Op-Ed: Tourism sector in Mauritius devastated by COVID-19

By Shani Smit – Economist

Travel bans and containment measures around the world are having a devastating effect on the tourism sector in Mauritius, which was already experiencing sluggish growth in 2019. According to Statistics Mauritius, the total number of tourists visiting the island’s shores declined by 1.1% in 2019, while gross tourism earnings fell by 1.5% to Rs63.1bn.

The tourism industry as a whole is an essential component of the Mauritian economy and is estimated to have accounted for 18.8% of GDP and 19.1% of total employment in 2019.

In the first four months of 2020, tourism arrivals dropped by 33.9% y-o-y. Meanwhile, tourism earnings, which are not updated as regularly as tourist arrivals, are estimated to have fallen by 3.8% y-o-y in the first two months of 2020.

The United Nation’s World Tourism Organisation (UNWTO) estimates that global travel could fall by 60% – 80% in 2020, which would suggest a drop of between 850 million and 1.1 billion in international tourists, the loss of $910bn – $1.2trn in export receipts from tourism, and as many as 120 million direct jobs in the tourism sector being at risk.

Prior to the pandemic, the government’s vision was to attain 1.6 million tourists by the end of 2020, to increase tourism earnings to the tune of Rs71bn and create 12,208 (compared to 41,792 jobs in 2017) additional direct jobs in the tourism sector.

Tourists visiting Mauritius are primarily European, accounting for about 60% of all tourists. European tourists are mainly French, British, and German, but the government has undertaken numerous initiatives to diversify its tourism market, with a particular focus on Asia, Oceania, and America.

While many countries have started to ease their lockdown measures, potential tourists will be anchored down by travel restrictions, tighter budgets, and health-related fears.

While the tourism sector has been the hardest hit, other economic sectors such as the textile, transportation, and manufacturing sectors are also facing the brunt of the economic slowdown.

As a result, unemployment figures have started to soar. According to the minister of finance, Mauritius could see unemployment increase by 150% to a total of 100,000 active non-employed workers; that is, 17.5% of the active population.

This would represent an increase of around 60,000 of unemployed persons across Mauritius, he said.

As part of the government’s fiscal support measures amid Covid-19, a wage support scheme and self-employed assistance scheme have been implemented.

The purpose of the two schemes is to cushion the socio-economic impact of Covid-19 by providing financial support to employees who have become unemployed on a temporary basis, as well as those who are employed in informal sectors or self-employed.

On April 17, the government extended the schemes until the end of April, allocating an additional Rs4.5bn in spending. Meanwhile, temporary amendments have been made to the Workers’ Rights Act and the Employment Relations Act under the Covid-19 Bill to protect the rights of workers and support businesses.

For more coverage on COVID-19 visit: https://www.cnbcafrica.com/covid-19/

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