With a resilient economy comprising diverse economic sectors that are driving growth and development, there’s much more to Mauritius than its coral reefs, tranquil lagoons and white coral-sand beaches. Tropical paradise aside, Mauritius serves as a natural bridge between Asia and Africa due to its position in the middle of the Indian Ocean.

The island, often dubbed the ‘star of the Indian Ocean’ for its strategic geographical position, witnessed successive colonial rule by the Dutch (1638–1710), the French (1710–1810), and the UK (1810–1968).

Following the abolition of slavery in 1835, a labour shortage spurred the UK administration to undertake the ‘great experiment’, facilitating the migration of ‘indentured’ labourers from India to British colonies to sustain various plantation economies globally. This saw the beginning of an influx of Indian migrants to Mauritius. By the time of independence in 1968, individuals of Indian descent accounted for two-thirds of the Mauritian population.

Since independence, Mauritius has undergone a significant economic transformation, shifting from a mono-crop economy to becoming a hub for upscale manufacturing and a service-oriented economy, particularly centred on international financial services.

Regional co-operation and integration have long been at the forefront of Mauritius’ development strategy, given its geographical positioning and distance from key trading partners. As a member of the AU and several sub-regional organisations, such as the SADC, COMESA, the Indian Ocean Commission and the Indian Ocean Rim Association, Mauritius actively engages in various collaborative endeavours, particularly in trade, industry, finance and investment. Key focus areas include food security, environmental preservation, agriculture and labour relations.

Mauritius’ Africa Strategy aims to position the island as a gateway for foreign investors seeking opportunities in Africa. Recent efforts have seen Mauritius leading the development of special economic zones in countries such as Côte d’Ivoire, Senegal, Ghana, Kenya, Mozambique and Madagascar. Through entities such as the Economic Development Board and the Mauritius Africa Fund, these zones attract investment across diverse sectors including ICT, financial services, manufacturing and tourism.

Mauritius also supports the rehabilitation and management of sugar production in several African nations.

Mauritius shares close ties with India. In 2015, India unveiled its Security and Growth for All in the Region (SAGAR) vision, which aims to bolster the nation’s maritime capabilities and enhance its presence in the Indian Ocean region. This has led to enhanced co-operation between Mauritius and India, so much so that the latter jointly inaugurated what is set to be an Indian naval base on Agaléga. This Mauritian sovereign territory comprises two islands situated around 1 050 km to the north of Mauritius, spanning a combined area of 26 km2 and inhabited by around 300 people.

Mauritius has pursued a foreign policy centred on fostering positive relations with major global players across economic, political and cultural domains. In a bid to bolster its economic competitiveness, it has also expanded its engagement through regional and multilateral economic co-operation, trade agreements and market access initiatives, with a predominant focus on India, China and the EU.

These underscore the prioritisation of economic interests in Mauritius’ development agenda. Recent agreements include free-trade deals with China and India, capitalising on historical, diplomatic and cultural ties to bolster exchanges. Both China and India have contributed significantly to infrastructure projects in Mauritius, financing endeavours such as airports, housing and transportation systems. These agreements facilitate preferential trade access, fostering increased commerce between Mauritius and these economic powerhouses while enabling technical co-operation to enhance expertise.

In 2022, for instance, India launched a series of projects in Mauritius based on what Indian PM Narendra Modi described as ‘the needs and priorities of our partners’ that ‘respects their sovereignty’, as reported by the Economic Times. ‘Mauritius is integral to our approach to the Indian Ocean. India will always continue to stand by Mauritius in its development journey.’ The projects included India-assisted social housing units, the Civil Service College and solar PV farms.

In addition, an agreement was signed for a US$190 million line of credit to Mauritius for the Metro Express project and other infrastructure initiatives; as well as an MoU to oversee the implementation of small development projects. ‘India and Mauritius are united by history, ancestry, culture, language and the shared waters of the Indian Ocean,’ according to Modi.

The financial services sector stands as a cornerstone of Mauritius’ economy, playing a pivotal role in driving growth, fostering economic stability and promoting international competitiveness. Over the years, Mauritius has emerged as a leading financial hub in the region, leveraging its strategic location, favourable regulatory environment and robust infrastructure to attract investments and facilitate global trade and commerce.

For instance, in late 2019 the Mauritian Parliament passed the Virtual Asset and Initial Token Offering Services Act, in a move to strengthen the development of key sectors and encourage innovation in fintech and regulatory tech.

‘The comprehensive legislative framework introduced by the Government of Mauritius demonstrates its commitment to providing new ways to access financial services and enhance financial services offerings in the country,’ says Gilles Athaw, partner at law firm Bowmans. ‘It will certainly attract new investors and encourage those already operating in the country, thereby reinforcing the role of Mauritius as an investment hub for Africa. The country has clearly embarked on a mission to gradually shift from its traditional financial system towards enhancing its fintech industry.’

A key pillar of Mauritius’ financial services sector is its offshore banking industry, which provides a wide range of banking services to both domestic and international clients. With a well-established banking system characterised by stability, confidentiality and efficiency, Mauritius has become a preferred destination for offshore banking activities, serving as a gateway for investment flows into Africa and beyond.

‘Mauritius offers a competitive tax environment for offshore companies – between 3% to 15% for offshore companies generally – making it an attractive destination for those looking to optimise their tax obligations,’ according to StraFin Corporate Services.

‘Additionally, Mauritius has signed many double taxation treaties with other countries, further reducing double taxation for those doing business internationally.’

In addition to offshore banking, Mauritius has developed a thriving global business sector, offering a range of corporate services including company formation, fund administration and wealth management. The country’s conducive regulatory framework, coupled with its network of double taxation treaties and investment promotion agreements, has attracted multinational corporations and high net-worth individuals seeking to establish a presence in the region.

Mauritius is the top-ranking sub-Saharan African nation on the World Bank’s Ease of Doing Business Index. It’s placed at 13th globally, ahead of Rwanda (38), Kenya (56), South Africa (84) and Zambia (85).

‘Amid a fast-changing global landscape, Mauritius has consistently transformed its business environment and improved its ease of doing business ranking over recent years,’ according to PwC.

‘This consolidates the country’s ongoing efforts to make Mauritius the leader in business facilitation in Africa and to be among the most business-friendly countries in the world, along with other jurisdictions such as New Zealand, Singapore, Hong Kong, the US, UK and so on.’

The financial services sector plays a crucial role in supporting the growth of other key sectors of the Mauritian economy. So too does its ICT sector, which has also experienced rapid growth in recent years, driven by government initiatives to promote digitalisation and innovation. Its Digital Mauritius 2030 Vision outlines a roadmap aimed at transitioning the country towards a technologically advanced society, enhancing the digital economy and expanding public service delivery. Mauritius plans to position itself as a leading ICT hub in Africa, leveraging its strategic location and connectivity.

Textile and apparel manufacturing have long been integral to Mauritius’ economic development. Trading Economics reports that GDP from manufacturing in Mauritius stood at MUR23 492 million in Q4/2023. The country has established itself as a competitive player in the global textile market, offering high-quality products at competitive prices. The textile industry has played a crucial role in providing employment and fostering industrialisation in Mauritius.

One of the key goals outlined in Mauritius’ June 2023 Budget was to transition the island nation into a manufacturing and services hub. To achieve this, numerous measures have been introduced, including the enhancement of the current legal framework to establish Mauritius as a gateway to the African market.

Tourism is another key sector for the island nation. In 2002, the government of Mauritius established the Mauritius Tourism Promotion Authority, primarily tasked with promoting the sustainable growth and development of the tourism sector.

As felt across the world, the pandemic took a heavy toll on the Mauritian tourism industry. However, the government has numerous schemes and incentives in place, tailored to stimulate investment in the sector. These measures seek to elevate the country’s appeal as a tourist destination, foster the growth of top-notch tourism infrastructure and spur employment opportunities.

Among these initiatives are the VAT Refund Scheme for Meetings, Incentives, Conventions and Exhibitions (to attract the business and entertainment events industry); the Property Development Scheme (which promotes the development of luxury residential properties available for sale to both citizens and non-citizens); and the Smart City Scheme, introduced in 2015. The Smart City Scheme is a property-development initiative that blends office, residential, commercial, educational and medical facilities alongside leisure amenities. ‘It is worth noting that non-citizens can now participate in the purchase of residential units such as townhouses, villas, apartments, penthouses or duplexes in smart cities,’ according to the UN World Tourism Organisation. ‘However, approval from the EDB [Economic Development Board] must be obtained before the purchase is completed.’

Embracing the ‘work, live, and play’ ethos, these expansive mixed-use developments in vibrant urban centres offer ample space and diverse opportunities for innovation-driven businesses, alongside a range of recreational amenities. So far, at least 15 smart city projects have been given the go-ahead by the EDB.

From tourism and financial services to ICT and manufacturing, Mauritius has embraced innovation and entrepreneurship to position itself as a regional economic powerhouse. As the country continues to diversify its economy and attract investment, it remains poised for sustainable growth and prosperity in the years to come.

Images: iStock