Mauritius proves to be the most competitive economy in Sub-Saharan Africa


 “It is good news that Mauritius has moved 9 places from 54 to 45 in our global competitive index ranking,” Raj Makoond, Director of the coordinating body of the Mauritius private sector, the Joint Economic Council, told CNBC Africa on Thursday.

Makoond stated that the island undertook significant macroeconomic and institutional reform measures to get to where they are today.

“If you look at Mauritius over the recent past, you would recognise that there were some major reforms in respect to the business environment, strengthening institutions, improving labour relations as well as the fiscal regime,” he said.


In comparison to South Africa, Mauritius was ranked higher as the current labour situation in South Africa has impacted the country’s performance immensely.  

According to the WEF cooperation in labour-employer relations index, South Africa is currently ranked last at 144 due to current labour disputes, especially in the mining industry while Mauritius is ranked 44.

The island’s labour environment, Makoond pointed out, has undergone major transformation after nearly 20 years of negotiations, which eventually led to the introduction of a workfare program to strengthen labour relations.

“The two things we wanted to reconcile was flexibility with some form of security whereby should there be some form of job layoffs, there would also be some form of compensation to the workers,” he explained.

The workfare program consists of all employers being levied around 1.5 per cent which goes towards the Transition Unemployment Benefit fund. This fund is then available to all workers whose employment contracts have been terminated by their employers for reasons of downsizing.

These workers are then compensated for up to 12 months which may also be used for training purposes.

“It is a trade-off between flexibility and increasing the contribution of the employers to give some comfort in case of a job loss, Makoond added.

Overall, he explained, Mauritius’ economy has diversified significantly over the past 40 years since their independence and no longer only comprises of sugar exportation and tourism.

 A number of new industries, such as manufacturing, financial services and Information and Communications Technology (ICT) have taken over and made huge contributions to the island’s Gross Domestic Product (GDP)

“Tourism today only represents less than 10 per cent of the GDP, sugar is less than 3 per cent. Manufacturing however now represents 20 per cent, financial services are at about 12 per cent and ICT is around 6.9 per cent of the total GDP,” said Makoond.

New frontiers are also currently being explored by the island, he pointed out, such as the development of an ocean economy.

“We are trying to develop our ocean economy component. There are about 5 areas we are looking at such as seafood processing, port related activities and deep water activities like deep sea mining,” Makoond concluded.