“Growth will come from structural reforms, diversification”: Rogers Group

Share

Twitter Facebook Linkedin Google Mail Print

Mauritius’ metamorphosis into Africa’s business champion has been marked by continuous economic diversification, solid democratic governance and a long-term vision for national prosperity, all very appealing to foreigners curious about a country that – while relatively unknown – is Africa’s clear business leader. Philippe Espitalier-Noël, CEO of Rogers Group, a Mauritius-based consultancy and investment firm, tells us more. 

How has Mauritius developed into Africa’s business hub in just 50 years?
Over the last 50 years, Mauritius’ economy has gone through major transformations with new sectors of activities emerging every decade, from sugar to textiles, tourism, financial services, manufacturing, ICT/BPO, seafood, real estate and energy.

The country started as a mono-crop sugar economy and post-independence was faced with a high unemployment rate and a GDP per capita of only $700. The tourism industry started in the late 1960s and did not take long to become a success welcoming some 100,000 tourists by the late 1970s. In the 1990s, the country further diversified its economic base with a new dimension brought to the financial services and freeport sectors. The offshore financial services sector took off in the 1990s leveraging from the Double Tax Avoidance Treaty, which Mauritius signed with India in 1983, making Mauritius the largest source of Foreign Direct Investment (FDI) in India and later turned it into an international finance hub. In the 2000s, Mauritius immersed itself in the Information and Communication Technology sector, (ICT), and leveraging on our bilingual capabilities went into Business Process Outsourcing (BPO).

How would you assess Mauritius’ economic performance at present?
Mauritius is today a well-diversified economy with good economic indicators and references, including economic growth averaging 3.8% over recent years; a GDP in 2017 of $13.5 billion, a Moody’s rating of BAA 1, as rating at 1st in Sub-Saharan Africa on World Bank’s Ease of Doing Business (25th in the World), 1st on Mo Ibrahim Index of African Governance 2017, just to name a few.

The government is currently investing in a number of public projects including improvement of road infrastructure, setting up of a light-rail transit public transport, extending and modernising port facilities, upgrading airport capacity, and improving water supply and power generation.

A number of structural reforms are also being implemented to ease the process of doing business, such as e-licencing, speeding up the process to start a new business, improving the processing and issue of construction permits and facilitating the process for property registration.

The private sector has always formed an integral part of the economic development of Mauritius, and in collaboration with the government has contributed to diversify the economic base by investing in new industries.

How competitive is Mauritius on the global and regional levels?
Mauritius’ key strength has been its political stability. This has helped the country to rank top in Sub-Saharan Africa on the World Bank’s Ease of Doing Business Report. With very limited natural resources like Singapore, Mauritius has been able to position itself as a world tourism destination and financial centre of excellence in the region. With over 30 years of experience in global business activities, the country has developed its human capital and value proposition to position as a business hub in Africa.

In addition, much effort is being done by the authorities and the private sector to establish Mauritius as a logistics and airport hub to further leverage on the growing Asia-Africa Growth Corridor. The island has exported its business model in several fields in Africa, like the sugarcane industry and the banking sector for instance, where it has developed significant structures and accompanied hundreds of companies facilitating FDI flows to the continent.

What challenges remain to transitioning Mauritius into a high-income economy in future?
Mauritius has today a well-diversified economic base from which to leverage for its future growth towards a high-income status economy. Major growth for the future is expected to come from structural reforms, diversification in new sectors and positioning on trade with Africa. A number of policy and structural reforms are being considered to improve productivity and to further ease the process of doing business. For example, we are now looking at digitalising the process for approval of permits, and e-licencing, to expedite the process to start a new business, improve the processing and issue of construction permits and facilitate the process for property registration.

One of our challenges is the continued diversification of existing sectors. The financial services and tourism sectors are expected to remain the main drivers of growth with further upside potential to be tapped from regional integration. In parallel, we need to re-invent existing sectors, such as the manufacturing sector, or the BPO sector which will have to move up the value chain by targeting high-end services such as cloud services, legal process and possibly medical outsourcing. The Government aims to turn Mauritius into a hub for international trade, and has identified a number of sectors such as agro-processing, jewellery, aquaculture and fish processing, amongst others, as potential export businesses. The ocean economy also remains an untapped growth sector with Mauritius having a total maritime zone of 2.3m square kilometres with an Exclusive Economic Zone of 1.9m square kilometres. Another interesting sector is the property market, where the Government has announced in 2015 a number of fiscal incentives to encourage the setting up of smart cities around the Island.

Another major challenges which the country will have to face in the coming decades however, is the change in demographics. Mauritius today has an ageing population and is projected to reduce over the next 50-100 years. To confront that Mauritius will have to adopt an openness approach in order to attract talents and high net worth individuals.

How is Mauritius developing the local workforce, while attracting international talent?
Mauritius is investing heavily into its educational system and is also encouraging foreign universities to set up in the country. With the provision of free education, the country has today a literacy rate of 93%. We have a competitive labour market and the growing GDP per capita encourages the local workforce to remain in the country.

Yet with a low birth rate and an ageing population there is increasing need to further open our job market to foreigners. Also, as we move up in the value-chain we will require more professionals with skills which we do not have in our workforce.

What kind of role do you see Mauritius play on the global level?
Mauritius has a unique ecosystem where cultural diversity, gender equality, inclusion and governance can be exemplified in a positive way. In spite of its small size and limited natural resources, Mauritius has been able to position itself on the international arena in a number of sectors, such as tourism, financial services where the country can play a bigger role in channelling funds from Europe and Asia to the African markets, transports, where it can benefit from its strategic location to act as an airport and port hub for facilitation of tourism, business and trade.

What has been Roger’s contribution and impact on Mauritius so far?
Rogers through its 119 years of existence has actively participated in the development of Mauritius through its positioning in the key sectors of the economy, namely tourism, aviation, logistics and property. Besides we are also engaged in a number of corporate social responsibilities as well as environmental sustainability.

The group was the co-founder of the national airline, Air Mauritius, and operates an aviation business, which provides airline representations, travel agencies and cargo handling facilities amongst other. In the tourism sector, Rogers including its associate company, New Mauritius Hotels, operates 15 hotels in Mauritius and holds a significant 20% share of the country’s total hotel room capacity. In the financial services sector, we were among the first to launch global business services and business process outsourcing in the 1990s, and today we are very active in FinTech, with consumer credit and payment solutions, and technology services. In the logistics field, we have more than 40 years of international presence and in-depth expertise and offer a complete range of solutions, from freight forwarding, warehousing, container handling, customs clearing to shipping services. In the Property market, we launched and listed in 2008 our property fund, Ascencia, which comprises today 6 malls covering a total of 122,000 square metres; and we own some 3,200 hectares of land in the South-West region of Mauritius engaged in sugar and other agricultural activities, hunting, leisure and property development.