Information

Mauritius Economy - History


GDP (2003): $5.5 billion.
Real growth rate (2003): 4.4%.
Per capita income (2003): $4,484.
Avg. inflation rate (2003): 4%.

Budget: Income .............. $824 million
Expenditure ... $1 BillionMain Crops: Sugarcane, tea, corn, potatoes, bananas, pulses; cattle, goats; fish .Natural Resources: Arable land, fish .

Major Industries: Food processing (largely sugar milling), textiles, clothing; chemicals, metal products, transport equipment, nonelectrical machinery; tourism.

Mauritius has one of the strongest economies in Africa, with a GDP of $4.5 billion in 2001 and per capita income close to $3,800. The economy has sustained high 6% annual growth rate for the last two decades--first driven by sugar, then textiles/apparel and tourism, and most recently by financial services. Independent assessments uniformly rank Mauritius as one of the most competitive economies in Africa. With a per capita income of U.S. $3,800, Mauritius is now classified as a middle-income country and ranks, on the basis of the recent Human Development Index for 173 countries, 67th globally, 40th among developing countries, and second in Africa.

Economic growth slowed down in 2001, falling to 5.8% from 9.3% in 1999, mainly as a result of a lower growth rate in the sugar and tourism sector. In 2002, the economy expanded by more than 4%, boosted considerably by increased trade through the Africa Growth and Opportunity Act (AGOA) legislation.

Over the past several years Mauritius registered balance-of-payments surpluses leading to a comfortable external reserves position (currently equivalent to more than 9 months of imports), an external debt service ratio of only 7%, and modest single-digit inflation on average. The inflation rate increased from 4.2% in 2000 to 5.4% in 2001. It is expected to reach 6.3% in 2002, owing to the recent increase in the rate of VAT from 12% to 15% as well as large increases in government spending.

However, the rising trend in unemployment and the deterioration in public finances are matters of concern. The unemployment rate rose steadily from 2.7% in 1991 to 9.2% in 2001, representing 48,000 unemployed people. It reached just above 10% in 2002. The budget deficit increased from 3.8% of GDP in fiscal year 1999-2000 (July-June) to 6.7% in FY 2001-02. As a result of a series of fiscal measures taken by the government, the budget deficit was expected to fall to 6% on FY 2002-03. However, the government's objective is to bring down the budget deficit gradually to about 3% of GDP by FY 2005-06.

While Mauritius relies heavily on exports of sugar, textiles/garments, and tourism, services like Freeport, offshore business, and financial services constitute other pillars of the economy. The offshore sector is playing an increasingly important role in the financial services sector and is emerging as a growth vehicle for the economy. At the end of October 2002, the number of companies registered in the offshore sector reached 20,111. The Mauritius Freeport, the customs duty-free zone in the port and airport, aims at transforming Mauritius into a major regional distribution, transshipment, and marketing center. The Freeport zone provides facilities for warehousing, transshipment operations and minor processing, simple assembly, and repackaging. At the end of October 2002, the total number of Freeport licenses issued reached 940, of which 230 companies were operational, mostly in trading activities.

There has been growing realization on the part of the government that the traditional industries of sugar, textile, and tourism are no longer capable of sustaining further wealth and job creation. Accordingly, the government is giving high priority to the development of the Information and Communications Technologies (ICT) sector with the aim of transforming Mauritius into a cyber island. The Business Parks of Mauritius, Ltd. was set up by the government to spearhead the development, construction, and management of major business and IT parks in Mauritius. It has secured a line of credit of $100 million from the Indian Government for the creation of the first cyber-city at Ebene, which is expected to be completed by December 2003. Already a number of renowned international firms engaged in software development, ICT training, PC manufacturing and call centers, are planning to start operations in the cyber city. Also expected to give a further boost to the development of the ICT sector are the recent operation of the Southern Africa Far East (SAFE) optical fiber cable and the liberalization of telecommunications services beginning January 1, 2003.

Although the near-term outlook for growth is encouraging, the challenges facing Mauritius in the long-term are daunting. On the domestic front, the decline in fertility and the aging of the population will decrease the available pool of labor for the economy, thus reducing the long-term growth potential. Also, before the end of this decade, the trade preferences and the market protection on which Mauritius has built its success will be eroded by the forces of globalizaton, liberalization, and economic integration. The elimination in December 2004 of the global quotas on clothing under the Multi-Fiber Arrangement will expose the local textile sector to competition from other exporting countries, including those in Asia and South America. In the case of sugar, ongoing negotiations between the European Union and sugar-exporting countries and future multilateral liberalization will likely reduce the profitability of the Mauritian sugar industry.

The government has taken a number of measures to prepare the country to face these challenges. With regard to sugar, the government has come up with a 5-year Sugar Sector Strategic Plan (2001-05), which provides for the restructuring and rationalization of the sugar industry, decreasing the number of sugar mills from 14 to 7 and reducing the current labor force of 30,000 by up to 7,000 through a voluntary retirement scheme. As far as the textile sector is concerned, the U.S.-Africa Growth and Opportunity Act (AGOA), which provides preferential access for apparel exports to the U.S. market, is expected to mitigate the negative effect of the elimination of the Multi-Fiber Agreement at the end of 2004. The AGOA also is seen as a good opportunity to diversify the sector by encouraging spinning and weaving operations and promoting regional integration of the local textile industry with other Sub-Saharan countries eligible for AGOA benefits.


Mauritius was first discovered by the Moors. This is corroborated by the earliest existing historical evidence of the island on a map produced by the Italian cartographer Alberto Cantino in 1502. [1] Cantino shows three islands which are thought to represent the Mascarenes (Réunion, Mauritius and Rodrigues) and calls them Dina Margabin, Dina Arobi, and Dina Moraze. The medieval Arab world called the Indian Ocean island region Waqwaq. [2]

Mauritius was later discovered and visited by the Portuguese between 1507 and 1513. Mauritius and surrounding islands were known as the Mascarene Islands (Ilhas Mascarenhas) after Pedro Mascarenhas.

An official world map by Diogo Ribeiro described "from west to east, the first island, 'Mascarenhas', the second, 'Santa Apolonia' and the third, 'Domingo Froiz.' " [3] The three islands (Réunion, Mauritius and Rodrigues) were encountered some years earlier by chance during an exploratory expedition of the coast of the Bay of Bengal led by Tristão da Cunha. The expedition ran into a cyclone and was forced to change course. Thus, the ship Cirne of the captain Diogo Fernandes Pereira, came into view of Réunion island on 9 February 1507. They called the island "Santa Apolonia" ("Saint Apollonia") in honor of that day's saint. Mauritius was encountered during the same expedition and received the name of "Cirne" and Rodrigues that of "Diogo Fernandes". [4] Five years later, the islands were visited by Dom Pedro de Mascarenhas [5] who left the name Mascarene for the whole region. The Portuguese took no interest in these isolated islands. They were already established in Asia in Goa, on the coast of Malabar, on the island of Ceylon (now Sri Lanka) and on the Malaysian coast.

Their main African base was in Mozambique, therefore the Portuguese navigators preferred to use the Mozambique Channel to go to India. The Comoros at the north proved to be a more practical port of call. Thus no permanent colony was established on the island by the Portuguese.

In 1598, the second Dutch Expedition to Indonesia consisting of eight ships, under the orders of admirals Jacques Cornelius van Neck and Wybrandt van Warwyck, set sail from Texel, Netherlands, towards the Indian subcontinent. The eight ships ran into foul weather after passing the Cape of Good Hope and were separated. Three found their way to the northeast of Madagascar, while the remaining five regrouped and sailed in a southeasterly direction. On 17 September, the five ships under the orders of Admiral van Warwyck came into view of Mauritius. On 20 September, they entered a sheltered bay which they named "Port de Warwick" (now known as "Grand Port"). They landed and decided to name the island "Prins Mauritz van Nassaueiland," after the son of William the Silent, Prince Maurits (Latin version: Mauritius) of the House of Nassau, the stadtholder of most of the Dutch Republic, and after the main vessel of the fleet, the "Mauritius". From that time, only the name Mauritius has remained. On 2 October, the ships again took to the sea towards Bantam. Some of the descendants of William of Orange through the female line reside in Mauritius, including Jill Holloway, a distinguished businesswoman, marine journalist and writer. [6]

From then on, the island's Port de Warwick was used by the Dutch as a stopover after long months at sea. In 1606, two expeditions came for the first time to what would later become Port-Louis in the northwest part of the island. The expedition, consisting of eleven ships and 1,357 men under the orders of Admiral Corneille, came into the bay, which they named "Rade des Tortues" (literally meaning "Harbor of the Tortoises") because of the great number of terrestrial tortoises they found there. [7] From that date, Dutch sailors shifted their choice to Rade des Tortues as a harbor.

In 1615, the shipwreck and death of governor Pieter Both, who was coming back from India with four richly laden ships in the bay, led Dutch sailors to consider the route as cursed, and they tried to avoid it as much as possible. In the meantime, the British and the Danes were beginning to make incursions into the Indian Ocean. Those who landed on the island freely cut and took with them the precious heartwood of the ebony trees, then found in profusion all over the island.

Dutch colonization started in 1638 and ended in 1710, with a brief interruption between 1658 and 1666 (the year of Great Fire of London). Numerous governors were appointed, but continuous hardships such as cyclones, droughts, pest infestations, lack of food, and illnesses finally took their toll, and the island was definitively abandoned in 1710.

The island was not permanently inhabited for the first forty years after its "discovery" by the Dutch, but in 1638 Cornelius Gooyer established the first permanent Dutch settlement in Mauritius with a garrison of twenty-five. He thus became the first governor of the island. In 1639, thirty more men came to reinforce the Dutch colony. Gooyer was instructed to develop the commercial potential of the island, but he did nothing of the sort, so he was recalled. His successor was Adriaan van der Stel, who began the development in earnest, developing the export of ebony wood. For that purpose, van der Stel brought 105 Malagasy slaves to the island. [8] Within the first week, about sixty slaves were able to escape into the forests about twenty of them were recaptured.

In 1644, the islanders were faced with many months of hardships, due to delayed shipment of supplies, bad harvests, and cyclones. During those months, the colonists could only rely on their own ability to feed themselves by fishing and hunting. Nonetheless, van der Stel secured the shipment of 95 more slaves from Madagascar, before being transferred to Ceylon. His replacement was Jacob van der Meersh. In 1645, the latter brought in 108 more Malagasy slaves. Van der Meersh left Mauritius in September 1648 and was replaced by Reinier Por.

In 1652, more hardships befell the inhabitants, colonists and slaves alike. The population was then about a hundred people. The continuing hardships affected the commercial potential of the island and a pullout was ordered in 1657. On 16 July 1658, almost all the inhabitants left the island, except for a ship's boy and two slaves who had taken shelter in the forests. [9] Thus the first attempt at colonization by the Dutch ended badly.

In 1664, a second attempt was made, but this one also ended badly as the men chosen for the job abandoned their sick commander, van Niewland, without proper treatment, and he would die.

From 1666 to 1669, Dirk Jansz Smient administered the new colony at Port de Warwick, with the cutting down and export of ebony trees as the main activity. When Dirk Jansz Smient left, he was replaced by George Frederik Wreeden, who died in 1672, drowned with five other colonists during a reconnaissance expedition. His replacement would be Hubert Hugo. Hugo was a man of vision and wanted to make the island into an agricultural colony. His vision was not shared by his superiors, and he eventually had to abandon the attempt.

Issac Johannes Lamotius became the new governor when Hugo left in 1677. Lamotius governed until 1692, when he was deported to Batavia for judgment for persecuting a colonist whose wife had refused his courtship. A new governor, Roelof Diodati, was then appointed in 1692. Diodati faced many problems in his attempts to develop the island, such as cyclones, pest infestations, cattle illnesses, and droughts. Discouraged, Diodati eventually gave up and his replacement would be Abraham Momber van de Velde. The latter fared no better, but remained the last Dutch governor of the island until it was abandoned in 1710.

Slaves were not particularly well treated by the colonists, and revolts or the act of organizing one were severely repressed and punished. Some punishments consisted of amputation of various parts of the body and exposure in the open air for a day as example to others, eventually culminating in condemned slaves’ execution at sunset. [ citation needed ]


Mauritius example of economic development

MAURITIUS is ranked by the World Economic Forum as the most competitive economy in Sub-Saharan Africa and high income country with a Gross National Income (GNI) per capita of US$12,740 (Sub-Saharan Africa’s GNI per capita is US$1,555). Despite its limitations on natural resources, population size (1,3 million people) and land size (Only 2,040km2), the country ranks high in Africa on all social, economic and governance indicators.

Mauritius is an island nation in the Indian Ocean, off the African continent and east of Madagascar. It is a former colony of Portugal, Netherlands, France and lastly Britain where it gained Independence from in March 1968. Since gaining independence, the Island nation has achieved sustained economic stability and progress in a feat only matched by a few other Sub-African countries. It has successfully translated economic growth into concrete poverty reduction policies and improvements in human capital development.

Its poverty rates remains low by international standards, with less than 1% of the population estimated as living on less than US$1 a day (According to the World Bank 2020 report, Zimbabwe has 7,9 million people or 49% of the population living on less than US$1 per day). Mauritius is the only country in Africa where inequality has been reduced significantly (as measured by the Gini Coefficient) from 46 to 37 between 1980 and 2020.

Inequality in Zimbabwe has risen sharply from 45 in 2017 to 50 in 2019 with the richest 10% of Zimbabweans consuming 20 times more than the poorest 10%. Mauritius has the lowest under-5 child mortality rate in Sub Saharan Africa of 17 deaths out of 1,000 live births (Compared to Zimbabwe’s 55 deaths as of 2019).

Mauritius has undergone a remarkable economic transformation from a low-income, sugar cane based economy to a diversified, high-income country that attracts considerable foreign investment (FDI Stock of over US$5.8 billion in 2019) and averaged 4% in real GDP growth from 2015 to 2020.

The country has lifted almost all of its citizens out of poverty with about 92% of adult population having access to a bank account. Zimbabwe can learn from Mauritius success story in the following aspects:

Economic diversification

Mauritius has a mixed developing economy based on manufactured exports, agriculture, tourism, and financial services. Government efforts to diversify the economy since 1980 have been overwhelmingly successful and the island is no longer as dependent on sugar production as it was throughout its history. Low cost of doing business for tourism players has made tourism a major earner of foreign currency, utilising the country’s natural scenery. In 2001 the government created the Information and Communication Technologies Authority (ICTA) to promote and fund technology growth in the country with hi-tech hubs and block chain technology being the key focus areas. More than 40% of the labour force is employed in the areas of finance and services. Construction and manufacturing employ about 33% of the labour force, and about 10% is employed in the agricultural sector (In Zimbabwe, agriculture employs more than 66% of the workforce).

Mauritius has few viable mineral resources. Basalt and lime are mined but the mining sector is very small compared to largely mineral dependent Sub Saharan countries. The country imports bulk of its mineral commodities such as Chrome and Steel from India.

Electricity is largely generated from imported petroleum, with a small percentage derived from hydropower. Sugar plantations often use bagasse (A fibre from sugarcane) as fuel to produce electricity.

Zimbabwe needs to craft policies that crowd in private sector finance in agriculture so as to develop value addition linkages in the local supply chain, while providing substantial incentives for miners to value add their minerals locally. This will provide the much needed impetus to diversify the economy from overdependence on agriculture, and mineral and raw tobacco exports.

Ease of doing business

Mauritius’ quest to continuously improve its business climate and attract investment is unparalleled. The country has moved seven places to 13th out of 190 countries globally (1st in Africa) according to the latest World Bank Ease of Doing Business Report 2020. Key reforms included the automation of public services, reviewing of licensing procedures and regulatory amendments through the enhanced Business Facilitation Act of 2017 and 2019 in line with international best practices. Registering a business online takes less than two hours (7-9 days in Zimbabwe), getting electricity connectivity takes less than 21 days while registering property is completed within 24 hours (At least 30 days in Zimbabwe).

The country has no exchange controls in terms of capital movement and it has signed non-double taxation agreements with 35 countries in the world. The country has built up a solid financial sector, specialising in offshore banking and financial services. The country has a relatively low barrier to gaining permanent residency (Automatic permanent residency if one buys a US$500,000+ home in the country).

The country has a sophisticated, transparent and well-regulated International Financial Centre (IFC) with a conducive ecosystem. The government of Zimbabwe is modelling Victoria Falls to be the country’s IFC with transparency and consistent regulations or policies remaining the country’s Achilles heel. Zimbabwe would need free market exchange control policies that allow for free movement of capital, a harmonized tax regime and automation of its manual public service delivery system to cut on red tape and improve transparency.

Export growth and taxation

The driving force of Mauritius’ development has been its exports sectors, namely the sugar sector, tourism and the Export Processing Zones which were established in 1970. Firms operating with an EPZ certificate benefited from tax advantages, elimination of tariffs on imported inputs used by manufacturers, and flexible labour standards for EPZ workers and a lower minimum wage. Personal and corporate tax are harmonized at a low 15% and dividends are tax-free.

The Zimbabwean economy tax burden is very high and businesses would benefit from harmonization of existing taxes and cuts on duplication of roles by government agencies (over 10 departments) which do not add value to the export and import proc

Rule of law

Mauritius ranks highest on rule of law, an area where the fellow African countries persistently falter on. The country scores high on guarantees to investor property rights and constitutionalism. This has sustained investor confidence in the country, especially in its financial and property sectors. Over the past 10 years (2010 to 2020) total wealth held in Mauritius has risen by more than 195%, making it the fastest growing wealth market in Africa and one of the top three fastest growing worldwide over that period. Total wealth held in Mauritius now amounts to over US$44 billion. Property rights are backed by high levels of government integrity (especially on policy) and judicial independence. The prevalence of corruption is low by regional standards, but graft and nepotism remain concerns and are increasingly a source of public frustration.

Good governance

This is a thorn to investors in most parts of Africa (foreign or local) and Mauritius provides this amply. The country has a stable democracy and is one of Africa’s most democratic countries.

The island nation is also Africa’s most peaceful with a peace index of 1,51 and the 21st most peaceful country in the world. That is music to the ears of investors looking for markets to do business with limited civil and political unrest. Leadership stability has provided for economic policy consistency and integrity, key aspects valued by investors.

At independence, Mauritius was a monocrop economy prone to trade shocks and ethnic tensions. The country has delivered high growth rates along with macroeconomic stability and low inflation environment largely because of genuine free market economic policies, respect for rule of law and property rights, best practices in doing business and accountable governance.

The diversification strategy was also a success story for the country. Unregulated export earnings from sugar generated immense wealth, which was then used by the private sector to diversify investments into textile, tourism and financial services.

The Mauritian government has set its eyes on modernising the sugar and textile industries while promoting diversification into such other areas as information and block chain technology.

Mauritius’ accomplishments suggest at least three possible lessons for the rest of Africa. First, value added exports are crucial to economic growth.

Second, ethnic differences can be managed by an inclusive parliamentary system. Lastly, democracies can still reform economic systems in ways that foster sustainable economic growth.


Mauritius: Economic Outline

For the latest updates on the key economic responses from governments to adress the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Mauritius has had low but steady growth rates over the last few years (averaging 3.8% during 2015&ndash19) and is among the most dynamic economies in Sub-Saharan Africa. Nevertheless, the COVID-19-induced crisis took a severe toll on the Mauritian economy: although the country did not record many cases, the GDP plummeted by an estimated 15.8% in 2020, mostly due to the international travel restrictions which prompted a collapse in tourism arrivals (the sector represents one-fifth of the island&rsquos GDP). The economy is expected to rebound in 2021 (+6.6%), fuelled by the construction sector and public investment, as well as by a recovery in the tourism industry, albeit most travel restrictions were extended in early 2021. The IMF forecasts Mauritius&rsquo growth to stabilize around 5.2% in 2022.

The country had been progressively reducing its debt-to-GDP ratio in recent years nevertheless, the trend reversed in 2019 (82.8%) and was exacerbated by the COVID-19 crisis (87.8% in 2020). However, such debt is almost exclusively denominated in local currency and three-quarters of it is domestic. The IMF forecasts the ratio to remain stable over the forecast horizon. In recent years, the public wage bill has been on the rise, and a more generous universal pension scheme has been introduced however, a better tax collection has helped rising revenues and thus offsetting spending. Once again, though, the global crisis caused a contraction in revenues, which coupled with increased public expense to cope with the effects of the pandemic resulted in a deficit of -10.2% in 2020 (from 2.2% one year earlier). Most of the measures have been extended into 2021 and will keep weighing on public finances. Meanwhile, soaring food prices contributed to the acceleration of inflation (2.5%, was 0.5% in 2019), which should follow an upward trend in the forecasted period (2.6% this year and 3.9% in 2022 &ndash IMF). Overall, the country&rsquos economy is driven by the services sector, which accounts for around 67.7% of GDP, with tourism (catering, accommodation, leisure, etc.) and financial services being the most vital sectors for the economy. The country's economy is diversified and also relies on its offshore financial activity, textile industry and production of sugarcane. Medical tourism, outsourcing, new technologies and the luxury industries are among developing sectors. Overall, the industrial sector accounts for almost one-fifth of GDP, while the agricultural sector contributes around 3% (World Bank). Mauritius enjoys political stability, with the government currently in the hands of the centre-left Morisien Alliance led by Prime Minister Pravind Jugnauth.

The island of Mauritius has made substantial progress in its campaign for social equality and poverty reduction, and represents an exemplary model of development. The island is classified as an upper-middle-income country by the World Bank, with a high Human Development Index, and is seeking to become a high-income country within the next decade. According to the IMF, GDP per capita (PPP) reached almost USD 24,000 in 2019 (latest data available), the second-highest in Africa after the Seychelles. The IMF expects the unemployment trend to be heavily affected by the negative economic impact of the COVID-19 pandemic, the rate being estimated at 10.9% in 2020 (from 6.7% one year earlier, mostly due to large redundancy in the tourism sector), before decreasing to around 9.2% in 2022. Female labour participation is significantly low compared to male labour participation and youth unemployment stands around 25%.


Agricultural Sector

The agricultural sector comprised predominantly sugar production, has been the back bone of the Mauritian economy for more than three centuries and despite diversification, it still remains an important industry. Around 98% of total sugar exports are directed to the European Union, but in terms of export earnings, total sugar exports now represent around 20% of total domestic exports compared to over 70% two decades ago.


In Mauritius, Champions for the Blue Economy

Marine pollution, intensified agriculture, unchecked tourism and heavy industries are degrading the ocean and coasts, killing mangroves and smothering coral reefs, according to the scientists who attended this month’s African Ministerial Conference, “Towards COP22: African Ministerial Conference on Ocean Economies and Climate Change,” co-organized by the World Bank Group and the Government of Mauritius.

Infrastructure in disrepair and limited environmental governance has contributed to a depletion of fisheries and an increase in erosion in Africa. The most vulnerable people are those living closest to the sea, and they are also the poorest.

Yet the economic potential of the sea is immense. If the ocean were a nation, it would be the world’s seventh largest economy with a GDP of $24 trillion according to the WWF report Reviving the Ocean Economy: The case for action—2015. West Africa’s coastal zone, where 31% of the population lives, is the source of 56% of that region’s GDP. But that wealth is under threat -- experts project a 50% reduction in the number of regional fisheries-related jobs by the 2050s due to declining fish stocks.

The goal of the Mauritius conference was for African countries to strategize together on how best to build more resilient blue economies through regional partnerships, leveraging and catalyzing finance and knowledge sharing, and help place the ocean firmly at the center of the international agenda before COP22.

At the conference, Ministers from SIDS, African coastal countries, scientists, investors, development partners and civil society joined forces to support investment projects fueling the ocean economy with good fishing practices, improved and increased aquaculture, sustainable tourism, and greener and stronger ports, while adapting to and mitigating the severe impacts of climate change.

“The ocean is not the problem, it is a space for solutions,” said H. E. Cipriano Gomez, Secretary General of the Ministry of Guinea-Bissau, a West African coastal country with more than 90 islands. “We aim to improve food security by improving access to production areas, rural markets, and the rehabilitation of sea transport.”

Blue Economy 101: Replenish the Fish

The Mauritian beach called Bain des Dames is less than 10 miles from the fishing community at Pointe Aux Piments. According to local lore, Bain des Dames is named for the African women brought to Mauritius as slaves to work on the sugar cane plantations and who bathed in the sea here.

Don Banchoo, 60, is the chief fisherman at Bain des Dames, and his view of his profession is grim. “We are ancestral fishermen,” he said. “In a few years this will disappear. Our children don’t want this job due to climate conditions and a lack of security.”

While Banchoo’s fears are real, the African Ministerial Conference was a forum for solutions that can address them. They included best practices for public-private partnerships for sustainable fishing accelerated and disease-free aquaculture projects sustainable fishing practices in Mozambique finding alternatives to sand for the making of concrete and approaches to mangroves restoration and reef rehabilitation.

“The blue economy is a new frontier for Africa,” said Jamal Saghir, Senior Regional Adviser for the Africa region at the World Bank. “African coastal and insular countries wish to invest in the blue economy and have requested technical and financial support. And they need to factor climate change in the equation, which is ambitious. The World Bank intends to support them by mobilizing its own IDA resources and climate finance from sources like the Green Climate Fund (GCF). As requested by the Ministerial Conference held in Mauritius, this will be discussed with the GCF directly and there will be a session dedicated to Africa at Oceans Day at COP22 in Marrakesh.”

“Ocean ecosystems are vast complex and dynamic,” FAO Director General Jose Graziano da Silva said at the conference. “The oceans bordering the African continent are full of secrets…requiring novel innovative solutions.”

He added that with the support of the World Bank and the FAO, “African countries will be champions” of the ocean economy.


The Mauritius example on economic development

Mauritius is ranked by the World Economic Forum as the most competitive economy in Sub-Saharan Africa and high income country with a Gross National Income (GNI) per capita of US$12,740 (Sub-Saharan Africa's GNI per capita is US$1,555). Despite its limitations on natural resources, population size (1.3 million people) and land size (Only 2,040km2), the country ranks high in Africa on all social, economic and governance indicators.

Mauritius is an island nation in the Indian Ocean, off the African continent and east of Madagascar. It's a former colony of Portugal, Netherlands, France and lastly Britain where it gained Independence from in March 1968. Since gaining independence, the Island nation has achieved sustained economic stability and progress in a feat only matched by a few other Sub-African countries. It has successfully translated economic growth into concrete poverty reduction policies and improvements in human capital development. Its poverty rates remains low by international standards, with less than 1% of the population estimated as living on less than US$1 a day (According to the World Bank 2020 report, Zimbabwe has 7.9 million people or 49% of the population living on less than US$1 per day). Mauritius is the only country in Africa where inequality has been reduced significantly (as measured by the Gini Coefficient) from 46 to 37 between 1980 and 2020. Inequality in Zimbabwe has risen sharply from 45 in 2017 to 50 in 2019 with the richest 10% of Zimbabweans consuming 20 times more than the poorest 10%. Mauritius has the lowest under-5 child mortality rate in Sub Saharan Africa of 17 deaths out of 1,000 live births (Compared to Zimbabwe's 55 deaths as of 2019).

Mauritius has undergone a remarkable economic transformation from a low-income, sugar cane based economy to a diversified, high-income country that attracts considerable foreign investment (FDI Stock of over US$5.8 billion in 2019) and averaged 4% in real GDP growth from 2015 to 2020. The country has lifted almost all of its citizens out of poverty with about 92% of adult population having access to a bank account. Zimbabwe can learn from Mauritius success story in the following aspects:

Economic Diversification
Mauritius has a mixed developing economy based on manufactured exports, agriculture, tourism, and financial services. Government efforts to diversify the economy since 1980 have been overwhelmingly successful and the island is no longer as dependent on sugar production as it was throughout its history. Low cost of doing business for tourism players has made tourism a major earner of foreign currency, utilizing the country's natural scenery. In 2001 the government created the Information and Communication Technologies Authority (ICTA) to promote and fund technology growth in the country with hi-tech hubs and block chain technology being the key focus areas. More than 40% of the labour force is employed in the areas of finance and services. Construction and manufacturing employ about 33% of the labour force, and about 10% is employed in the agricultural sector (In Zimbabwe, agriculture employs more than 66% of the workforce). Mauritius has few viable mineral resources. Basalt and lime are mined but the mining sector is very small compared to largely mineral dependent Sub Saharan countries. The country imports bulk of its mineral commodities such as Chrome and Steel from India. Electricity is largely generated from imported petroleum, with a small percentage derived from hydropower. Sugar plantations often use bagasse (A fibre from sugarcane) as fuel to produce electricity. Zimbabwe needs to craft policies that crowd in private sector finance in agriculture so as to develop value addition linkages in the local supply chain, while providing substantial incentives for miners to value add their minerals locally. This will provide the much needed impetus to diversify the economy from overdependence on agriculture, and mineral and raw tobacco exports.

Ease of doing business
Mauritius' quest to continuously improve its business climate and attract investment is unparalleled. The country has moved seven places to 13th out of 190 countries globally (1st in Africa) according to the latest World Bank Ease of Doing Business Report 2020. Key reforms included the automation of public services, reviewing of licensing procedures and regulatory amendments through the enhanced Business Facilitation Act of 2017 and 2019 in line with international best practices. Registering a business online takes less than two hours (7-9 days in Zimbabwe), getting electricity connectivity takes less than 21 days while registering property is completed within 24 hours (At least 30 days in Zimbabwe).
The country has no exchange controls in terms of capital movement and it has signed non-double taxation agreements with 35 countries in the world. The country has built up a solid financial sector, specializing in offshore banking and financial services. The country has a relatively low barrier to gaining permanent residency (Automatic permanent residency if one buys a US$500,000+ home in the country). The country has a sophisticated, transparent and well-regulated International Financial Centre (IFC) with a conducive ecosystem. The government of Zimbabwe is modelling Victoria Falls to be the country's IFC with transparency and consistent regulations or policies remaining the country's Achilles heel. Zimbabwe would need free market exchange control policies that allow for free movement of capital, a harmonized tax regime and automation of its manual public service delivery system to cut on red tape and improve transparency.

Export growth and Taxation
The driving force of Mauritius' development has been its exports sectors, namely the sugar sector, tourism and the Export Processing Zones which were established in 1970. Firms operating with an EPZ certificate benefited from tax advantages, elimination of tariffs on imported inputs used by manufacturers, and flexible labour standards for EPZ workers and a lower minimum wage. Personal and corporate tax are harmonized at a low 15% and dividends are tax-free. The Zimbabwean economy tax burden is very high and businesses would benefit from harmonization of existing taxes and cuts on duplication of roles by government agencies (over 10 departments) which do not add value to the export and import process.

Rule of law
Mauritius ranks highest on rule of law, an area where the fellow African countries persistently falter on. The country scores high on guarantees to investor property rights and constitutionalism. This has sustained investor confidence in the country especially in its financial and property sectors. Over the past 10 years (2010 to 2020) total wealth held in Mauritius has risen by more than 195%, making it the fastest growing wealth market in Africa and one of the top 3 fastest growing worldwide over that period. Total wealth held in Mauritius now amounts to over US$44 billion. Property rights are backed by high levels of government integrity (especially on policy) and judicial independence. The prevalence of corruption is low by regional standards, but graft and nepotism remain concerns and are increasingly a source of public frustration.

Good Governance
This is a thorn to investors in most parts of Africa (foreign or local) and Mauritius provides this amply. The country has a stable democracy and is one of Africa's most democratic countries. The island nation is also Africa's most peaceful with a peace index of 1.51 and the 21st most peaceful country in the world. That is music to the ears of investors looking for markets to do business with limited civil and political unrest. Leadership stability has provided for economic policy consistency and integrity, key aspects valued by investors.

At independence, Mauritius was a monocrop economy prone to trade shocks and ethnic tensions. The country has delivered high growth rates along with macroeconomic stability and low inflation environment largely because of genuine free market economic policies, respect for rule of law and property rights, best practices in doing business and accountable governance. The diversification strategy was also a success story for the country. Unregulated export earnings from sugar generated immense wealth which was then used by the private sector to diversify investments into textile, tourism and financial services. The Mauritian government has set its eyes on modernizing the sugar and textile industries while promoting diversification into such other areas as information and block chain technology. Mauritius' accomplishments suggest at least three possible lessons for the rest of Africa. First, value added exports are crucial to economic growth. Second, ethnic differences can be managed by an inclusive parliamentary system. Lastly, that democracies can still reform economic systems in ways that foster sustainable economic growth.


Cultural Heritage of Mauritius

The population of Mauritius is approximately 1.26 million, and is a heterogeneous population consisting of 68% Indo-Mauritians (of Indian origin), 27% Creole (mixed African and European heritage), 3% Sino-Mauritians (of Chinese origin) and 2% others (usually of European background). Life expectancy in Mauritius is around 73 years, which is quite high among developing nations.

Despite being a secular country, most Mauritians acknowledge religion to be a major part of their identity. The most popular religion is Hinduism, followed by Christianity, and then Islam. A very small minority follow Buddhism. Many public holidays are attributed to religious festivals, such as Eid, Diwali, Christmas, and Chinese New Year. This beautiful blend of cultures and religious beliefs is reflected in the cuisine of the island.

Mauritius has its own unique music called Séga. It is considered the national music of Mauritius, and is not appropriated by any particular ethnicity or cultural group, and is loved by all. It is a rhythmic, lively music which originated from the African slaves, as a way to dispel their sadness and misery, and is almost always sung in creole.

There are only 3 instruments used in creating the music: the ravanne, the maravanne, and the triangle. The ravanne is a tambourine-like instrument, used for drum beats. It is made out of goat skin. The maravanne is a rattle, and the triangle is a piece of metal rod that has been shaped into a triangle.

Interestingly, the dance that goes along with the music is also called Séga. The main movements consist of shuffling the feet and swaying the hips, usually simultaneously, which is an art form only few can truly master. The &ldquoSeggae&rdquo is another type of Mauritian music that has become very popular on the island, and is a fusion of reggae, Séga, and Indian beats.


Mauritius - Country history and economic development

1510. Portuguese visit Mauritius, then an uninhabited island.

1598. Dutch settle on the island, introducing sugar cane.

1710. Dutch leave the island for the Cape of Good Hope in South Africa.

1715. French occupy the island. The building of the harbor of Port Louis, which then becomes the capital, takes place.

Household Consumption in PPP Terms
Country All food Clothing and footwear Fuel and power a Health care b Education b Transport & Communications Other
Mauritius 21 8 13 3 13 10 32
United States 13 9 9 4 6 8 51
South Africa N/A N/A N/A N/A N/A N/A N/A
Comoros N/A N/A N/A N/A N/A N/A N/A
Data represent percentage of consumption in PPP terms.
a Excludes energy used for transport.
b Includes government and private expenditures.
SOURCE: World Bank. World Development Indicators 2000.

1810. British conquer the island.

1814. Mauritius formally ceded to the British in the Treaty of Paris. However, most of the French settlers remain on the island and are allowed to keep their customs, religions, and laws. The French plantation aristocracy retain their economic prominence and few British people come to the colony.

1835. Britain abolishes slavery (slaves had mainly come from Madagascar, Senegal, and Mozambique), amid much resistance from French plantation owners. This leads to importation of about 500,000 Indian indentured laborers to work in the sugar cane fields. The rapid development of infrastructure takes place and the British begin to provide free primary education.

1860s. The sugar economy begins to decline, due to increased sugar production in other countries and resultant lower prices. The opening of the Suez Canal in 1869 shifts trade routes away from the Indian Ocean.

1917. Indenture system formally ends.

1959. First elections under universal suffrage are held.

1968. Mauritius achieves independence. The country adopts a constitution based on British parliamentary system. A few weeks before independence, violence between Creoles and Muslims leaves 25 people dead and hundreds injured.

1970. Enactment of the Export Processing Zones Act.

1971. The Militant Movement of Mauritius (MMM) calls a number of debilitating strikes. A coalition government led by the Mauritius Labor Party (MLP headed by Sir Seewoosagur Ramgoolam) promulgates the Public Order Act which bans many forms of political activity. A state of emergency lasts until 1976.

1982. MMM-led government gains power in elections, with Anerood Jugnauth as Prime Minister and Paul Bérenger as Finance Minister.

1983. Ruling coalition breaks up and new elections are held. Jugnauth's new party, the Militant Socialist Movement (MSM), joins with the MLP and the Mauritian Social Democrat Party to win the election comfortably.

1991. A coalition between the MSM and MMM wins the elections.

1992. The constitution is amended to make Mauritius a republic with the British Commonwealth.

2000. Anerood Jugnauth is reelected president as head of a coalition between the MSM and MMM.


Watch the video: DIGITAL HEALTH PASS is coming to MAURITIUS (January 2022).