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Pillars of the Economy

Mauritius Pillars of the economy

There are considered to be five pillars of the Mauritian economy: sugar; textiles and manufacturing; tourism and hospitality; financial services; and ICT. Mauritius has one of the stronger economies of the African countries, and has successfully diversified from a mainly sugar based economy to include tourism and textiles exportation from the 1980s onwards, with the newer financial and ICT sectors being added later.

Part of the strength of the Mauritian economy lies in the relative stability of its government, and the perception of a high degree of democracy, certainly when compared to other African countries, and an independent judiciary. Others strengths include its ability to attract foreign investors and gain access to foreign markets, respect for private property, good exchange rate management, and streamlined regulation.

Finance Mauritius and financial calculationThe Finance and Business segments includes: Financial Services who is emerging as a vital component of the economy in the banking and non-banking offshore sector, such as insurance, stock exchange, leasing etc. These activities take place in Mauritius but are run by people living outside the country. All transactions are made in foreign currency and they fall under the supervision of the Financial Services Commission. Several banks and other international financial companies have chosen to open branches in Mauritius to better capture investment opportunities both in Mauritius and in the region. The numerous drafts of double taxation, investment protection agreements, bilateral agreements and regulatory frameworks are a certain appeal.

Tourist in Mauritius

With the decline of the sugar industry, tourism is often thought of as the central pillar of the economy. During the past thirty years, Mauritius has developed into a middle-income diversified economy, from a low-income economy based on agriculture. Much of this economic growth has been attributed to the expansion of the luxury tourism sector. There are already over 20 international hotel chains in operation in Mauritius which amounts to over 100 hotels. Since the days when luxury hotels dominated the sector, the industry has expanded and diversified and now includes a wider variety of establishments, from basic hotels, business hotels, bed and breakfasts, villas, apartments and even Airbnb has entered the Mauritian market.

Manufacturing Industry in MauritiusMauritius developed its textile manufacturing sector to diversify its economy and by the 1980s the share of manufacturing in GDP rose to 25% from 19% in the 1970s. The development of the exportation of textiles and garments complemented the tourism and sugar export industry. However with the expiration of the Multi-Fibre Agreement and the strength of China in the global textile market, Mauritius has had to refine its strategy to find other sources of manufacturing growth. Some of the growth areas in manufacturing include: light processing, electronics, precision engineering, watchmaking, and fine and costume jewellery. Another sector with potential is the production of organic and renewable energy, like wind turbines, solar panels, and bio-fuels through the industrial production of ethanol. With continued diversification, the manufacturing sector can remain a pillar of the economy for the foreseeable future.

Shipping containerThe ‘Blue Economy’ is considered to be a new frontier for Mauritius, and the government aims to conserve and make use of the oceans, seas and marine resources for sustainable development. Mauritius lays claims to an Exclusive Economic Zone (EEZ), of approximately 2 million square kilometres in the South West Indian Ocean, This EEZ still has a reasonable stock of various fish, for both offshore tuna fishing and local artisanal fishermen who use basket traps, harpoons hook-and-line, and large nets. However, deep-sea and ‘big game’ fishing produces a better income than artisanal fishing, but much of the lagoon and other areas that were traditionally fished have been overexploited, so now the government is providing incentives to fish in better, but which for some are less convenient, areas.