In the Indian Ocean, Mauritius is at a crossroads of marine routes between Africa, Asia and Europe. It has been under the French then the English rule before gaining independence in 1968. Since then, Mauritius developed a liberal economy framework, in favour of foreign investments and international business. Many regulations (Export Processing Zone, offshore activities, Freeport,… ) ensure companies and foreign capital to work under very interesting fiscal conditions.
The Republic of Mauritius has 1.1 million inhabitants for an area of 1 860 km². The majority is made up of Indian descends and accounts for 70% of the population, 27% are Creoles, the remaining 3 % are Franco-Mauritian or Sino-Mauritian. The official language – and that of business matters – is English, but French continues to be commonly spoken. De facto, the people speaks both languages.
Considering its original development and its economic indicators, it is difficult to categorise Mauritius as part of either Africa or Asia. With an income per inhabitant around 3 400 USD per year, it is considered as an intermediate income country. During the last fifteen years, the country experienced a sustainable growth, with an average rate of 5% per year. Inflation is more or less under control, with a consumer price increase of 7.9% in 1996 and the unemployment rate – 5.5% - remain manageable. Economic performances are significant and generally much better compared to that of African countries. On the whole, the standard of living is higher than that of its African neighbours.
The Mauritian Economy relies on four main sectors. On the industrial level, sugar (7.7% of GDP, in 1996, 12% of employment) and textile ensure the greatest part of exports. In the services industry, tourism and financial activities are the source of most of foreign currency reserves. Consequently to the steady growth, domestic consumption increased regularly since 1990. Private consumption, which accounts for 64% of GDP, grew by 5% in 1995. The improvement of retail facilities, a reduction in import duties and the increase in disposable income have all contributed to that new tendency. Meanwhile, public consumption (13% of GDP) increased by 5.5%. (remaining GDP components are gross fixed capital and investments for 32%, imports for 68% and exports for 59%).
Concerning international exchanges, Mauritius recently modified its customs tariff and reduced the number of rates from 60 to 8.The maximum level of taxation lowered from 250% to 80%. Excise duties are levied, in addition to customs duties, on motor vehicles, petroleum, alcohol, cigarettes and furniture. There is also a sales tax of 8% calculated on CIF price of imports. The sales tax should be replaced soon by a VAT, also amounting to 8%. The VAT regulation is currently being considered, it should be implemented by the 1st of September 1998. There are two customs tariff schedules. Mauritius trade partners benefit from a preferential tariff: for duties exceeding 55% imports duties will be reduced by 20%. Among those countries, there are the members of the European Union, the Commonwealth, Eastern European Countries, the United-States, India and English speaking African countries. On the other hand, the non-preferential rates still apply for some countries, such as Switzerland, China, Japan, Taiwan or South Korea.
Regarding customs procedures, an import licence is required for foodstuffs, pharmaceuticals, cigarettes, insecticides, petroleum products, cement, PVC pipes, plastic feeding bottles, corrugated iron sheets, gold, weighing machinery, baking equipment, syringes, electric water heaters, motor vehicles (including spare parts and accessories), crash helmets and fireworks.
Importation of animals, animal feed, plants and seeds must satisfy phytosanitary conditions and are subject to quarantine regulation.
An export licence is required for sugar, tea, fruit and vegetables, meat, fish, pharmaceuticals, textiles, gold, live animals, corals and shells.
As for importation sector, some markets are very promising:
On the industrial level:
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Telecommunications and broadcasting equipment: telecommunication market reached USD 53 millions in 1996 and is estimated up to USD 100 millions for 1997. The market growth should exceed 50% each year for the several years to come. More particularly, the development of wireless telecommunications and the infrastructure and equipment needed for extending the telecommunication network should give rise to very interesting opportunities for foreign firms operating in this sector. | |
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Computer hardware and software: the use of computers is spreading rapidly and demand is growing fast, either for hardware or software, or even consulting services. To date, hardware accounts for 75% of the market, but the market is shifting toward software and services. The whole market is estimated at USD 48 millions in 1997. | |
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Textile industry machinery and raw materials: this market is shifting toward medium / high quality range of products, forcing the producers to modernise their equipment (for sewing, knitting, spinning, cutting, washing and dying purposes). Concurrently, Mauritius imports most of its raw materials, either natural fibres or synthetic fibres. The whole market is estimated at USD 485 millions for 1997. | |
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Sugar industry machinery and equipment: this sector embarked on a modernisation process to improve productivity. It implies the renewal of existing equipment and the mechanisation of some to replace the manual labour. Demand should remain strong for years to come. More particularly, interesting opportunities exist for irrigation matters. The whole market is estimated at USD 33 millions for 1997. | |
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Printing Machinery and supplies: this sector is expected to boom through exports for the coming years, therefore, the demand is strong for equipment. The whole market is estimated at USD 30 millions for 1997. | |
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Pharmaceuticals and medical equipment and supplies: the government has recently planned to expand health care facilities during the next 10 years. On the other hand, most pharmaceuticals are imported. The whole market is estimated at USD 42 millions for 1997. |
Concerning agricultural product:
Wheat and flour: this sector includes supply required for flour milling and bakery activities. Wheat imports are estimated to 140 000 tons for 1997.
Vegetable oils: in 1996, Mauritius imported crude vegetable oils in bulk for 26 000 tons, representing USD 16 millions. 90% of those imports are soya bean oil. Meanwhile, 500 tons of pre-packaged, refined oil are imported each year.
With respect to future development, one should note the modernisation of the airport, sewage treatment and the increase in project financed through BOT (Build – Operate – Transfer: these projects return to the government at the end of the concession period) or BOO (Build – Operate – Own: the project remain the property of the company) programmes, taking advantage of the regulation recently adopted regarding this matter.