Build­ing a two-way street

Busi­nesses want ac­cess to the big­ger mar­kets on the con­ti­nent, and a num­ber of eco­nomic play­ers say Mau­ri­tius needs to open up to African im­mi­gra­tion

The Africa Report - - COUNTRY FOCUS - Ni­cholas Nor­brook in Port-louis

On a Fri­day af­ter­noon a civil ser­vant hur­riedly talks into his phone, mak­ing the fin­ish­ing touches to a frame­work agree­ment on a new ‘tech­nol­ogy park’. It is a le­gal doc­u­ment that will chan­nel Mau­ri­tian in­vest­ment into a spe­cial eco­nomic zone (SEZ) out­side of the Ghana­ian cap­i­tal, Ac­cra. The fol­low­ing week, the agree­ment will be ap­proved by the Ghana­ian par­lia­ment, hence the pres­sure to fin­ish. Yash Man­ick, the chief ex­ec­u­tive of the Mau­ri­tius Africa Fund, says he should have moved of­fices to Ebene, the new busi­ness head­quar­ters of the is­land, but for the mo­ment is still in down­town PortLouis. “I don’t mind!”, says Man­ick. “It gives me ac­cess to the un­lim­ited pow­ers of the gov­ern­ment when I need to get things like this done in a hurry.” The Mau­ri­tius Africa Fund will be fa­mil­iar to stu­dents of re­cent Asian eco­nomic devel­op­ment: a quasi-gov­ern­men­tal agency, run as a public com­pany to stream­line de­ci­sion-mak­ing, but whose goal is eco­nomic-na­tion­al­ist in scope. While ini­tially it was set up to take small eq­uity po­si­tions in Mau­ri­tian com­pa­nies that are in­vest­ing in Africa, that quickly be­came tough to man­age. The new di­rec­tion is to first get gov­ern­ment-to-gov­ern­ment sup­port and then build SEZS into which Mau­ri­tian and other com­pa­nies can set­tle. For now, there are zones planned in Sene­gal, Ghana, Côte d’ivoire and Mada­gas­car. Sene­gal’s first phase, in the new city of Di­amnia­dio, is com­plete, with 13ha to be rented out. “The de­mand we have been get­ting far out­strips sup­ply,” as­sures Man­ick. “This is some­thing that we have done be­fore. We know how to in­dus­tri­alise and cre­ate spe­cial zones.” The logic to push Mau­ri­tian com­pa­nies into Africa seems clear. When faced by a de­clin­ing pop­u­la­tion and a do­mes­tic mar­ket un­able to keep pace with the am­bi­tions and cap­i­tal stock of its largest con­glom­er­ates, you need to seek a hin­ter­land. When you add a global push to reg­u­late off­shore fi­nance hubs, you cre­ate the cur­rent cli­mate in Mau­ri­tius: a search for a toe­hold in Africa across the board.

MIT­I­GAT­ING RISKS

In the world of fi­nance, this push to greater so­phis­ti­ca­tion is al­ready hap­pen­ing, says Rama Sitha­nen, a former min­is­ter of fi­nance who i s now c ha i r man of IFS, a trust and fund a dmin­is­tra­tor re c e nt l y bought by the Jersey-based Sanne Group. “It’s a work in progress, to be fair,” he says, “it’s sig­nif­i­cantly bet­ter than when we started 25 years ago.” That sets up Mau­ri­tius, Sitha­nen ar­gues, to act as a hub for in­vestors who want to take ad­van­tage of the con­ti­nent’s growth op­por­tu­ni­ties but who are wary of get­ting money stuck in un­sta­ble coun­tries. “In­vest­ing di­rectly in places like In­dia and Africa is no fun. Peo­ple re­alise that,” says Sitha­nen, who also acts as chair­man of the Rwanda Devel­op­ment Board. “You need to iden­tify and price the risk”. For San­jiv Bhasin, the CEO of Afra­sia bank, “the abil­ity to set up spe­cial pur­pose ve­hicules in Mau­ri­tius helps in man­ag­ing that risk”. Banks like the State Bank of Mau­ri­tius say they like the fact that the Mau­ri­tian gov­ern­ment is giv­ing them back-up at the na­tional level – again, a kind of eco­nomic diplo­macy that suc­cess­ful Asian de­vel­op­ing economies are good at. Re­la­tions with African coun­tries work in other ways too, and South Africa is an ob­vi­ous tar­get for some projects. Mont Choisy is a prop­erty com­pany of­fer­ing a new devel­op­ment around Grand Baie in the north of the coun­try – a Mau­ri­tian res­i­dency per­mit is in­cluded in the price of the apart­ment, which is at­trac­tive to some South Africans. “They make up about 40% of the new devel­op­ment,” says Jy­oti Jee­tun, the chief ex­ec­u­tive of Mont Choisy. But while Africa is the watch­word for the gov­ern­ment, some say the is­land needs to think se­ri­ously about im­mi­gra­tion, from Africa and else­where. Arnaud Lagesse of the is­land’s largest con­glom­er­ate, IBL, says: “Look at the de­mo­graph­ics. We need to start think­ing about se­lec­tive im­mi­gra­tion, at the very least.” Open­ing up the res­i­dency laws would be one op­tion, ar­gues Jee­tun, who is also an ar­dent pro­moter of the need to think about im­mi­gra­tion dif­fer­ently. “Right now it is a ta­boo sub­ject,” she says, “but Mau­ri­tius is too small. We want to be Singapore and Dubai. But we don’t want to open the doors like they have.”

$9.7m The Mau­ri­tius Africa Fund’s con­tri­bu­tion to the con­struc­tion of the Di­amnia­dio spe­cial eco­nomic zone

Sene­gal’s Pres­i­dent Macky Sall pre­pares for busi­ness at the Di­amnia­dio spe­cial eco­nomic zone

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