MAU­RI­TIUS’S Richard Arlove

The Mau­ri­tius-based busi­ness ad­viser works with clients from multi­na­tion­als to fam­ily-run firms to build ‘fi­nan­cial in­tegrity’ and nav­i­gate the chal­lenges of in­vest­ing on the con­ti­nent

The Africa Report - - CONTENTS - Ni­cholas Nor­brook

Gov­er­nance mat­ters

Mau­ri­tius has taken a rep­u­ta­tional beat­ing in re­cent years, but the gov­ern­ment is now mak­ing some strides in trans­parency and good gov­er­nance. Doc­u­ments leaked to the In­ter­na­tional Mon­e­tary Fund in 2014 re­vealed that di­a­mond wealth was si­phoned out of Zim­babwe and trans­ferred through Mau­ri­tius be­fore dis­ap­pear­ing into the end­less global maze of se­crecy ju­ris­dic­tions or tax havens. At the same time, the coun­try reg­u­larly got bad press as a re­sult of In­dian con­cerns that in­vestors were us­ing a dou­ble tax­a­tion avoid­ance agree­ment (DTAA) with Mau­ri­tius to by­pass pay­ing taxes in In­dia. In May 2016 In­dia and Mau­ri­tius signed a pro­to­col to end the DTAA, and Mau­ri­tius has worked to up its trans­parency game. Richard Arlove, who says the Mau­ri­tius-based busi­ness ser­vices com­pany he runs – ABAX – has been lob­by­ing for re­form, is “de­lighted that Mau­ri­tius has re­cently signed up to the Base Ero­sion and Profit Shift­ing agree­ment” as well as the Com­mon Reporting Stan­dard treaty and all the Euro­pean Union’s trans­parency leg­is­la­tion. “All th­ese com­pli­ance and reporting rules are im­por­tant if a fi­nan­cial cen­tre wants to be con­sid­ered as im­por­tant.” For Arlove, gov­er­nance mat­ters all the way down the chain, from fi­nan­cial cen­tre to small com­pa­nies. He ar­gues it will be key to the next big driver in African economies, the trans­for­ma­tion of the huge num­ber of fam­ily-owned en­ter­prises into en­ti­ties with more pro­duc­tive ca­pac­ity. In par­tic­u­lar, he points to the need to bridge a “gov­er­nance gap” – not reach­ing for a cousin to run a depart­ment or fac­tory, in­stead putting in place in­ter­nal con­trols and pro­fes­sional tal­ent.

IN­TEL­LEC­TUAL PROP­ERTY

ABAX helps clients man­age their in­vest­ments in Africa, with the added ben­e­fit of Mau­ri­tius’s hy­brid le­gal sys­tem that in­cor­po­rates both the Napoleonic code civil found in fran­co­phone African coun­tries and the com­mon law of­ten found in an­glo­phone ones. “We help bring fi­nan­cial in­tegrity to the com­pa­nies in which our clients in­vest,” says Arlove. “We can’t mit­i­gate all the risks, but we help with the ones that we can, like for­eign-ex­change risk.” He is also work­ing to help African in­no­va­tors pro­tect their in­tel­lec­tual prop­erty. “There are Africans who are in­vent­ing plenty of things: meth­ods for pay­ing for wa­ter, mo­bile bank­ing and so on. How do we struc­ture com­pa­nies to help the African en­trepreneur pro­tect his in­tel­lec­tual prop­erty? Of­ten en­trepreneurs don’t think about it,” says Arlove. “And how do you value it. If to­mor­row, he wants to exit the com­pany, can he take it with him? Or sell it?”

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