1. Mauritius a financial centre for the region.
Development of Mauritius as a regional financial centre requires a sound, strong,
modern and diversified domestic financial system. We have made significant progress in
this respect.
Our financial services sector has been showing strong growth performance. The
increasing importance of the sector is reflected in its growing contribution to the GDP,
which already exceeds 11%.
The sector has modernised considerably, particularly through the use of IT. The sector
has also diversified, and continues to diversify, into newer and more sophisticated areas.
Of late, the sector has been acquiring a regional dimension, in line with the general
development strategy of the country. For instance, local banks have already started to
diversify their asset based by expanding overseas both for business growth and for
diversification of risks. Our banks are present in a number of other Indian Ocean islands,
on mainland Africa, in France and in India. This is a trend, which will further strengthen
in the years to come.
Our financial players are also seeking strategic alliances to consolidate their
presence in the region.
A number of reputed international financial companies have established their presence
in Mauritius, not only in the offshore sector but also in the local domestic market.
2. Private sector is very dynamic and has shown interest in the region. Do you
support those initiatives?
An important component of our development strategy is to increase our economic space by
capitalising on the unique investment opportunities which countries in the region are
offering.
We are implementing policies and strategies to deepen the regional integration of our
economy through a stronger presence of our firms in the region and greater penetration of
our products.
Government itself has been engaged in active economic diplomacy, both at the bilateral
and at level of the regional organisations, to help generate fruitful investment and
business opportunities in various fields.
We have signed a Memorandum of Understanding to set-up a Special Economic Zone in
Mozambique, encompassing 100,000 hectares of land.
Private sector firms are acquiring, primarily on their initiative, additional land in
Mozambique for development projects.
Government as a facilitator, fully supports these initiatives of the private sector. In
my last Budget Speech I announced the setting up of a Regional Development Certificate
Scheme under which Government will grant incentive certificate to companies investing in
member-countries of SADC, COMESA, IOC and IOR-ARC.
3. Plans to develop the Mauritian banking sector and the Stock Exchange.
We are emphasising the following elements in the further development of our financial
services sector.
Modernisation of the infrastructure and facilities offered
Diversification into more sophisticated and higher value-added activities and products
Reinforcement of the prudential supervisory and regulatory regime
Regionalisation
These also hold good as far as the development of the banking sector and Stock Exchange
is concerned.
The banking sector will intensify efforts to make full use of the emerging information
and communication technologies.
As far as the Stock Exchange is concerned, new listing rules are soon to be
promulgated. This will allow Mauritius to participate, with other SADC Stock Exchanges, in
the project of harmonisation of listing rules, which will turn, facilitate cross-border
listing. The new listing rules, which will call for disclosure requirements from, listed
companies along the same lines as those of more sophisticated markets and thus bring them
to international levels.
4. The influence of the South East Asian crisis on Mauritius
We, in, Mauritius have managed to navigate rather well through the economic and
financial turbulence despite our small size and limited resources. We have been able to
sustain the growth momentum of our economy. In fact, while many countries are revising
downward their growth figures, we, on the other hand, have revised upward our forecast for
economic growth for this year, from 5.4 to 5.6 %.
Our currency has withstood the shocks generated by the Asian crisis much better than
many other emerging market currencies.
However, there are no grounds for complacency. We are fully aware of the fierce
competition that will result on the world markets in the aftermath of the financial
turmoil. That is why we must at all costs increase productivity and upgrade quality if we
want our products to remain internationally competitive.
| 5. Your opinion about the decrease in the levels of foreign investment
The trend in foreign direct investment in Mauritius in recent years can be seen in the
following figures:
| Year | Amount RS million | | 1989 | 546 | | 1990 | 609 | | 1991 | 297 | | 1992 | 230 | | 1993 | 260 | | 1994 | 360 | | 1995 | 325 | | 1996 | 658 | | 1997 | 1164 |
Note: Figure for 1997 includes investment amounting to RS 964 million by Nedcor
Bank Ltd (South Africa) in SBM Ltd.
Reasons for the low levels of FDI:
Capital has become more mobile globally and competition for it has intensified
Traditionally foreign investment in our country has been in the low-skilled textiles and garments activities. Many of the advantages, which Mauritius earlier offered e.g. cheap, labour no longer hold.
New low-cost producers have entered on the international scene.
However, I expect the present situation to be a transitory one and expect foreign
investment to pick up in the coming years. We have invested a lot in upgrading our skill
base and in diversifying our industrial activities into higher value-added ones. Our
position as a springboard for tapping regional markets is being increasingly appreciated.
Moreover, with the BOT mechanism in place, we expect significant foreign investment in our
infrastructural development also. In addition, we are taking a number of measures to
further improve the investment and business climate in the country.
6. Measures to make the country more attractive for new foreign investments.
We attach a lot of importance to attracting foreign investment. It can act as a
complement to domestic savings to meet our significant investment requirements. The
economy requires large investments to modernise and move into higher value-added
activities. In particular, we must expand and further modernise our infrastructure.
In addition to a source of foreign exchange, we also see foreign investment as a
vehicle for acquiring modern technology and latest management and marketing techniques.
It has always been our endeavour to provide an investor-friendly environment. We are
taking certain measures to further improve the existing investment climate.
Permanent Residence Scheme for certain categories of investors.
A Board of Investment is being set-up, which will streamline the project approval process thereby reducing substantially the long delays in processing and approving investment projects.
The issuing of work permits and other approvals are being simplified. We also plan to issue multiple entry visas.
We have been expanding our Investment Promotion and Protection Agreement network to enhance investor confidence.
Significant investments are being made to continuously upgrade in infrastructure facilities, particularly in the fields of telecom and IT to keep up with technological improvements.
7. Sectors where foreign investment is welcome with a Build Own and
Transfer policy
Sectors where foreign investment is welcome within a BOT framework include:
Telecommunications, water supply, electric power, airport and port development, public
roads, transport, hotels and tourism related projects, environment and solid waste
management projects, health education and scientific research infrastructure.
Some of the forthcoming projects to be undertaken under the Concession Projects Scheme
are as follows:
A 30 MV Coal-Fired Power Station.
Northern Bus Terminal
Development of Mahebourg Waterfront
Wind power development
New Airport at Agalega
Victoria Square Project.
8. Final message to our readers
Come, invest and set-up a base in Mauritius. Tremendous opportunities beckon you on the African continent and in the Indian Ocean Region. Share in the excitement and profits. Mauritius offers you the most secure, congenial, reliable and investor-friendly place to do business that you can hope to find in the region.
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