With the nationalization of the mining sector in 1974, private foreign investment dropped drastically. Extension of government control over imports and domestic trade further curtailed the activity of foreign capital, as did ethnic clashes in 1989–91. In 1993, the government started to privatize parastatals, and by 1999, only 17% of GDP was accounted for by state-owned companies; 20% of Mauritanian companies were state-owned, including the telephone and postal services, utilities, transportation, radio and television, and mining production.
An investment code, approved in 1979, provided for tax holidays of up to 12 years on exports, imports of raw materials, and reinvested profits. The 1989 Investment Code guaranteed equal and free movement of capital in and out of Mauritania, in all sectors. It also provided incentives to new enterprises like a temporary tax reduction. Amendments have been made to the code to require hiring of Mauritanians. Tax preferences are offered for using local materials and investing in priority sectors, like agriculture, minerals and fish processing.
Foreign investment has been small since the ethnic violence of 1989 to 1991. However, in 1999 the government introduced new initiatives to attract foreign investment. From 1997 to 1999, the average annual inflow of foreign direct investment (FDI) was negligible, ranging from $100,000 to $900,000. In 2000, inflows increased to $9.2 million and then, in 2001, to $30 million. Foreign private investors include Mobil Oil of the United States, NAFTAL of Algeria, and Elf Aquitaine of France, in the petroleum sector; MINPROC, IFC of Australia in the gold sector; and CNF of China, the Al-Baraka Group of Sa'udi Arabia, and IFAFOOD of France, in the fishing sector.