Mauritius’ national investment promotion agency is following up on and assisting projects with a total investment pipeline of more than MUR200bn ($4.5bn), he tells The Africa Report.
In the wake of the Covid-19 outbreak, 2022 was the first year in which the Mauritian economy operated without constraints, with borders fully open. “In 2021, while still bearing the fallout of the pandemic, FDI inflows in Mauritius amounted to roughly MUR15.4bn ($370m),” says Poonoosamy.
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“We expect to be on par with the pre-pandemic levels where we attracted more than MUR20bn ($580m), for three years consecutively. At that time, FDI represented some 4% of GDP for the year 2021, similar to the 2022 projection.”
Real estate reigns supreme
More than 50% of the $565m received in 2022 stemmed from investment in the real estate sector, which was fueled by the implementation of several components of the smart cities being built across the island.
“The real estate sector is the forebearer of FDI in Mauritius. A significant number of legislative changes, investment schemes, policy changes and incentives were implemented over several years to drive the evolution of the real estate sector and its associated sectors, notably construction. The real estate sector contributed to about 6.2% of the national output in 2021,” says Poonoosamy.
For five years, before 2020, Mauritius registered an annual FDI in real estate activities averaging MUR10.6bn per annum. It reached MUR16bn ($450m) in 2019, proof of the increasing appeal of the Mauritian destination and opportunities to foreign investors, says the CEO.
“Notwithstanding the outbreak of pandemic and subsequent border closures, FDI in 2020 and 2021 averaged MUR8.8bn ($200m), which is in line with the previous years’ average inflow,” Poonoosamy says.
The major engines of growth and development as well as investment are currently the smart cities located across the island. “These cities are large scale hubs, as opposed to being perceived as ‘residential estates’. Hubs for investment in modern and sustainable infrastructure and utility services,” he says.
“Hubs for smart housing, green buildings, energy efficient technology and integrated waste management. Hubs for a greener environment, less pollution, eco-friendly activities and resilient water management. Hubs for people to work, live and play within a sustainable lifestyle.”
Foreigners more and more contemplate retiring or even settling in Mauritius in the longer term owing to the exclusive lifestyle
The luxury residential real estate segment also witnessed an increasing demand from foreign buyers over the years. Blessed with sunshine all year round, and a turquoise blue coastline spreading over hundreds of kilometres and with the advent of a liberal property market, including freehold ownership by non-citizens in dedicated schemes, Mauritius has gained rising popularity internationally.
“Residential real estate is one of the most preferred investment assets of ultra-high net worth individuals and investors. The luxury residential real estate segment has seen an increasing demand from foreign buyers over the years. Foreigners more and more contemplate retiring or even settling in Mauritius in the longer term owing to the exclusive lifestyle and the stability of our environment and jurisdiction,” says Poonoosamy.
Optimism over 2023
Despite global uncertainties and the lingering effect of Covid-19, the CEO of the EDB expects the positive incidence of 2022 to carry over into 2023. In addition to ongoing projects, major investment projects are expected to begin this year.
“The EDB is following up and facilitating several projects having a pipeline of investment of more than MUR200bn ($4.5bn) spread over several years. We expect an FDI exceeding MUR25bn ($565m) for 2023,” says Poonoosamy.
The hospitality sector is expected to pick up in 2023, with projects that were previously on hold due to the pandemic, he adds. Mauritius welcomed nearly 1 million tourists in 2022. “We can expect a better performance this year,” says the CEO. In January 2023, the ministry of tourism in Mauritius had forecasted 1.4 million visitors for the year.
Poonoosamy says the major focus now is on innovation and the promotion of new sectors. “Mauritius is actively encouraging foreign investors to explore the thriving business environment and the plethora of opportunities to set up their businesses in Mauritius as the country is moving up the value chain in well-established sectors while tapping into opportunities in the services and new sectors.”
After Covid-19 and its impact on the global economy, Mauritius is gradually re-positioning itself as a strategic hub in the region by promoting sustainability and digital technology. “Through this strategy, we are banking notably on the manufacturing, ICT, energy, healthcare sectors and the silver economy segment to generate substantial FDI over the coming years,” says Poonoosamy.
He explains that the manufacturing industry, which has always been the backbone of the Mauritian economy, is now going through the next phase of its evolution by embracing technology and turning to high value-added manufacturing activities and products. “These include smart manufacturing, robotics, artificial intelligence, virtual simulation, 3D printing, automation and intelligent factories,” he says.
In the ICT sector, high-end activities such as software development and animation, big data analytics, disaster recovery, and cloud computing are being actively promoted.
The healthcare sector has metamorphosed itself into an integrated cluster underpinned by high-value activities such as hi-tech medicine, medical tourism, medical education and wellness, underlines Poonoosamy.
“The combination of state-of-the-art medical services coupled with well-trained and qualified medical practitioners across various specialties have contributed to the sector’s development. Over the years, the number of private institutions has doubled, and future projections indicate that the sector is expected to substantially contribute to GDP,” he says.
The authorities also want to reinforce the positioning of Mauritius as a hub for foreign retirees, with a view of making the silver economy segment a prime economic pillar.
“The plan is to attract 50,000 non-citizens retirees in Mauritius by the end of the year. For this goal to be reached, it implies developing a services-related industry for the elderly, which will include economic activities such as healthcare, finance, transport, housing, education and employment,” says Poonoosamy.
Mauritius is also seeking eco-conscious foreign investment to meet the target to achieve 60% of its energy requirement generation through renewable sources by 2030, from 21.5% in 2021.
The EDB is facilitating a host of renewable energy sources projects which are likely to carry out their investment during this year, ensuring a substantial influx of FDI in the energy sector, explains the CEO.
“FDI in the energy sector has been on an upward trend since the last five years and amounts to more than MUR500m ($15m) boosted by the various incentives provided by government like the solar energy investment allowance, exempt tax on interest derived from investment in green projects and various custom duties and VAT tax holidays on photovoltaic products,” says Poonoosamy.
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