The Mauritius capital Port Louis: concern that too much FDI is concentrated in real estate. (Photo/Ashok Prabhakaran/Flickr)
The African Development Bank ranks Mauritius the most competitive economy in sub-Saharan Africa
MAURITIUS’S government expects foreign direct investment to increase as much as 46% this year, even as the United Kingdom’s decision to leave the European Union may curb inflows to the Indian Ocean island nation.
Foreign investors are expected to commit 14 billion rupees ($395 million) by the end of 2016, compared with 9.6 billion rupees last year, Board of Investment Chief Executive Officer Ken Poonoosamy said in a phone interview Tuesday from the capital, Port Louis. The country received 3 billion rupees in the first quarter, Bank of Mauritius data shows. FDI slumped last year from 18.5 billion rupees in 2014, when the $12 billion economy saw several hotel acquisition deals, according to the BoI.
“With uncertainties like Brexit, we need to be very cautious in terms of figures,” Poonoosamy said. The board has some visibility “on projects that have been already been secured,” he said, without elaborating.
The U.K. is the third-biggest source of FDI flows into Mauritius, accounting for about 9% of the total, according to a U.S. State Department report. The country is the easiest place in Africa to do business, according to the World Bank, while the African Development Bank ranks it as the most competitive economy in sub-Saharan Africa. The sugar- and textile-exporting nation is targeting becoming a high-income country, which is defined as an economy with a gross national income per capita above $12,735, by 2025. It’s currently $700, according to the World Bank.
Real estate attracts the largest share of FDI in Mauritius, with 80% of the amount received in the first quarter of this year invested in the sector. In 2015, 84% was plowed into similar projects. The Integrated Resort Scheme and Residential Estate Scheme introduced in 2002 facilitates the acquisition of resort and residential property by non-citizens on the island. International buyers can become Mauritian residents once they acquire a luxury property with a minimum investment of $500,000.
The government has introduced a Property Development Scheme that expects future developments to contribute social amenities and facilities that benefit the community.
“We are aware of the concentration of FDI in real estate and the BoI is doing everything possible to make sure there is diversification and that we attract investment in other sectors, mainly in manufacturing,” Poonoosamy said, adding that there are several plans by investors to build factories.