Mauritania Corruption Report

Businesses face high corruption risks when dealing with the police. Bribery demands are frequent, particularly at night-time roadblocks in the capital or at checkpoints between cities (HRR 2014). The Mauritania police is not very reliable in protecting companies from crime or in enforcing law and order (GCR 2015-2016). The vast majority of companies in Mauritania pay for private security services (ES 2014). Impunity among police officers is a serious problem, and authorities rarely investigate or prosecute reports of police corruption (HRR 2014).

Mauritania’s public services sector is a high-risk sector. Bribes are frequently demanded when obtaining permits and licenses (GCR 2015-2016); almost a third businesses expect to give gifts to “get things done” (ES 2014). Current licensing regulations force licenses to be bought or acquired through patronage networks, so companies tend to operate informally (BTI 2016). The informal sector dominates the Mauritanian economy, hampering competition (BTI 2016). Incidentally, another factor that limits competition is the large number of monopolies and cartels controlled by a small number of businessmen and their families (who usually also enjoy close relationships with the President) (BTI 2016).

Inefficient government bureaucracy is also an obstacle for companies; regulations governing permits and licenses are complex and overlap (GCR 2015-2016, ICS 2015). Access to basic administrative services varies from one region to another; it is most present in Nouakchott (the capital) but less so in peripheral regions (BTI 2016). Where administrative services are available, employees’ lack of training is apparent (BTI 2016)

On a more positive note, starting a business has been eased in recent years, and the cost and time required to start a business are much lower than regional averages (DB 2016).

The tax administration carries a high risk of corruption. Irregular payments (e.g., facilitation payments) are frequently demanded in relation to tax payments (GCR 2015-2016). Businesses complain that paying taxes is time-consuming and lacks transparency; paying taxes is more than twice as time-consuming than the regional average, taking 734 hours per year (ICS 2015; DB 2016).

Evidence suggests that government officials abuse their power to obtain unauthorized exemptions from taxes, and audits are sometimes used as political tools to crack down on rivals (HRR 2014; BTI 2016). In one instance, audits were launched against three of the country’s largest companies owned by Ould Bouamatou; the tax agency claimed he owed EUR 10 million in unpaid taxes (BTI 2016).

The border administration lacks transparency and presents businesses with significant corruption risks. Bribes and irregular payments are frequently exchanged when trading across borders, especially when importing (GETR 2014). Patronage and favoritism are also problems in the import and export business in Mauritania: Companies with close ties to the ruling elite dominate import markets (BTI 2016). Furthermore, the smuggling of counterfeit goods often involves complex networks that include public officials (BTI 2016).

Companies perceive customs procedures to be burdensome (GCR 2015-2016), and over one-third identify trade regulations as a major constraint to business (ES 2014). Trading across Mauritania’s borders is generally less time-consuming but more costly than elsewhere in the region (DB 2016).

Public procurement is a high-risk sector. Almost 40% of surveyed companies expect to give officials gifts to secure a government contract (ES 2014). Firms believe that funds are often diverted to companies or individuals due to corruption and that favoritism often taints the decisions of procurement officials (GCR 2015-2016). Large firms with political connections dominate public procurement contracts (BTI 2016). When offers made by national and foreign companies are equal, Mauritanian companies are usually favored. However, this practice has heightened the levels of favoritism as tenders are awarded to companies with strong ties to government officials and tribal leaders (ICS 2015).

In one case, the secretary general of the Interior Ministry, Mohamed El Hadi Macina, has been arrested for alleged corruption between 2006 and 2014. The secretary general was allegedly involved with the British company Smith and Ouzman while working on election ballots. The UK Serious Fraud Office confirmed that two employees and the company have been convicted of bribing public officials for business contracts in Kenya and Mauritania USD 543,000 (The New Herald, Feb. 2016). El Hadi Macina is awaiting trial.

The diversion of public funds due to official impunity is widespread (HRR 2014). Embezzlement is particularly common in connection with public infrastructure projects and state-owned enterprises (BTI 2016). In mid-2014, two senior officials within the state Food Security Commission were ordered to repay USD 52,460 after being found guilty of embezzling funds provided by the World Bank (HRR 2014).

Mauritania’s natural resources sector carries a high risk of corruption, particularly clientelism and patronage. The country’s mining sector and its fishing trade are its most vulnerable industries (HRR 2014). Favoritism and clientelism pervade the mining sector: It is common for relatives and associates of local politicians to be awarded contracts and licenses (Risk Advisory, May 2013). Furthermore, senior positions within the country’s mining organizations are allocated to members of the President’s own tribe, Awalâd Busba’a (BTI 2016).

US authorities are investigating Kinross Gold Corporation for alleged corruption in Mauritania, among other countries. Reportedly, Kinross awarded the Mauritanian firm Maurilog, in partnership with French company Schenker a transport and logistics contract for mining operations worth USD 50 million. Leaked documents show that Kinross awarded the contract based on the “political advantage” of the Mauritanian company, which was owned by a former top government official and close associate of the president. Kinross is also being investigated for bribing government officials in Mauritania; it ended its three-year contract with Schenker/Maurilog after just one year (The Globe and Mail, Mar. 2016).

Mauritania was accepted as a compliant country of the Extractive Industry Transparency Intiative (EITI) in 2013.