Contributed by Toukan Corporate Services, Mauritius
Mauritius, being strategically located between Asia and Africa, boasts itself as one of the continent’s most stable regulatory environment. The Mauritius Financial Centre has forged a reputation as a safe, trusted and competitive financial center, which has enabled it to position itself as the preferred jurisdiction for FDI flows to the continent, since the country can service both Francophone and Anglophone Africa.
Mauritius and Africa are long known for the ties they share, both politically and economically. Mauritius ranks first in Africa and twentieth worldwide for ease of doing business by the World Bank and has forged its way to Africa by being a member to two of the continent’s most important trade blocs within Africa, namely the Southern African Development Community SADC, including 16 African States and the Common Market for Eastern and Southern Africa (COMESA) including 21 member states. Through these memberships, many foreign entrepreneurs have set up in Mauritius to gain from trade advantages offered. For instance, the development of the Mauritius Freeport facilities has been broadly constructed on the benefits Mauritius’ membership to SADC and COMESA. It can be expected that the advantages of a much greater and merged free trade area covering the whole of Africa will be more easily available in jurisdictions like Mauritius that showcase a higher degree of ease-of-doing business.
Apart from SADC and COMESA, Mauritius is now part of the African Continental Free Trade Area (AFCFTA). Mauritius ratified the Agreement establishing the African Continental Free Trade Area (AfCFTA) on 30th September 2019 and submitted its instrument of ratification to the African Union Commission on 8th October 2019. Hence, the AFCFTA will enable Mauritian operators to have preferential market access opportunities in the Western, Northern and Central African regions and further provide an incentive for foreign investors to use Mauritius as a manufacturing hub to target the African market. With the AFCFTA in place, the latter will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than US$3.4 trillion. In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organization. Estimates from the Economic Commission for Africa (UNECA) suggest that the AfCFTA has the potential both to boost intra-African trade by 52.3 percent by eliminating import duties, and to double this trade if non-tariff barriers are also reduced.
Mauritius has been at the forefront of driving quality investments into Africa, and undoubtedly remains the investment hub of choice for investors moving into the continent. With 21 DTAAs and 23 IPPAs already in place with African states, Mauritius offers investors a reliable and conducive environment for doing business. As a member of regional economic blocs such as the Southern African Development Community and Common Market for Eastern and Southern Africa, and a member of the African Union, Mauritius plays an active role in enhancing and fostering diplomatic and economic cooperation between African countries. In its publication, The World in 2019, the Economist magazine suggests that the population of Africa will double to 2.5 billion by 2050 and it makes absolutely no doubt that financial services can help drive development in this promising continent.Dated: [bxcode.pagedata.date]