Recovery, Resurgence, and Resilience
The outbreak of the Coronavirus (COVID-19) pandemic has been very difficult time for many businesses, including those across the African continent. The pandemic has largely affected the political and economic stability of the Mauritian economy. Companies and people around the globe have been facing several significant challenges to which they needed to respond rapidly. One of the most crucial challenges which has been faced by every organization around the globe is how to deal with the “new normal’’.
Mauritius, being a popular tourist destination had to implement strict control measures on the arrival of overseas travelers with Covid-19 infection. As per the Oxford Covid-19 Government Response Stringency Index, Mauritius has scored a very high mark as having one the world’s best responses on tackling the pandemic. This is due to the prompt and consistent strategies which was put in place at the right time. The strategies include the WHO protocols (physical distancing, use of face mask and hand sanitizers), strict quarantine measures and testing protocols. Mauritius hotels have been transformed into quarantine centers for visitors arriving from high-risk countries. Temperature checks were introduced at the airport for all the passengers. As the cases in Mauritius has started to escalate, curfew was imposed and borders were closed, and eventually a complete lockdown was implemented.
Another key success factor in the fight against the pandemic of COVID-19 lies in clear, transparent, and consistent communication. Mauritius and its citizens stood firm against the fight of the pandemic. Work access permit were delivered to the frontliners. Health services were fully functional including hotline telephone service to answer public queries. During the lockdown, the National Communication Committee held press briefing to provide more details on the different response measures and to answer questions raised by the general public and to reassure the population. Domiciliary visits consultations were provided to those who needed basic treatment. Several media platforms were created: a website, http://www.COVID-19.mu; a Facebook page ‘Coronavirus Moris’ and the beSafeMoris mobile application were launched to allow the Mauritian population to obtain real-time information about health and safety measures and vaccination programs.
Vaccination campaign was also introduced with the first bath of Oxford-AstraZeneca vaccine which was donated by the government of India. China has also donated Sinopharm vaccines to the Mauritian population. With these facilities, Mauritius was able to get vaccinated. With most of the local population and foreigners having achieve immunity, Mauritius was able to open borders to vaccinated tourists without going through a mandatory quarantine.
With the full reopening of our borders to the world, in October 2021, the Mauritian nation will once again demonstrate its resilience. To further redress the damages caused by the pandemic to the economy, the authorities are working together with the private sector to ensure that sustainable recovery from the pandemic and long-term economic transformation. Various measures have been adopted to restore investor confidence and attract entrepreneurs with innovations. These include institutional reforms, premium investor certificate, Fintech innovation and consolidation of strategic ties with India.
The Bank of Mauritius has set up the Mauritius Investment Corporation Ltd in June 2020 in view to ensure an orderly and balanced economic development of the country as well as safeguard the stability and soundness of the financial system.
The MIC was helpful in providing financial assistance to companies affected by the covid-19 pandemic. The MIC has approved up to 34 applications under both the Equity Participation Portfolio for Covid-19 impacted companies and Future Generations Portfolio. Support and Assistance was provided to the largest hotel groups which was largely impacted by the pandemic such as Sun Limited and Lux Island Resorts Ltd. In so doing, these groups have been enabled to meet their financial commitments and safeguard jobs in the short term. With the re-opening of our borders, the conditions of the hospitality sector will now be improved which will eventually act as a major driver for the recovery of the Mauritian economy as a whole.
Economic Boost Through Technological Breakthrough
The Financial Services Commission of Mauritius (FSC) has issued the Financial Services (Peer to Peer Lending) Rules 2020 (the P2P Lending Rules) with the objective of fostering innovation and furthering access to finance in Mauritius. Start-ups and small entrepreneurs have typically relied on bank finance to thrive. But they present risks that banks are not always prepared to take, at least not cheaply.
In issuing the P2P Rules, the FSC explained that the objective of those P2P Rules was to “establish a sound and conducive automated environment or platform for the offer and execution of alternative peer to peer lending, other than bank lending, for the benefits of borrowers and stakeholders in the non-banking sector of Mauritius”. This follows the government’s vision to position Mauritius as a fintech hub. growth and secure basic necessities
- Support for economic development of Mauritius
- Securing and enhancing financial wealth for current and future Mauritian generations
Security Token Offerings
As part of its Core strategy, the FSC is aiming at creation of a FinTech Innovation Hub, and piloting of a Central Bank Digital Currency by the Bank of Mauritius, together with a new framework for virtual assets.
The publication of a Guidance Note on Security Tokens Offerings (STO) and Security Tokens Trading Systems in June 2020 is another steppingstone in building an open and transparent regulatory regime for Fintech in Mauritius. There is a growing interest for these specific licenses. We are expecting to receive several applications in the upcoming months.
Mauritius will allow security token trading platforms to apply for a FSC license. This will enable companies to legally issue a token offering for STOs as well as operate a trading house for such digitised securities in the jurisdictions under a strong and well-regulated environment.
Connecting Africa and Asia
This is likely the most promising area for Mauritius, given its geographical location and numerous bilateral and multilateral agreements in place. Recently, two major trade agreements were signed or came into force, both with China and India.
China is just as large in terms of population and represents over USD 15 trillion of GDP. Thanks to the Mauritius-China Free Trade Agreement, we now have duty-free access on 8,547 products representing 96% of Chinese tariff lines. Mauritius can, therefore, gradually increase its exports to China. It is the declared intention of China to develop bilateral trade with Mauritius but more importantly, to use Mauritius as a platform for investing and trading with Africa.
The terms of the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) guarantee preferential access to the Indian market for a list of 615 Mauritian products, and the Indian side will have the same advantages for 310 products.
The CECPA is the first agreement of its kind to be signed with an African country and is a big step forward. In addition to products, the agreement also covers trade in services and investment. Not to be forgotten is the financial services sector.
Sphere is a licensed management company by the financial services commission (FSC) in Mauritius. We offer innovation solutions to international businesses, entrepreneur, fund operators as well as private clients. Sphere can help you to set up, structure and administer your company in Mauritius.