The Economy of Mauritius
With a well-developed legal and commercial infrastructure and a tradition of entrepreneurship and representative government, Mauritius is one of the developing world’s most successful democracies. The economy of Mauritius has shown a considerable degree of resilience, and an environment already conducive to dynamic entrepreneurial activity has moved further toward economic freedom. The island’s institutional advantages are noticeable. A transparent and well-defined investment code and legal system have made the foreign investment climate in Mauritius one of the best in the region. Taxation is competitive and efficient. The economy is increasingly diversified, with significant private-sector activity in sugar, tourism, economic processing zones, and financial services, particularly in offshore enterprises. The government is trying to modernize the sugar and textile industries, which in the past were overly dependent on trade preferences, while promoting diversification into such areas as information and communications technology, financial and business services, seafood processing and exports, and free trade zones. Agriculture and industry have become less important to the economy, and services, especially tourism, accounted for over 72 percent of GDP. The government still owns utilities and controls imports of rice, flour, petroleum products, and cement.
Mauritius provides an environment for banks, insurance and reinsurance companies, captive insurance managers, trading companies, ship owners or managers, fund managers and professionals to conduct their international business. The economic success achieved in the 1980s engendered the rapid growth of the financial services sector in Mauritius. The following types of offshore activities can be conducted in Mauritius:
- Offshore Banking
- International Financial Services
- Offshore Insurance
- Operational Headquarters
- Offshore Funds Management
- International Consultancy Services
- Shipping and Ship Management
- Aircraft Financing and Leasing
- International Licensing and Franchising
- International Data Processing and Information Technology Services
- Offshore Pension Funds
- International Trading
- International Assets Management
Since 2002, Mauritius has invested heavily in the development of a hub in information and communication technology (ICT). The contribution of the ICT sector accounts for 5.7% of the GDP. Africa’s history is filled with horrific violence, suffering and political volatility. However, despite this, Africa manages to make important gains in recent decades. In Sub Saharan Africa particularly, GDP has averaged 5% growth per year since 2000. According to a 2019 World Bank report, poverty in Africa (defined as income less than $1.90 per day) declined from 54% in 1990 to just over 41% affecting around 400 million people – in 2015.
If Mauritius is going to achieve the “Singapore of Africa” title, then considerable work needs to be done to address the skills gap and access to opportunities for all who live in Mauritius. The latest unemployment rate of Mauritius published in 2019 averaged 6.7%, this is a major improvement from an alarming 21% in the 80’s in Mauritius. As reported by the International Monetary Fund, the evolution and growth of manufacturing in the 1980s led to job creation. Largely through the growth of exports internationally.
Since the early 1990s, the financial services and tourism industries have emerged as new growth sectors, requiring higher-skilled workers. The demand for high-skilled workers is expected to strengthen further in the coming years. This is because the government moves forward to actively promote the development of an information communications technology sector and free port activities.