Unlocking Africa's potential: Mauritius as a gateway

21 May, 2024

Africa, Asia & Middle East Corporate

John Félicité, Business Development Director, dives into the fascinating story of Mauritius, an island nation often referred to as "Gateway to Africa". Mauritius' unique location and strategic advantages have made it a vital hub for trade, investment, and global connections. In this article John explores what makes Mauritius such a key player, bridging Africa, Asia, and the rest of the world. He'll delve into its rich history, strategic geography, impressive economic development, and the geopolitical factors that solidify its position as a gateway.

From uncharted island to thriving trade hub

Mauritius' story begins as an uncharted island, mapped by Arabs in the 1400s and visited in the 1500s by the Portuguese, then Dutch. Colonisation by the French and then British in the 1600s and 1700s respectively left a lasting mark, shaping its legal system, language, and cultural influences. Yet, despite these European ties, Mauritius developed a unique identity, a vibrant blend of African, Asian, and European influences.

This strategic location in the Indian Ocean wasn't lost on early explorers. Even before the Suez Canal transformed global trade routes, Mauritius thrived as a vital trading post. Ships relied on the island's deep natural harbour in Port Louis, making it a central player in connecting the economies of the Indian Ocean with the Atlantic world. Sugar production became the engine of the early Mauritian economy.

A journey of discovery & development

Since gaining independence in 1968, Mauritius has undergone a remarkable economic transformation. The island has shed its reliance on sugar production and embraced a strategy of diversification. Today, it boasts a thriving ecosystem of industries, including financial services, tourism, information technology, manufacturing, and healthcare to name a few.

A key driver of this growth has been the Mauritius International Financial Centre (MIFC). This journey of discovery and development has positioned Mauritius as a globally recognised and secure jurisdiction for conducting business across Africa and Asia.

Beyond its financial prowess, Mauritius offers a robust infrastructure and a highly skilled workforce. This combination creates an attractive environment for businesses seeking a strategic foothold in the region. Whether your goal is to leverage Mauritius as a platform for Foreign Direct Investment into Africa or establish a substantive operational base, the island offers immense potential. The growing interest in living and working in Mauritius underscores its appeal as a springboard for success across Africa.

Leveraging location & partnerships for growth

Mauritius has capitalised on its geographic position to forge strong trade ties with numerous African countries, facilitating investment and trade flows. Key to this success is a network of trade agreements, including AGOA with the USA, membership in the African Union (AU), and participation in trade blocs like AfCFTA (African Continental Free Trade Area), SADC (Southern African Development Community), COMESA (Common Market for Eastern and Southern Africa), and IOC (Indian Ocean Commission). This active participation allows Mauritius to champion economic integration and cooperation across Africa and the Indian Ocean, providing access to over 70% of the world’s population through trade agreements.

Beyond trade agreements, Mauritius serves as a diplomatic bridge between Africa and Asia, leveraging long-standing ties with India and China. Further solidifying its position as a launchpad, the oldest bank in the Southern Hemisphere, headquartered in Mauritius, is actively expanding into Africa. This trend extends beyond established institutions – a growing number of Mauritian-owned businesses are utilising the island's trade routes to enter the African market.

Africa: a frontier of opportunity with a young & growing population

As traditional markets grapple with trade tensions and security concerns, Africa emerges as a frontier brimming with potential. Mauritius, with its stable environment and strategic location, positions businesses for long-term growth and success in this dynamic landscape.

From a demographic perspective, Africa presents a compelling investment case. Ten of the world's youngest nations are located on the continent, and by 2050, it's estimated that 30% of the global under-25 population will be African. This youthful demographic represents a vast pool of future talent and consumers.

Education is undeniably the key to unlocking Africa's full potential. As technology adoption accelerates in education and the workforce, a wave of new jobs will be created – opportunities previously unimaginable.

Responsible growth in Africa

Mauritius' flexibility in structuring investment solutions makes it highly attractive for businesses seeking bespoke services. Transparency, high degree of governance and rule of law, coupled with no foreign exchange control and fiscal incentives, further sweetens the deal for a wide range of investors looking to expand into Africa.

Mauritius is further solidifying its credibility through the development of a new ESG framework. This framework aims to facilitate and encourage responsible investment practices, with robust measurement and reporting into Africa. This commitment, along with continued adherence to international best practices and governance, ensures Mauritius remains a top jurisdiction for Private Equity Funds and Venture Capital firms entering the continent. By prioritising responsible growth, Mauritius positions itself as a partner for sustainable development across Africa.