Mauritius, an island of over 1.2 million population situated in the Indian Ocean is developing as one of the emerging markets in the African region. The financial sector started to boom after considerable foreign direct investments from offshore companies and international banks which have successfully established themselves on the isle during the past years. The numerous foreign relationships that Mauritius shares at the international level have now become paramount for its growing economy. These international relations emerge from Mauritius’s rich heritage in terms of culture, diversity of ethnicities and professional skilled citizens. Mauritius has attracted many entities from mainly India and Africa due to its low tax liability. These companies have been operating profitably during the past decades creating more opportunities for the different sectors of the economy and its citizens.
Mauritius has developed from a low-income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist sectors. The first pillar of the Mauritian economy is the tourism industry which remains a significant source for its foreign revenues via spending on goods and services.
Many factors contribute to the rapid expansion of the Mauritian economy. On the far end of the spectrum it can be observed that the services industry form nearly to 73.2 % of the economy and agriculture and manufacturing contribute together to less than 30% of the economy.
The GDP growth of Mauritius has been growing steadily since the past four years and an average growth per year over the recent years was noted to be 3.2 %. The GDP growth accounts mainly from the agricultural, financial and services sectors. Alongside the tourism industry, the offshore companies and banks forming part of the financial sector of the island have contributed enormously to its goodwill at the international level. Sugarcane exportation was previously the first pillar of the Mauritian economy and most of its cultivation was for exportation to foreign countries. Nevertheless, after the price of sugar fell down and less profit were made on sugar exportation and as a result the tourism industry became the main economic activity of the country. Trade and the manufacturing sectors form less than 40% of the economic activities of Mauritius although many European brands such as Mango, Etam and much more are manufactured locally at low labor costs. The textile industry has expanded under Africa Growth and Opportunity Act which brings much profitability for the players in this field. The Foreign Direct Investments (FDI) which plays a large role in the economic health of Mauritius comprises mainly of the services sector (financial and non-financial services), fuel, telecommunications, cement and electrical equipments.
Mauritius is world renowned for its beaches, reefs and lagoons. Since decades tourists from all over the world have been visiting this small nation and contributing largely in its steady and sustainable growth. As the literacy rate increased over the years and the Information Technology sector has been highly structured more jobs have become accessible for the inhabitants. Consequently, Mauritius has since become a very attractive destination for Foreign Direct Investments due to its tax-haven benefits, skilled labor force and much-improved infrastructure. Today Mauritius is considered to be politically, economically and financial stable country in other words referred to a tiny island with a booming economy. However, in the long run will Mauritius continue to be an attractive destination for investors and provide them low tax and cuts when various countries in Africa such as Kenya, Ghana, Mozambique and Botswana are also coming out as gigantic emerging markets?
Chancery Group Emerging Market Africa Global Finance Magazine Financial Times