Once considered one of the most impoverished countries in Africa upon gaining independence in 1968, the island, with a population of 1.3 million, emerged from a history of economic adversity to become one of the continent’s few remarkable success stories, establishing itself as one of Africa’s wealthiest nations.

Stroll through the vibrant streets of the capital Port-Louis in Mauritius and you may not immediately feel as though you are in a quintessential African city.  

The history is complex; marked by the legacy of colonisation, with its original population comprising enslaved individuals brought from Africa to toil in sugarcane fields, followed by a significant influx of indentured labourers from India. Mauritius has, over time, transformed into a captivating cultural mosaic.  

As of 2023, the Financial Services sector of Mauritius has become the primary driver of the economy, surpassing the manufacturing sector that had dominated in the 1980s, itself having displaced the agricultural sector, primarily focused on sugar production.   

With promising prospects for the African continent, Mauritius aspires to assume a significant role by connecting investors to the region. Its banks are busy pursuing opportunities, especially in East Africa, where State Commercial Bank bought Fidelity Bank in Kenya in 2016, and has been steadily building it up to become a top-tier bank.  

Unlocking growth 

On the margins of the Economic Development Board (EDB) African Partnership Conference, held in the InterContinental Hotel in Balaclava, EDB’s CEO Ken Poonoosamy told The Africa Report that his key aim was to boost trade across the continent.  

“We wanted to bring together political decision-makers, thought leaders, institutional investors, and various organisations actively shaping Africa’s economic strategy, including the African Continental Free Trade Area (AfCFTA) project,” says Poonoosamy, “to ask what are the tariff and non-tariff barriers that need to be reduced or eliminated to boost trade and investment within Africa.” 

Four years after the launch of AfCFTA, the question matters. World Bank chief economist for Africa Andrew Dabalen points to a failure to ignite regional tradeacross the continent, and says the supra-national bodies responsible will need to be beefed up… and given space.

“Countries will need to give up a little bit of sovereignty and empower regional organisations to enforce rules and safeguards that have already been agreed upon by regional communities for benefits to emerge across the board,” said Dabalen.

Wamkele Mene, Secretary General of the AfCFTA, says the goal remains unifying the continent’s trading scheme.  

“AfCFTA has the potential to drive inclusive investments in Africa by creating a single market for the transaction of goods, services and movement of capital,” says Mene. “Projections are very clear that AfCFTA can reduce the cost of trade across Africa and make it easier for our investors to invest on the basis of a full set of rules for trade”.  

Attract and protect investors

He recalled that the African Union Assembly of the Heads of State and Government adopted last February the Protocol on Investment to the Agreement Establishing the African Continental Free Trade Area (AfCFTA), a flagship project of Agenda 2063 of the African Union.

“This protocol is a significant tool to not only attract investors but to protect them on the basis of rules that have been negotiated by all heads of governments that ratified the treaty,” Mene said. 

During his stay in Mauritius, Mene held private discussions with officials of the government of Mauritius, notably the Finance Minister, Renganaden Padayachy, and the Minister of Financial Services, Mahen Seeruttun.   

Mauritius has for some time seen its future integration into the continent as a necessary part of its growth plan. 

Hemraj Ramnial, chairman of the EDB, says it has long recognised the significance of Africa as a vital partner. “We firmly believe by working together and synergising our efforts, we can unveil fresh avenues of prosperity for all our nations.” EDB Mauritius has identified key sectors where collaboration can yield substantial value:

• Agriculture
• Infrastructure development
• Renewable energy
• Tourism
• Financial services

The EDB also wants to position Mauritius as a preferred jurisdiction to facilitate cross-border investments and establish linkages with the continent.    

Consistent growth

The CEO of the Financial Services Commission (FSC), Dhanesswurnath Thakoor told The Africa Report that despite the challenges posed by the pandemic, Africa remains a region of consistent growth for the Mauritius International Financial Centre (IFC).   

“We are still witnessing a growing interest in routing investments through Mauritius into Africa. Notably, there has been a significant uptick in investments from India into Mauritius for African ventures, as well as investments from African entities utilising Mauritius as a gateway to India,” says Thakoor.

“Our strategically advantageous geographic location plays a pivotal role in fostering these dynamics. Furthermore, we have cemented our commitment to economic collaboration by signing free trade agreements with India, China, and, of course, our African partners.” 

Today, more than 450 private equity funds are domiciled in the Mauritius IFC and investing in the African continent. As of June 2021, nearly $40bn in investments directed to Africa were structured through Mauritius, according to the EDB.  

This protocol is a significant tool to not only attract investors but to protect them on the basis of rules that have been negotiated by all heads of governments that ratified the treaty.

According to data from the national statistical office, Mauritius recorded exports amounting to MUR11.2bn ($253.4m) to African nations during the first half of 2023, out of a total of MUR41.7bn. In the previous year, the country’s exports to Africa totaled MUR27.6bn, making up 33% of the overall exports.  

South Africa remains the primary African market for Mauritian exports, accounting for MUR4.3bn during the first six months of 2023 and MUR11.1bn in the preceding year.  

In terms of imports, Mauritius recorded a total of MUR17.3bn during the first semester of 2023, in contrast to the previous year’s figure of MUR39.6bn, representing 13.5% of the island’s total imports. South Africa continued to be the dominant source of imports, contributing a significant share of 66.8% to the island’s total imports from Africa in the previous year, amounting to MUR26.5bn and MUR9.7bn during the first half of 2023.