Unlike many countries on the African mainland, Mauritius has
never been able to boast of an abundance of natural resources.
“[Mauritius] had to survive,” says Kamal Taposeea, chairman of Minerva Fiduciary Services. “We didn’t have anything – we had sugar cane and textiles.”
Today, these two industries still play a major role in the country’s economy, but the ICT and financial services sectors have also come to the fore.
Sugar was first cultivated on the island in the 17th century and this industry remains a significant sector today – the country exports over 400 000 tons annually and is part of the manufacturing sector, which today makes up around 17% of the economy.
Other major exports include processed fish, clothing and radio transmission components.
On 22 August the country’s prime minister, Anerood Jugnauth, announced that the government seeks to expand this sector so it makes up 25% of GDP as part of the country’s Vision 2030 economic plan.
Over the past few decades, the services sector – encompassing tourism, the financial sector and ICT – has grown substantially; today contributing 67% of the country’s GDP.
The Mauritian government intends to turn the entire country into a ‘Cyber Island’, with plans to make WiFi accessible across the country.
The government aims to bring fibre connectivity to the whole country in the next three years and to increase the number of WiFi hotspots around the island from 15 to 350.
It will also allow ICT companies that have over 100 employees to hire foreign experts in order to facilitate growth and innovation in the sector.
Mauritius has geared its economy towards attracting foreign investment, which has grown 164% from an average of $124m a year between 2005 and 2007 to $327m in 2014, according to United Nations statistics.
It has optimised trade relations – it belongs to both SADC and the Common Market for Eastern and Southern Africa (Comesa).
The country has also entered into Double Taxation Avoidance Treaties with more than 42 countries, including South Africa and India.
Mauritius has no foreign exchange controls and offers an attractive tax environment.
Taposeea points out that many South African companies that are moving into the rest of Africa have set up branches in Mauritius – this includes Shoprite, Woolworths and the Spur Corporation.
Another major factor that attracts international business to Mauritius is the fact that the services of chartered accountants, trust and estate practitioners, lawyers and accredited chartered secretaries, among others, are far more affordable than in Europe and US, but the standard is nevertheless high.
“That’s why people come here – we’ve got the professionals that have the knowledge of global business,” says Taposeea.
Big-name banks such as Investec, HSBC, Deutsche Bank and Barclays all have a presence in the country.
The Mauritian government also wants to renew its focus on the so-called blue economy.
This is an excerpt from an article that originally appeared in the 15 October 2015 edition of finweek. Buy and download the magazine here.