Mauritius has a deal with a Chinese firm to develop a $113 million fishing port and is working with investors on plans to to become a maritime hub for Africa as part of its bid to accelerate growth, the island nation’s finance minister Seetanah Lutchmeenaraidoo, said recently. Mauritius has revised down growth forecasts for 2015 from 4.1% to 3.6%, a level which was not enough to meet a target of lifting the Indian Ocean country from its middle income status. Mauritius aims for 5.7% growth in fiscal 2016/2017 and rising to 8% “within the next five years”, he said.
He also said private investment had to drive the expansion as there was no room for the government to borrow, given a commitment to cut public debt to 50% of gross domestic product (GDP) by 2018. It stood at 56% in June. To deliver that, Mauritius was attracting new investors in shipping and other maritime projects to make the Indian Ocean island a hub for Africa, adding impetus to an economy that now relies on sugar cane farming, tourism and financial services.
“We cannot borrow or give a sovereign guarantee,” he stated, adding reducing debt levels needed “huge growth”.
Mauritius has a deal with a Chinese firm to start building a fishing port in 2016 on a build-operate-transfer (BOT) basis. Such deals usually leave a project in private hands for 20 or more years before it is transferred back to the state. The minister said the term of this plan had yet to be finalized. The quay and related facilities, worth 4 billion rupees ($113 million), would handle up to 20 vessels at a time on completion in 2018. A Mauritian official said the developer was China’s LHF Marine Development Ltd.
Lutchmeenaraidoo said Mauritius had received applications to establish a shipping fuel bunkering facility, including from Horizon Energy Group from the United Arab Emirates. Dubai-based DP World, one of the world’s biggest port operators, submitted a business plan in November to run a trade transshipment port to serve Africa. A memorandum of understanding (MoU) was expected to be signed in January.
“We are moving out from being a small port in the Indian Ocean to become the most important maritime hub in this region,” Lutchmeenaraidoo said, and projects would follow the BOT principle.
In a further Africa initiative, he stated a Mauritius-based “special purpose vehicle” (SPV) was being set up to channel investment into projects in Ghana, such as sugar cane production involving Mauritius firm Omnicane, a poultry project and technology park. Projects using this vehicle would enjoy benefits such as exemptions from value added tax (VAT) and customs duties, he said, adding Barclays was assisting with the plan. He said the plan went beyond the “purely fiscal” double taxation avoidance agreements Mauritius has with African states.
“This special purpose vehicle will be duplicated in other countries,” Lutchmeenaraidoo said, citing interest from Ivory Coast, Senegal, Zambia, Uganda and Mozambique.
($1 = 36.00 Mauritius rupees)