Mauritius: Economy

Mauritius has one of the most successful and competitive economies in Africa; 2010 GDP at market prices was estimated at $9.5 billion and per capita income at $7,420, one of the highest in Africa. The economy is based on tourism, textiles, sugar, and financial services. In recent years, information and communication technology, seafood, hospitality and property development, healthcare, renewable energy, and education and training have emerged as important sectors, attracting substantial investment from both local and foreign investors.

Mauritius’s economy suffered at the turn of the millennium as longstanding trade preferences in textiles and sugar--the foundation of its growth strategy--were phased out. In 2005, the government embarked on an economic reform program aimed at opening up the economy, facilitating business, improving the investment climate, and mobilizing foreign direct investment and expertise. These reforms accelerated the rate of growth, reduced unemployment, and sped up the pace of diversification of the economy through the development of new sectors. All of these factors contributed to absorb the shock of the global economic recession as well as the Eurozone crisis and set the stage for Mauritius to resume accelerated growth in 2010. GDP growth is forecast at 4.1% in 2011, compared with 4.2% in 2010.

Mauritius has built its success on a free market economy. According to the 2010 Index of Economic Freedom, developed by the U.S.-based Heritage Foundation and the Wall Street Journal, Mauritius led Sub-Saharan Africa in economic freedom and was ranked 12th worldwide. The report’s ranking of 183 countries is based on measures of economic openness, regulatory efficiency, rule of law, and competitiveness. For the third consecutive year, the World Bank’s 2011 Doing Business report ranked Mauritius first among African economies (20th worldwide, out of 183 economies in all) in terms of overall ease of doing business. The government’s objective is for Mauritius to rank among the top 10 most investment- and business-friendly locations in the world.

Mauritius has a long tradition of private entrepreneurship, which has led to a strong and dynamic private sector. Firms entering the market will find a robust legal and commercial infrastructure. Mauritius has a well-developed digital infrastructure with state-of-the-art telecommunications facilities including international leased lines and high-speed Internet access. Government policy is to act as a facilitator to business, leaving production to the private sector. However, it still controls key utility services--including electricity, water, waste water, postal services, and television broadcasting--directly or through parastatals. The government also controls, through the State Trading Corporation, the import of what it deems to be strategic products such as rice (only non-basmati or other non-luxury rice), wheat flour, petroleum products, and cement.

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