Can AI Become the Next Pillar of the Mauritian Economy? Balancing the 2026 Budget Ambitions with Global Reality

By Dr Suraj Juddoo | Senior Lecturer in Computing,Middlesex University Mauritius.

Following the landmark Budget Speech 2026/2027 and the launch of the National AI Strategy, Mauritius is sprinting toward a digital future. However, an underlying global “AI gap” warns of a steep uphill battle. While several stakeholders are claiming that AI could be a new economic pillar for Mauritius, it is worthwhile to take an evidence-based approach based on international studies linking AI and economic growth.

In his recent June 2026 Budget Speech, Prime Minister and Minister of Finance Dr. Navinchandra Ramgoolam boldly positioned “Leveraging AI and Digitisation” as the first foundational pillar of Mauritius’s economic strategy for the 2026/2027 fiscal year. This economic pivot follows hot on the heels of the April 2026 launch of the island’s National Artificial Intelligence (AI) Strategy and FAIR Guidelines. With ambitious targets to transition Mauritius into a high-tech regional innovation hub, the question echoing is
no longer if AI will transform the country, but whether it has the structural framework to become a true, self-sustaining pillar of the economy.

The Cold Reality of the Global AI Divide

While local optimism runs high, a sobering reality check comes from the InternationalMonetary Fund (IMF) Working Paper, The Global Impact of AI: Mind the Gap. The IMF analysis warns that AI adoption is deeply uneven across the globe, dictated heavily by a country’s sectoral exposure, institutional preparedness, and hardware access. The report’s economic models demonstrate that AI-driven productivity gains could expand global GDP by up to 4% over the next decade. However, it warns that advanced economies are positioned to capture up to twice the income gains of lower-income nations, severely threatening to worsen cross-country income inequality. According to
this IMF paper, Mauritius is categorised as a low-income country (LIC) and assumptions are made relative to access and exposure of LICs to AI, which can be quite country-specific.

Furthermore, the IMF introduces a mechanism akin to an “inverse Balassa-Samuelson effect.” It notes that massive AI-driven productivity gains in advanced economies’ non- tradable sectors (like healthcare and education) will lower the relative prices of their non-tradable services, triggering a real depreciation of their currencies. For a small island developing state like Mauritius, navigating these macro shifts means that simply adopting technology will not be enough; the nation must engineer deep-rooted local resilience.

Strengths: Mauritius’s Competitive Edge in the AI Race

Despite the structural headwinds outlined by global institutions, Mauritius enters this technological shift with unique domestic advantages.

• Aggressive Human Capital Deployment: Acknowledging that a skilled workforce underpins AI preparedness, the government has earmarked Rs 25 million for a National AI Learning Platform. Over the next year, the state aims to train or enable a massive 50,000 Mauritians in practical AI skills. This includes training around 8,000 secondary school teachers with personalized AI teaching tools and supporting 12,000 Grade 9 students under scaled-up AI-enabled learning initiatives. The determining factor would be impact of these trainings; how far it would allow the teachers to actually improve their teaching and learning activities through AI? How proficient would the students become to be able to develop new AI solutions in the future?
• Fiscal Incentives and Global Infrastructure: To spur private sector
  transformation, the 2026 budget extends investment tax credits directly to AI
  solutions and patents.Undoubtedly, this is a highly positive incentive for start-ups and organisations to produce AI solutions. However, the intensity of global
  competition is so fierce that the level of these solutions need to be very high to be able to compete and get market shares. Externally, the island is expanding its global tech footprint by joining Google’s America-India Connect initiative. The level of digital connectivity for Mauritius should be enhanced.
• Robust Ethical and Legal Governance: The April 2026 rollout of the FAIR
  Guidelines—anchored in Fairness, Accountability, Inclusiveness, and
  Responsibility—provides a high-level blueprint for ethical use of AI. Coupled with a new Golden Visa scheme to attract global tech talent and Innovation
  Scholarships providing seed funding for university students, Mauritius is actively creating a friendly startup ecosystem. However, Mauritius is not the only African country providing these advantages and the impact of these schemes could prove determining for sustaining a local AI industry.

Weaknesses: The Structural Barriers to Longevity

Becoming an AI powerhouse requires overcoming systemic bottlenecks that cannot be resolved by fiscal allocations alone.

• The “Adopter vs. Producer” Dilemma: As it stands, Mauritius operates primarily as an AI adopter rather than a producer of foundational technologies. Without domestic AI sovereignty, the economy remains highly vulnerable to foreign supply chains and proprietary software monopolies.
• The Compute and Data Deficit: Advanced AI models require enormous compute power and specialized processors. As highlighted by the IMF paper, global constraints or geopolitical restrictions on advanced hardware pose a serious source of international inequality. Mauritius currently lacks the large-scale computing clusters and robust data repositories necessary to build bespoke deep-tech models from scratch.
• The Local SME Digital Divide: While major financial institutions and global business entities can seamlessly integrate AI, local Small and Medium Enterprises (SMEs) face immense digital readiness hurdles. If AI benefits are confined strictly to elite corporate sectors, it risks generating severe domestic wealth concentration and economic dualism.

Can Mauritius Leapfrog the Competition?

Mauritius is taking a calculated, high-stakes gamble. By placing AI at the forefront of the 2026/2027 budget, the government is intentionally choosing economic differentiation over traditional dependency. Historical precedents show that technological leapfrogging is entirely possible—much like Kenya’s mobile banking revolution with M-Pesa.

However, to prevent AI from becoming a superficial layer over an uneven economy, policy follow-through is paramount. The island must ensure that its 50,000-person training initiative moves beyond basic digital literacy into high-end engineering, and that its local infrastructure can support the intense computational needs of tomorrow. If Mauritius can successfully bridge its local SME digital divide while leveraging its stable financial jurisdiction, AI might very well secure its place as the next great economic pillar of the
republic.