“I’ve been the minister of finance for the last two years and it’s been obvious to us that Africa is enjoying a huge transformation. The potential is huge for Africa and Mauritius is now ideally placed on the East coast of Africa to act as a meeting point between Asia and Africa,” Mauritius’s vice prime minister and minister of finance and economic development Xavier-Luc Duval told CNBC Africa on Thursday.
2012 saw the island come close to a near-record year in terms of foreign direct investment (FDI) and is expecting to make that record in 2013.
With a population of just over 1.3 million, Mauritius has been ranked 19th out of 185 countries in according to the World Bank’s Ease of Doing Business Index as of June 2012.
“The reforms that we have done for a few years now, we’ve jumped five places in the World Bank Ease of Doing Business Report, so we’re continuing on the reforms. Mauritius has just two main attributes, the beauty of the island and its human resources,” Duval explained.
“So we use these two things to our advantage and of course we need to adopt the right economic policies and the right governance so that we keep on attracting investors to our shores.”
While Mauritius expects its construction sector to contract by 8 per cent in 2013, its financial and insurance sector is anticipated to expand by 5.5 per cent in 2013.
Over the last 20 years the island has been a conduit for foreign investment into India, accounting for roughly 43 per cent of the billions of dollars that have gone into the Asian nation. Botswana, Rwanda, Seychelles and South Africa are however equally strong conduits and gateways to Africa that offers the island substantial competition.
“Competition is a good thing because there is a lot of investment to go around, and each country will have its own specificities but we believe that Mauritius is particularly well placed because of our tax structure, the stability, a large number of professionals, there are so many things going for us.”
Mauritius is currently working on maritime connectivity with various ports in the continent as well as improving air travel links.
More than 60 per cent of Mauritius’s foreign exchange comes from Europe, and while the island has been affected by the euro zone crisis, the island has responded by diversifying its tourism and exports sector. Hospitality accounts for 7.1 per cent of GDP and exports to Africa have grown by more than 50 per cent in the past three years.
“We have a huge diversified economy, we are a great trading nation. We can use this to be a catalyst for the development of Africa. This is a two-way process, we hope to learn a lot also in this venture.”