The President of the Mauritius Chambers of Commerce and Industry (MCCI) spoke to AfricaMoney on the need to encourage private sector investment to reverse the trend of declining business confidence among Mauritian enterprises. Our financial expert cautioned against rising unemployment in view of plummeting business confidence in Mauritius.
- Any comments on how Mauritius can leverage its status as the gateway to Africa to its advantage?
Mauritius is in a unique position to tap African business opportunities. We have been at the forefront of exploring business opportunities in Africa for the past few decades and are one of the first few countries which have put in place bilateral treaties with many African countries with an aim of encouraging Mauritius to be a gateway to Africa. As the aim of the MCCI is to facilitate trade and improve the ease with which business can prosper across the region, it is important for us to bring barriers down – including movement of people across the African continent. In this context, the experience with Mauritius has been an eye-opener for other African nations. Our island nation has entered into Visa-Waiver Agreements with several countries in the region.
Most importantly, Mauritius is a part of Africa and we understand the African way of doing business. Some most important steps taken by Mauritius to facilitate business in Africa are (a) The Mauritius-Africa Fund, which was launched by the government earlier this year and is aimed at providing Equity Participation for business investing in the African continent, (b) the various bilateral Free Trade Agreements and Preferential Trade Agreements Mauritius has entered into with countries in Africa to facilitate the movement of goods and services across the continent and (c) the flat corporate tax rate in Mauritius which is an added incentive for companies to open offices in Mauritius, thus enabling our nation to become a hub for global businesses.
With the dip in the Business Confidence index by 2.7 points from the previous quarter to reach 85.3 points for the first quarter of 2014, how does the MCCI foresee industry prospects for 2014?
The Index has been on a declining trend for the past couple of years, with the exception of the last quarter of 2013. And, what is especially worrisome for us is that the index has been below 100 for the past couple of years. This is because of the steady decline in business confidence in the commercial world. The essence of the matter is that if people driving businesses do not have confidence in the economy, they will not invest in it. We need to encourage private sector investment and spur consumption. We must remember that the level of unemployment is likely to increase if businesses do not grow. Moreover, it’s not only the private sector investment which is getting dampened but public sector investment as well has reduced over the last two years.
- According to the MCCI business confidence report “the large majority of entrepreneurs indicated that they have continued their efforts to find new markets to continue to fuel their own expansion”. What are some of the new markets for Mauritian entrepreneurs?
Africa is most certainly a great market for Mauritius entrepreneurs to explore. As I mentioned earlier, the African initiative taken by the government in terms of the Mauritius-Africa fund is a golden opportunity for businesses in Mauritius to reach out to the continent. The recent mission to Gabon spearheaded by the finance minister himself, continuing collaboration with Seychelles and inroads into Congo Brazzaville, are just some instances of how Mauritius is getting it right in terms of its Africa strategy. Having said this, it is clear that we have been talking about Africa for quite some time, but not much has been achieved in terms of concrete developments.
- The report also indicated that lack of support from Government continues to hinder entrepreneurs. Any steps which have been taken to improve support to SMEs?
There are a slew of measures in Budget 2014 which are well intentioned, but we need to see this translate into concrete action. The government must ask itself certain critical questions: What is needed to empower SMEs to go to Africa? How can a big company be encouraged to invest in an African growth story? Our entrepreneurs, if they succeed on home ground, are clearly good at what they are doing, and should be able to replicate the success in Africa. But we know the conditions are different in Africa so the government must make it easy for SMEs by accompanying them in their initial inroads into Africa. For instance, SMEs in Mauritius are not aware of procedures for setting up a business in other African countries and this is where the government can step it. The government can smoothen the path for SMEs by taking up rules and regulations for establishment and operation of business firms in an inter-governmental forum. To illustrate, a large company from Mauritius went to Congo Brazzaville to set up business and found out the hard way how different the procedures were and how difficult it was to establish a foothold in another African economy, even though it had a huge presence in Mauritius. So, we can imagine how much harder it is for SME businesses to get even a toe-hold in Africa.
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