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March 2013: Tapping into new markets

Dear Friends,Ken En

First of all, on behalf of the Board Members of the Board of Investment, on behalf of the staff and in my own name, I wish to officially convey our sincere condolences to all the Mauritian families who have lost their loved ones in last weekend’s tragic event. Our sympathy goes to those who are grieving. BOI wholeheartedly joins in the national expression of solidarity through its contribution in the hope that it will help bring some comfort to all those who have deeply suffered at this particular time.

Now, on the business score, globalization has brought about interconnectedness among continents so much so that no country can extricate itself from the economic web. Events in one part send tremors to the most distant place from which they occur. Similarly, the closer we are to the epicenter of economic changes, the more directly we are affected.

Performance and perception concur to either indicate that business is on the downturn or that the business climate is improving and that the economy gives signs of rebirth. 

On this side of the web, the latest data and trends seem to point that we are on the threshold of new buoyancy.

Our most recent contacts in the markets indicate a real determination on the part of investors to use the Mauritian platform because of its stability and trustworthiness. The concept of the gateway to the African continent is blazing its way. Investors and financial institutions want to use our financial centre to penetrate that massive market to start or diversify their activities. This is in itself a confirmation of the pertinence of our Africa strategy.

In this context, BOI’s network of Investment Promotion and Protection Agreements with African States will take us a long way in the process of instilling confidence, be it for investment in the ICT, finances or agribusiness sector.

During our last forum in Cape Town where some hundred and sixty businessmen were present, every participant shared about his project or interest to do business in Mauritius. In one of the high-level meetings, the Western Cape Minister signified his willingness to start bilateral partnerships with Mauritius. The film industry may be the first area of cooperation.

On the domestic side, the MCCI Business Confidence Indicator for the first quarter of 2013 reveals a significant surge of 7.3% in overall business confidence compared to the third and fourth quarters of 2012. The survey dispels negative perceptions and apprehensions. It restores confidence. The business climate is improving. Investments should be increasing in various sectors of the economy, namely trade, manufacturing and services.

Furthermore, our analysis covering sub-Saharan Africa equally conveys great prospects. The rise in consumption due to the emergence of a middle class and the employability of a younger and more educated work force are among the prerequisites for massive investment in this region. The deindustrialization of the last decade can be turned around through the introduction of import substitution manufacturing, especially in the light manufacturing sector. The transformation of raw or semi-finished input into finished goods can happen in situ, thereby be carried out in a really competitive way. This will contribute to enhance the quality of life of some 600 million consumers.

Finally, the signing of protocols between China and African states regarding the provision of fundamental infrastructure can only pave the way for an exponential growth of activities.

China’s investments in Africa have been growing rapidly. FDI stocks have increased from USD 700 million in 2000 to USD 13 billion by the end of 2010 in diverse areas such as finance, mining, manufacturing, construction, agriculture, business and trade.

Mauritius is recognized as an ideal partner by many companies. During the last road show in Hong Kong, Shanghai and Beijing, significant interest has been expressed by Chinese financial institutions to use Mauritius as the Renminbi centre for Africa, with Chinese banks operating in the trade finance and investment space. Besides, firms involved in other fields have equally shown interest to set up their regional headquarters and treasury management activities in Mauritius.

Therefore, the Board of Investment is all the more determined to consolidate the Mauritian platform to connect the active players on this side of the web.

Ken Poonoosamy

Managing Director