“Neither the pandemic nor the war in Ukraine has won over the resilience of Mauritius”

“My goal for the country is to bring back the public debt ratio below 60%”

Speaking at the signing ceremony of the landmark Memorandum of Understanding (MoU) between CARE Ratings (Africa) Private Limited (CRAF) and The African Peer Review Mechanism (APRM), last Thursday, the Finance Minister of Mauritius lauded the partnership’s significance in setting up the Africa Credit Rating Agency. This collaboration is seen as a crucial step towards African financial independence and a testament to the continent’s commitment to forging a path of progress and empowerment for its economies and people.

“The MoU between CARE Ratings Africa Private Limited and the African Peer Review Mechanism for the setting up of the Africa Credit Rating Agency is a significant milestone achieved for our continent,” Dr Renganaden Padayachy remarked. He highlighted the strategic importance of this initiative, emphasizing that it is timely given the growing focus on Africa in international economic forums. “Indeed, I have just come back from the IMF and World Bank’s pre-meetings last week, and I can assure you that the focus is Africa. This is the time for Africa to shine,” he stated.

The MoU between CARE Ratings Africa Private Limited and the African Peer Review Mechanism for the setting up of the Africa Credit Rating Agency is a significant milestone achieved for our continent

The African Peer Review Mechanism (APRM), since its inception in 2003, has been a vital platform for African countries to share experiences, reinforce best practices, and assess capacity-building needs. The decision to establish an Africa Credit Rating Agency is one of its most ambitious and impactful initiatives. According to the minister, this move represents more than just a technical collaboration—it is a demonstration of Africa’s commitment to finding its own solutions to its unique challenges. “By pooling our resources, expertise, and insights, we aim to create a framework that is transparent, objective, and relevant to the needs of our nations,” he noted.

The establishment of the Africa Credit Rating Agency is expected to provide investors with a more accurate and nuanced understanding of investment opportunities across the continent, fostering greater confidence and unlocking Africa’s full potential. The minister explained that “by aligning our ratings with the realities of our economic landscape, we can foster greater confidence and trust among investors, thereby unlocking the full potential of the continent’s vast resources and human capital.”

This new agency is seen as particularly crucial given the diverse nature of African economies, which range from resource-rich nations to small island developing states like Mauritius. The minister shared his belief in Africa’s vast potential, quoting philanthropist Mouhi Bravin, “Far from being hopeless, Africa is full of hope and potential, maybe more so than any other continent.”

Mauritius, as a small island developing state, has faced significant challenges since 2020, but it has demonstrated resilience and strong economic performance. Despite the pandemic and the war in Ukraine, Mauritius has experienced robust GDP growth, with figures standing at 8.9% in 2020-2022, and 7% in 2023. The country has also seen record levels of Foreign Direct Investment (FDI), increased revenue, and a drop in unemployment to its lowest rate in 27 years.

“Since 2020, Mauritius, like many countries around the world, has faced the worst crisis of its history. Despite the many challenges, the government of Mauritius has not let its people down. Neither the pandemic nor the war in Ukraine has won over the resilience of Mauritius. We have invested in our population and our businesses, and have rebounded very strongly. Indeed, GDP growth from 2020-2022 and 2023 stood at 8.9% and 7% respectively. For the last two years, international organisations, including the IMF, have had to revise upwards the motion GDP growth by an additional 30%. The dynamism of our economy is going to be partial. For this year, we expect the GDP of Mauritius to grow by 6.5%. This is more than double the global growth projected by the IMF in its latest world economic outlook. Strong export and investment in Mauritius are supporting our growth. Indeed, FDI inflows last year were at record levels, amounting to some 35 billion rupees. Revenue is also on the high side, with a 60% increase from 2022 to 2023. Last but not least, the unemployment rate in Mauritius, standing at 6.4%, is at its lowest rate in 27 years,” the minister emphasised.

“These strong fundamentals have led to Mauritius being consistently seen by global investors as an international financial centre of repute and content. These investors are indeed benefiting from the resilience of our economy, our strong institutional framework, our well-qualified professionals, and our commitment to fiscal consolidation. On the fiscal forefront, I am proud to share that the motion public debt ratio to GDP has decreased by roughly 20% since June 2021, from a peak of 91.9% in June 2021. We expect the public debt ratio to stand at 75.8% in June 2024, making a great advancement in our fiscal consolidation strategy. We will not stop here. My goal for the country is to bring back the public debt ratio below 60%. This is ambitious but fully achievable. Despite the challenges posed by the global economic environment, Mauritius has successfully maintained its investment-grade status, providing investors with confidence and stability.”

The Finance Minister highlighted that these strong fundamentals have positioned Mauritius as a respected international financial centre, a status that provides investors with confidence and stability. He is confident that the continued growth and stability in Mauritius, along with the establishment of the Africa Credit Rating Agency, will create new opportunities for the continent.

“We, Africans, can lead our own destiny and set great standards for the benefit of our people and our economies,” the minister concluded, encouraging African nations to embrace this opportunity and work together towards a prosperous and self-reliant future.