealings with Qatar including funding for various projects.
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. However, it is important to note that the lack of judicial capacity to settle land disputes remains a major challenge in accessing and registering land. This makes purchase or leasing of lend increasingly precarious as the ambiguity between state and customary land laws remain. According to the US State Department, in 2014 rural communities around Boghé claimed that a lease agreement between the state and a Saudi Arabian bank for cultivation, was in fact expropriation[i]. The 1983 Law on Land Tenure allows the state to seize any land that remains unused and sell it to private individuals. The ambiguity of land law is further compounded by customary regulations [ii] .
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[iii].
Previously, the lack of cadastral information and cumbersome legal procedures hampered the transfer of property titles to Mauritanians. 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[iv]. According to the World Bank’s Ease of Doing Business 2017 data, Mauritania is ranked 102 of 190countries for registering a property. The process requires four procedures, takes 45 days to complete the transfer of property, and costs 1.2 percent fees for the registry’s functions.
There appears to be no updated data regarding the deeds registry for 2017. However, in 2016, the latest available data from the Directorate of Land and State Assets, indicated that there was a total of 27 075 official deeds registered of which 27 003 were in urban areas and 72 in rural areas. Of the 27 075 deeds, 92 percent were titled to men and 8 percent to women. In terms of overall housing, there were 38 574 occupancy permits listed implying that the rental market has about 11,499 units making it 29 % of market. It was previously estimated that the city of Nouakchott had more than 500 000 provisional property deeds which were delayed in titling due to previous institutional overlap of jurisdictions[v] , this information remains unchanged with no new information available.
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. To become an owner in Mauritania one must obtain permission to occupy the land by hakem (official), the public often regards this license as a property right in itself, however it has no final legal value. It is issued against the price of land and the cost of demarcation. From this point, the beneficiary has two years to build (according to planning regulations) before claiming the outright ownership. This process is very complex and slow. There have been many reported incidents of abuses, illegal occupation, land speculation and issuing of fraudulent title by hakems.
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 improved property rights, and streamline investor protection with support from the World Bank and the African Development Bank. Mauritania has recently experienced significant increases 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.
Historically, Mauritania has been relatively open to foreign direct investment (FDI). High level government officials in Mauritania have expressed their objective to improve the business climate in order to attract more FDI, particularly from the United States. There is no law prohibiting or limiting foreign investment, which can target any sector of the economy. There are no laws or regulations specifically authorizing private firms to adopt articles of incorporation or association, which limit or prohibit foreign investment, participation, or control. There are no other practices by private firms to restrict foreign investment.
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. The major players in this case would be commercials banks venturing into developing Building Society Arms that will support individual housing loans as well as favourable loan terms to construction companies. 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.