By Shruti Menon Seeboo
As Prime Minister, Dr. the Hon. Navinchandra Ramgoolam, GCSK, FRCP continued his speech on the Budget, he next spoke of “Embracing Change for a Dynamic and Innovative Financial Services and Banking Sector.” He detailed the government’s strategy for the financial services sector, which “focusses mainly on promoting higher value-added offerings and consolidating financial stability.” A significant step in this direction is the government’s intention to “request for the conduct of a Financial Sector Assessment Programme (FSAP) jointly by the IMF and the World Bank.” This comprehensive assessment will provide an in-depth analysis of the financial sector’s resilience and development needs.
In terms of capacity building, the government is “investing in a wide range of skills development including advanced AML/CFT training.” The Financial Services Commission (FSC) will also be deploying a unified e-licensing platform, which will be “integrated with the centralised KYC repository and ‘Known to the Commission’ features.”
Turning specifically to the banking sector, Prime Minister Ramgoolam outlined several policies to stimulate investment. Firstly, the Bank of Mauritius is set to launch “bullion banking as a major new activity that will stimulate investment, employment creation and economic growth.” Secondly, the government will “review the Bank of Mauritius Act and Banking Act to further increase its independence.” Thirdly, the Bank of Mauritius will “implement an effective resolution regime to ensure orderly resolution of a failed bank.”
Further legislative updates are also planned. Fourthly, a new Electronic Trade Documents Bill will be introduced to “give legal recognition to digital bills of exchange and trade instruments, enabling fully digital trade finance and reinforcing our status as a modern regional trade hub.” Fifthly, relevant legislations will be amended “to allow for documents using secured electronic signatures to be accepted for registration and transcription purposes.” Sixthly, the government is “streamlining licensing for wealth management and family offices to better serve high-net-worth clients and establish Mauritius as a key gateway for investment into Africa.”
Rebuilding Institutional Capacity for Investment Promotion and Facilitation
Recognising the importance of robust institutional support for economic growth, the Prime Minister stated, “While we work to expand opportunities for investment, we are also enhancing our institutional capacity for promotion and facilitation.”
A key part of this enhancement involves restructuring the Economic Development Board (EDB) “to better support our vision of Innovative Mauritius by streamlining processes, boosting transparency, and promoting investment in all sectors.” The EDB will also take the lead on the government’s “export-driven growth strategy” and will be responsible for promoting the “Innovative Mauritius” brand. To further boost investment, the EDB is “dedicating resources and efforts to improve the ease of doing business.”
The restructuring efforts will also extend to the Mauritius Tourism Promotion Authority. The State Investment Corporation (SIC) will be tasked with “re-engineer its portfolio and refocus its mission on Innovative Mauritius.”
In a move to attract more investment, the government is “introducing seven new investment incentive schemes tailored to the needs of specific strategic sectors while improving the existing schemes for more impact.”
Beyond direct investment facilitation, opportunities are being created for private sector involvement in public sector infrastructure. The government will “encourage private investment in renovating, maintaining, and managing key heritage sites, including theatres and museums through a new ‘Heritage Stewardship Scheme’.”
Updated Trade Strategies for an Innovative Mauritius
The Prime Minister then outlined the next crucial aspect of the new economic model, which “focuses on adjusting our trade policies to address increasing protectionism and shifting centres of economic influence.”
To achieve this, the government is “equipping our embassies to focus on economic and developmental diplomacy, tasking them with creating actionable trade and investment projects by leveraging economic cooperation agreements.”
Mauritius will also “optimise the benefits of the recently established strategic partnership framework between Mauritius and UK.” Furthermore, the government intends to “enhance our trade and investment relations with the EU member states while at the same time negotiating a mutually beneficial trade and investment agreement with the USA.”
Special efforts will be directed towards “maximising opportunities from the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with India, the Free Trade Agreement with China and the African Continental Free Trade Area (AfCFTA).” The Prime Minister also noted that the government is “adapting our Africa Partnership Strategy to our vision of Innovative Mauritius while honouring our commitment to the Africa 2063 project of the African Union.”
Smart Investment in Productive Infrastructure
Transitioning to the fifth pillar of the new economic model, Dr. Ramgoolam spoke of “making infrastructure development the gateway to new investment opportunities.” He addressed Madam Speaker directly, emphasising: “While we are stressing on fiscal consolidation to reconstruct our economy we cannot and will not do so at the expense of economic expansion and job creation.” He continued, “We are therefore investing in physical infrastructure with proven growth linkages, namely for land, sea and air transport. Such investments will mitigate the contractionary effects of fiscal consolidation.”
Investing to Protect Purchasing Power
The Prime Minister then presented “the next cornerstone of our New Economic Model and Innovative Mauritius vision,” which “focuses on protecting purchasing power of consumers, in particular those with modest income.”
Addressing Madam Speaker again, he highlighted “One legacy from the previous Government that is causing a social mayhem in our country is the struggle of many families to make ends meet.” He reminded the house, “We pledged to address this issue as a priority once we are in Government. We have redeemed that pledge bringing down the inflation rate to 2.6 percent as at April 2025. The Bank of Mauritius has also been able to stabilise the value of the rupee which reins in inflation.” He concluded this point by stating, “Today, we are doing more to combat inflation.”
Creating Proximity between Consumers and Producers
To further protect the purchasing power of the population, and as “promised in our Electoral Manifesto,” the government is establishing a Price Stabilisation Fund of Rs 10 billion, with an initial Rs 2 billion contribution in this budget. The State Trading Corporation will also “invest some Rs 1.5 billion in a modern centralised warehousing facility to foster more competition in the interest of consumers.”
In a direct measure to alleviate cost burdens, Prime Minister Ramgoolam announced, “I am removing VAT on some infant foods, canned vegetables and frozen packed vegetables.” Furthermore, legislation is being enacted “to protect consumers from unscrupulous practices, such as reducing product sizes while keeping prices unchanged or hoarding essential goods during crises to inflate prices.”
The Competition Commission of Mauritius will be “mandated to conduct sector-wide pricing and profitability audits, especially in essential goods to ensure that retail outlets are not overcharging customers.” The government will also “invest in an integrated Price Monitoring Information System (PMIS) to combat price collusion and provide maximum information to consumers so that they can make right choices.” Finally, a High-Level Steering Committee will be established “to accelerate the ‘Parallel Import’ framework. This will enable us to lower medicine prices while ensuring quality and effectiveness.”
