Posted on Thursday, 25 June 2015 15:44

Mauritius: We can emerge as a regional hub

By Crystal Orderson in Port Louis

Seetanah Lutchmeenaraidoo Finance minister of Mauritius. Photo©All Rights ReservedEradicating corruption, promoting new sources of growth and shifting investment focus from asia to africa are among the challenges ahead.

An old hand at the finance ministry, Seetanah Lutchmeenaraidoo helped to re-engineer the island's economy in the 1980s.

He has faced many obstacles since returning as finance minister in December 2014: from a sluggish growth rate to a bank scandal that threatens Mauritius's role as a financial hub.

Back in Business

24 May 1944 - Born in Mauritius

1973-1980 - Economist in the commerce ministry.

1983-1991 - Finance minister

1991 Launched investment adviser career

1998-2001 - Chairman of State Bank of Mauritius

December 2014 - Elected to parliament, finance minister

Meanwhile, the government's promise to spread wealth more equally – raising hopes of greater social spending – is a challenge that has stretched many a finance minister in lean times.

More money pumped into urban development projects might go some of the distance – and the government hopes that a re-energised economy will provide the jobs to do the rest.

One sector attracting renewed attention is the marineeconomy,including new fishing ports.

The Africa Report: The regulator revoked the licence of British American Investment's (BAI) Bramer Bank in April. Prime Minister Jugnauth said there is evidence of a Ponzi scheme. Are you worried this is impacting on Mauritius's standing?

Seetanah Lutchmeenaraidoo: There's a process of cleansing and all that is happening has to come out. We were given a broom to clean by the people, and we are cleaning house now. All that was illegal and immoral is coming out too. As stated by the prime minister, the banking issue and the BAI collapse have caused a shock to the population.

But the good news is this is part of the cleansing process. The intense cleansing also shows all the shortcomings we might have. And no, it is not threatening the banking industry of the country.

You plan to revive the local economy with massive investment in the local port and the so-called 'ocean economy'.

You can't become a competitive country if your infrastructure is weak or if you're not going to cope with international arrivals. What we need at least is a port and and an airport that is at our beck and call for local and international investors.

We are investing not only in the extension of the port but in the development of a port that is compatible with our ambition in the region. The port will become a key contributor to the development of the ocean economy. And over the next five years, there will be unprecedented high investment in the port infrastructure.

We have a multi-billion-rupee project on the cards which includes two fishing ports. We are also in negotiations with foreign investors for the port and the infrastructure investment. The port project will connect all the ports in the region and would enable thousands of vessels to drop anchor in our harbour while supplying a wider variety of port and maritime services.

The master plan is focused on making the Port Louis harbour a hub for bunkering, seafood, cruises and petroleum. This project has the potential to make a double-digit contribution to the gross domestic product.

So the number one infrastructure plan is the port and also the airways. We are opening our skies so that new airlines can come and service the country and the region with more regular flights. I have no doubt that we will have more regular flights to and from other African countries and we will become the regional hub for air transport.

You want Mauritius to achieve higher growth, especially for small and medium-sized enterprises (SMEs). What are your ideas for the sector?

We are a multiracial, multi-lingual country. We come from Europe, Asia and Africa. This has given us a melting pot of cultures. This is probably the magic we have and that Mauritius offers. We have a population that can deal with challenges, overcome them and then progress.

The future will be challenging because the world economy has changed. Our traditional sectors are achieving low growth and low investment, and we need to think outside of the box.

One sector we are focusing on is the SME sector. We are proposing a one-stop-shop approach to SMEs. We are launching the SME bank, which is an expression of trust and faith in the youth of this country. We are going to lend them money for projects without taking any guarantee or any security.

An amount of R10bn ($289m) will be made available to the bank over the next five years. And the one-stop shop will provide all the support, financing and information to entrepreneurs.

Explain the 'Smart Cities' concept, which is seen as a plan to revolutionise the way Mauritians live, work and play.

We have eight major projects, and we have nearly finished with the specific planning and preparation of the Smart Cities concept. The implementation is starting now.

The eight smart cities are substantial areas of development that will provide state-of-the-art connectivity, provide modern transportation and generate their own resources in terms of water and energy.

The areas are located in the south, northern, centre, north-east and west of the island.

With the shift away from channelling investment to Asia, what are your plans for increasing investment on the African continent?

This is probably not the easiest task. It is much easier for us to deal with Europe than to deal with Africa because of our colonial past. But nothing is being left unturned to open up to the region.

We are in fact a member of the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa, and the African Union, so we are fully integrated with Africa at the level of international organisations and regional ones. This is our commitment to the continent.

We have some experience with local economic zones. We are working very closely with some African countries to help them with the establishment of economic zones. Discussions are far advanced with Senegal, Ghana and Madagascar. Those are three countries where we expect important cooperation to take place.

The future is challenging, but I am convinced that we can emerge as a regional hub.

How do you intend to boost economic ties with the SADC region?

One big ambition for us is that Mauritius becomes a focal point in the region. We are not in competition with any other destination – not South Africa. It's just that we want to become a regional focal point.

But how do we achieve it? By opening up the economy and by mounting our resources and being a stepping stone for business in Asia to Africa [...].

Our ambition there is to be a regional hub for business and using Mauritius as a stepping stone for our international investors to Africa. And we are committed to serving the continent. We all want a prosperous region and Africa.

Are you happy to be back as finance minister?

This is a very hot seat, but this is a mission. It's quite a tough one, but I am ready for it.●

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