- The deal will revamp the financing of imports of oil, sugar, wheat, cement, construction equipment, vehicles, and consumer goods.
- It will also support the purchase, processing, storage, and transportation of fisheries and mining products for export.
- IFC will also provide advisory support to Banque Populaire de Mauritanie (BPM), strengthening its corporate governance capacity.
Businesses across Mauritania are set to receive enhanced financial support following the International Finance Corporation’s (IFC) move to provide the Banque Populaire de Mauritanie (BPM) with $10 million a trade credit line.
The trade facility will help BPM scale up lending to businesses to finance imports of oil products. Further, importers of sugar, wheat, cement, construction equipment, vehicles, and consumer goods will benefit.
IFC loan to revamp export trade
The facility will also support the purchase, processing, storage, and transportation of fisheries and mining products for export.
Despite having vast natural resources, Mauritania faces challenges such as a high poverty rate, inequality, and limited infrastructure.
Mauritania’s mining sector, including iron ore extraction, contributes significantly to the country’s revenue and foreign exchange earnings. Other minerals found in Mauritania include gold, copper, gypsum, and phosphate.
Mauritania has recently started exploring and producing offshore oil and gas reserves. Significant discoveries have been made in the offshore blocks. And the sector has the potential to contribute significantly to the country’s economy in the future
Agriculture plays a vital role in Mauritania’s economy, employing a significant portion of the population. The main agricultural products include dates, millet, sorghum, and maize. Additionally, livestock farmers keep cattle, sheep, and goats. However, the sector faces challenges such as limited arable land, water scarcity, and vulnerability to droughts.
Seeking investors to promote growth
The government has been implementing economic reforms and seeking to attract investments to address these challenges and promote sustainable growth.
The $10 million loan, which is supported by the International Development Association, Private Sector Window, is being made through IFC’s Global Trade Finance Programme.
IFC will also provide advisory support to help BPM, strengthening its corporate governance and risk management capacities. This initiative will allow it to better meet its clients’ needs while improving its overall sustainability.
“This agreement between the IFC and BPM, as the first Mauritanian bank to join the IFC’s GTFP since 2014, is a great mark of confidence. This guarantee line will offer us an opportunity to further enhance the volume of our financing offer to our importers clients and to better meet their needs,” Chairman Banque Populaire de Mauritanie Limam Ebnou said.
Mauritania exports account 40% of GDP
With exports representing almost 40 per cent of Mauritania’s GDP, trade plays a key role in the country’s economy. IFC’s financing will support the movement of goods to and from Mauritania. At the moment, trade finance is limited in the country, hampering business and economic development.
In 2021, Mauritania exported a total of $4.14 billion, making it the number 127 exporter in the world. Between 2016 and 2021, Mauritania exports increased by $1.08 billion from $3.06 billion to $4.14 billion.
The exports were iron ore ($2.02 billion), gold ($606 million), processed crustaceans ($349 million), non-fillet frozen fish ($348 million), and copper ($313 million). The common export destinations are China ($1.76 billion), Spain ($389 million), Canada ($337 million), Turkey ($278 million), and Japan ($278 million).
BPM first Mauritanian bank to join IFC
BPM is the first Mauritanian bank to join IFC’s GTFP since 2014. By joining the program, BPM will gain access to a network of correspondent banks, enhancing its ability to meet the financing needs of small and medium-sized enterprises.
“Increasing the availability of trade finance in Mauritania will support businesses and jobs and help keep trade flowing in the country. Access to trade financing is especially important to help speed recovery from the pandemic and as businesses face new challenges arising from global economic uncertainty,” IFC’s Country Manager for Mauritania Josiane Kwenda said.
IFC’s investment is part of the $1 billion African Trade and Supply Chain Finance Program that supports Africa’s regional trade development.