The Government of Mauritius has been trying to turn the country into an International Financial Centre (IFC) of choice in Africa. IFCs are defined as locations with a collection of financial services providers and facilities. They involve a substantial amount of international activity. Mauritius is home to a lot of foreign businesses. It is considered as a location of excellence in the African continent.
The Mauritius International Financial Centre (IFC) is an essential part of the Mauritian economy. It contributes almost US$1 billion to GDP (8% of total) and US$180 million in tax revenues (8% of total). The IFC is currently based on three pillars. These are
- Cross-border investment: This is its core area of specialisation. It involves the facilitation of cross-border investments and related fund administration activities. These operations make up 60% of the IFC’s economic value add and approximately 88% of IFC tax revenues.
- Cross-border corporate banking: includes deposits from investment vehicles and accrued revenue from re-investment of these deposits. It accounts for 32% of the IFC’s economic value add.
- Private banking and wealth management: Local and regional banks report high growth in these operations for foreign customers. This is being driven by the divestment of African high net worth individual (HNWI) portfolios by European banks.
The Mauritian Government has the vision to double the size of its financial sector by 2030 and the IFC is aiming to grow its contribution to GDP, in real terms, to US$1.9 billion. This will increase tax revenue to US$0.3 billion in real terms and will lead to the creation of more jobs. These macro-economic ambitions is dependent on further training of Mauritians in the financial services industry and on an expat talent pool that would help develop the domestic financial and nonfinancial sectors.
The Mauritius IFC is currently very successful. Its status can be assessed by five competitiveness factors that the Financial Centre Futures Programme use to compile the Global Financial Centres Index (GFCI). These are
- Business environments: Mauritius is one of the most stable and attractive locations for doing business in Africa. This is because of its stable political and economic regime, tax attractiveness, internationally compliant and enabling regulatory framework, robust legal and judicial framework, and foreign currency availability with free capital flows.
- Human capital: Investors in Mauritius can benefit from a highly literate, low-cost and multi-lingual workforce. Moreover, relevant firms are currently focussed on attracting expatriate professionals, developing local talent in the relevant skills, and retaining skilled and experienced staff.
- Infrastructure: Some examples of excellent commercial property hubs in Mauritius are Port-Louis and Ebene. Many international financial services and IFC-relevant firms are based in these locations.
- Financial sector development: Mauritius is an investment grade jurisdiction having two strong local and three international banks that account for the whole market. Moreover, the Mauritius Stock Exchange is technically advanced and innovative.
- Reputation and other: The country has made considerable improvements with regards to transparency compliance with the highest international standards and attractiveness as a jurisdiction with deep specialisation in certain financial services.