A major new study launched today shines a light on the millions of jobs and multibillion dollar GDP created for mainland Africa due to Mauritius’ role as a leading International Financial Centre (IFC). The study argues that the Republic of Mauritius is poised to play a critical role in supporting Africa’s progress towards achieving the UN Sustainable Development Goals.
The new report ‘Facilitating Growth, Employment & Prosperity in Africa’ has been produced by Capital Economics for the Economic Development Board of Mauritius. The key findings of the report show that:
- 2 million jobs in mainland Africa are supported by foreign investment mediated by Mauritius. These mainland jobs represent more than three times the Mauritian population and 0.6 per cent of all employment in the continent with Kenya, Nigeria, Tanzania, South Africa and Côte d’Ivoire the biggest beneficiaries.
- While Mauritius accounts for just 0.1 per cent of Africa’s population, its economy contributes 0.6 per cent to the continent’s GDP.
- 9% of all Foreign Direct Investment (FDI) into mainland Africa is mediated by Mauritius. This represents some USD $82bn which in turn generate around USD $6bn of tax revenues for African governments each year.
- The Mauritian financial and professional services sector employed over 15,000 people and contributed over $1.5bn, or 12 per cent of GDP, to the Mauritian economy in 2019.
- Mauritius ranks ahead of Canada, Ireland and the United States in terms of commitment to international standards which aim to stamp out criminal activity such as money laundering and terrorist finance. Mauritius’ record on tax transparency outranks both the United States, and the United Kingdom.
The report finds that an additional $350bn of private foreign investment into Africa will be required annually by 2030 to meet the UN Sustainable Development Goals, mainly in the form of corporate lending, debt securities and institutional investment into African firms. The report underlines that Mauritius will play a critical role in helping to realize the increases to prosperity, employment opportunities and quality of life needed to meet those goals, particularly as the population of Africa is expected to almost double to 2.5bn by 2050.
Launching the report Dr. The Honourable Renganaden Padayachy, Minister of Finance, Economic Planning and Development, said: “This report highlights the key role of Mauritius in enabling and facilitating growth, employment and prosperity across the African content. It also reaffirms our future orientation as a financial centre of choice and repute. Our value as an investment, financial and business hub for the continent is substantial with 9% of overall FDI into Africa generated from Mauritius. We are, together, paving the way and contributing towards fulfilling our continent’s economic potential and helping it achieve the UN Sustainable Development Goals.”
The Honourable Mahen Kumar Seeruttun, Minister of Financial Services and Good Governance, said: “Mauritius is world-recognised as a hospitable, investor-friendly destination. A credible and secure financial centre of repute, synonymous to adherence with global standards on tax matters, regulatory practices and economic substance. The Report’s evidence-based, facts-driven analysis demonstrates that Mauritius has been a strong developmental ally for Africa, infusing powerful life force and helping millions out of poverty. I am profoundly optimistic that Mauritius will continue to play an important role in shaping the future and economic prosperity of Africa.”
The report finds that Mauritius supports other African countries to access the necessary capital to finance investment by reducing both the risks and costs associated with cross-border dealings. As an IFC of substance, Mauritius also benefits from being a stable democracy with a highly skilled workforce, strong legal, judicial, regulatory and governance frameworks, enabling significant levels of FDI that may otherwise be dissuaded due to concerns around stability, corruption or currency controls in developing countries.
African countries that receive the biggest jobs benefit from investment mediated by Mauritius include Kenya where 1.6m jobs are supported, Nigeria (470,000), Tanzania (250,000), South Africa (240,000), Côte d’Ivoire (200,000) and Cameroon, Ethiopia and Ghana (120,000 jobs each). On a share of total jobs basis Kenya is also in first place (4.4%) followed by Namibia (3.6% 40m jobs) and Botswana (1.8% 20m jobs). The 4.2m jobs supported create around $30bn in additional GDP spending power for people in mainland African economies.
The report also confirms previous OECD findings that Mauritius is a fully compliant tax jurisdiction in terms of best practice international standards, is as transparent on tax issues as France and is more compliant than both the United States and the United Kingdom. It found that Mauritius ranked in 1st place of all African countries in the World Bank Doing Business 2020 survey (13th out of 190 globally), the World Economic Forum Global Competitiveness Index 2019 (54 out of 140 globally), and the Mo Ibrahim Index of African Governance 2020.