Mauritius has had low but steady growth rates over the last few years (averaging 3.8% during 2015–19) and is among the most dynamic economies in Sub-Saharan Africa. Nevertheless, the COVID-19-induced crisis took a severe toll on the Mauritian economy: although the country did not record many cases, the GDP plummeted by an estimated 15.8% in 2020, mostly due to the international travel restrictions which prompted a collapse in tourism arrivals (the sector represents one-fifth of the island’s GDP). The economy is expected to rebound in 2021 (+6.6%), fuelled by the construction sector and public investment, as well as by a recovery in the tourism industry, albeit most travel restrictions were extended in early 2021. The IMF forecasts Mauritius’ growth to stabilize around 5.2% in 2022.

The country had been progressively reducing its debt-to-GDP ratio in recent years; nevertheless, the trend reversed in 2019 (82.8%) and was exacerbated by the COVID-19 crisis (87.8% in 2020). However, such debt is almost exclusively denominated in local currency and three-quarters of it is domestic. The IMF forecasts the ratio to remain stable over the forecast horizon. In recent years, the public wage bill has been on the rise, and a more generous universal pension scheme has been introduced; however, a better tax collection has helped rising revenues and thus offsetting spending. Once again, though, the global crisis caused a contraction in revenues, which coupled with increased public expense to cope with the effects of the pandemic resulted in a deficit of -10.2% in 2020 (from 2.2% one year earlier). Most of the measures have been extended into 2021 and will keep weighing on public finances. Meanwhile, soaring food prices contributed to the acceleration of inflation (2.5%, was 0.5% in 2019), which should follow an upward trend in the forecasted period (2.6% this year and 3.9% in 2022 – IMF). Overall, the country’s economy is driven by the services sector, which accounts for around 67.7% of GDP, with tourism (catering, accommodation, leisure, etc.) and financial services being the most vital sectors for the economy. The country’s economy is diversified and also relies on its offshore financial activity, textile industry and production of sugarcane. Medical tourism, outsourcing, new technologies and the luxury industries are among developing sectors. Overall, the industrial sector accounts for almost one-fifth of GDP, while the agricultural sector contributes around 3% (World Bank). Mauritius enjoys political stability, with the government currently in the hands of the centre-left Morisien Alliance led by Prime Minister Pravind Jugnauth.

The island of Mauritius has made substantial progress in its campaign for social equality and poverty reduction, and represents an exemplary model of development. The island is classified as an upper-middle-income country by the World Bank, with a high Human Development Index, and is seeking to become a high-income country within the next decade. According to the IMF, GDP per capita (PPP) reached almost USD 24,000 in 2019 (latest data available), the second-highest in Africa after the Seychelles. The IMF expects the unemployment trend to be heavily affected by the negative economic impact of the COVID-19 pandemic, the rate being estimated at 10.9% in 2020 (from 6.7% one year earlier, mostly due to large redundancy in the tourism sector), before decreasing to around 9.2% in 2022. Female labour participation is significantly low compared to male labour participation and youth unemployment stands around 25%.

The island nation of Mauritius is in the southwestern part of Indian Ocean, and its main island is located some 1,200 miles to the Southeastern coast of the continent of Africa. The largest city in the island nation of Mauritius is Port Louis, which is also the country’s capital city. Mauritius gained its independence in 1968, and its main economic activity has historically been agriculture. Since independence, Mauritius has managed to transition into a middle-income country. The country’s economy has growing financial, industrial, tourism, and IT industries. The economy of Mauritius grows at a rate of 4% annually, which is comparable to other sub-Saharan African nations.

Agriculture

About 40% of Mauritius’ land area is used for agriculture and out of this 90% is covered by sugarcane which is by far the most important agricultural crop in the country, and accounts for about 25% of all export earnings. The remaining part of arable land is for other crops such as tobacco, tea, and other food crops. In 2010, the government, in collaboration with the European Union, promised to invest €13 million to enhance competitiveness in the sugar industry. In the same year, Mauritius produced 430,000 tons of sugar, which was an increase of 0.6% from the previous year. Mauritius relies on imports of 70% of the country’s food requirement and is therefore vulnerable to rising prices of food items in the international market.

Mauritius was severely affected by the 2008 crisis of global food prices, and since that time the government has been trying to improve the agricultural sector to boost food production in an attempt to achieve self-sufficiency in food. There has been a reasonable level of success in that direction because currently, the country is self-sufficient in fresh vegetable needs and 60% self-sufficient in potato needs. Fruit production in the country, which are primarily made up of mangoes, litchi, pineapple, and bananas meet only about 50% of the country’s needs.

Tourism

Tourism in Mauritius is the 4th most vital industry in the economy, and the country has all along been a popular tourist destination. Mauritius experiences the tropical climate and has clear warm seawater, beautiful tropical plants and animals, beautiful beaches, and a multicultural ethnic population, which has been attracting tourists. The government estimated that by the end of 2019 tourist arrival in Mauritius should be approximately 1.5 million visitors, which will be at 3.6% increase from the 2018 tourist arrivals. Other significant tourist attraction sites in Mauritius include two of the UNESCO’s World Heritage sites of Le Morne cultural landscape and the Aapravasi Ghat.

Mining

Mining in Mauritius is a relatively small industry, and there are no commercial mining of precious stones or coal; however, quarrying is widely carried out in the country, and in 2007 it accounted for only 0.1% of the GDP. Mauritius does not play a significant role in the world regarding consumption or the production of minerals. By 2006 the country was producing basalt mainly for construction, lime from coral, fertilizers, semi-manufactured Steel, and salt from solar evaporated seawater. Quarrying of sand is carried out along the coastal areas and within the lagoons as well as the coral rocks; however coral rock quarrying was banned from 2001 as a result of environmental damage and destruction of marine ecosystems.

Manufacturing

The manufacturing industry in Mauritius has experienced tremendous growth, and the country’s economy has grown because of the manufacturing sector particularly with the adoption of the EPZs, which have attracted numerous companies from different countries seeking locations with cheaper cost of production. The huge unemployment which has reduced in Mauritius in the past 20 years is attributed primarily to the growth of EPZs. These export processing zones (EPZs) offer duty-free on imports, subsidized rates on electricity, lower tax rates, favorable transport costs, access to credit, institutional support facilities, and other utilities. 

NAMRATA