“We are too small as a country to do things in silos”

Parik Tulsidas, Head of Financial Markets, MCB 

• “Policymakers and the private sector join forces to create an effective ecosystem to attract further foreign investment (both institutional and private) to our country”

• “Over the last three years, 95% of mined gold was purchased by the central banks of Russia, China and India.”

With financial markets confronting exceptional turbulence in 2025, Parik Tulsidas, of MCB, sees a window for Mauritius to capitalize on emerging shifts – from Gulf-led investments in Africa to the gradual diversification away from the US dollar. Interest costs on US government debt now threaten to surpass military spending. At the same time, policy unpredictability under a second Trump presidency is pushing capital toward Africa, Eastern Europe and Asia. In this context, the environment is ripe for Mauritius to position itself as a regional financial hub akin to Singapore. But public-private collaboration will be essential to build a cohesive ecosystem and attract international investment. Parik Tulsidas believes that in times of dislocation, opportunities can arise to acquire quality assets at a discount, while demand for alternative reserves, including gold and crypto, is gaining momentum. Against this backdrop, MCB aims to evolve from a service provider to a strategic partner, enabling clients to navigate risks and act decisively.

Mr. Tulsidas, what prompted the organisation of this high-level forum at this juncture in 2025?

At MCB, our sales teams have regular engagements with our clients where they gather feedback on what is topical, and it was clear that the extreme volatility in financial markets since the start of 2025 was at the top of everyone’s minds. Thus, the ‘raison d’être’ of such an event was to help stakeholders better understand the current economic situation and, consequently, how investment and hedging decisions could be undertaken in this ever-evolving financial landscape. I would like to thank ETM Analytics and Quinten, who have been our trusted financial markets research partners since 2023, and with their expertise in the field, we have managed to organise this event, which has been well received by our esteemed clients.

How does MCB view its role in equipping local and regional stakeholders with the foresight needed to navigate volatile macroeconomic conditions?

As mentioned, we aim to remain close to the needs of our clients. As such, we want to also anticipate their requirements in terms of relevant news flow, views and forecasts within financial markets.

Through the combined strengths of MCB’s in-house research teams and strategic external collaborators like ETM Analytics, relevant insights on macro trends, regional dynamics and sector-specific developments are shared with stakeholders on a regular basis.  We have daily market updates and periodical research pieces that we send out to all our stakeholders, and this is something that we wish to grow further as part of financial markets research, where we intend to have country-specific research on the African continent in the future. The goal is to assist decision-makers and stakeholders in proactively managing their financial market risk.

Quinten Bertenshaw spoke of “liquidity drying up” and the shift away from dollar dominance. What were the most striking takeaways from his presentation?

There were indeed several key takeaways, but the ones that struck me as those that may potentially have great significance in the future global economic and geopolitical landscape are the following:

Interest costs on U.S. Government Debt are projected to exceed $1 trillion annually – more than its total military expenditure. Bond market indicators, such as the 2-year Bond versus the 10-year Bond spread, suggest steepening yield curves across major developed economies. Over the last three years, 95% of mined gold was purchased by the central banks of Russia, China and India. In the past five years, nearly USD 200 billion has flowed from the UAE and Saudi Arabia into African infrastructure, logistics, telecoms, and agriculture.

Trump’s return to the U.S. presidency was framed as the “biggest macro risk” of 2025. How are local financial markets preparing for this renewed wave of policy unpredictability?

The economic agenda under the Trump administration has been centred around the reindustrialisation of America. As a result, there has been a significant shift, causing a wave of policy unpredictability. Diversification remains a key approach, with portfolios being adjusted to include a mix of asset classes, sectors, and geographies to spread risk. There has been a scaling up on high-quality assets and safe havens like gold, thus anticipating volatility in response to tariffs. We have seen capital starting to shift towards Africa, Eastern Europe, and parts of Asia which are less tied to the U.S. trade framework. We also continue to see increased investment in cryptocurrencies and other digital assets.

What are your views on the assertion that we are entering a structurally different phase in global finance – marked by dollar diversification and Gulf-led African investments?

Normally, in times of uncertainty, you see a complete shift towards the U.S Dollar. However, this time, with everything that has happened since the Trump administration took office, we are seeing a diversification of risk. The recent case in point is the Israel-Iran conflict.  I was expecting a much stronger USD, but we haven’t seen a major shift in flows, although it may still be early days. I have to say that I’m pleasantly surprised though.

It’s fair to say that the de-dollarisation process is going to be a slow one as it remains the dominant reserve currency and all commodities are still priced in USD. It can also be observed that the dollar’s share of allocated foreign reserves of central banks and governments still accounts for more than 57% of the world’s official foreign currency reserves according to the IMF.

The reduced role of the US dollar over the last two decades has not been matched by increases in the shares of the other “big four” currencies – the Euro, Yen, and British Pound – but instead investments in AUD, CAD, CNY, SGD, KRW and Nordic currencies have been noted.

Non-traditional reserve currencies, like gold, are attractive to reserve managers because they provide diversification, relatively attractive yields and are easier to trade with the deepening of the Financial Markets.

On the other hand, you have the emergence of Cryptocurrencies and digital currencies that are making their mark, both for those looking to diversify from the US dollar but also with individuals and asset managers from countries where availability of foreign exchange is an issue. This trend is growing and looks likely to expand further, given that investors are looking for quick capital gains.

In terms of the increasing investment into Africa from UAE and Saudi Arabia, I believe Quinten was quite clear in saying that they are buying long-term influence, and their approach is far more sophisticated than what we saw under previous FDI waves. The influence of the EU and US in Africa is on a declining slope, ultimately opening the door to Gulf States to drive investments on the continent.

However, China is continuing to woo African countries, and recently, we saw that they removed all tariffs on imports from the African continent. It is clear to see that Africa, with its rising young population and abundance of resources, is providing a great opportunity for the upcoming powerhouses of the world economy, like China, India, the UAE and Saudi Arabia.

How should Mauritian corporates and financial institutions position themselves in a context where dollar scarcity and higher U.S. borrowing costs may persist?

Before going into strategies, I have to say that the US dollar scarcity that we have seen in Mauritius since the Covid pandemic has been because of very high consumption patterns. Our borders were closed for almost 18 months during the pandemic, but our consumption patterns did not alter because there was abundant liquidity pumped into the system, which encouraged people to consume more. As such, there was a mismatch and a backlog between inflows and outflows of FCY, which has carried forward up until today. Don’t forget that we import around 80% of what we consume, so just imagine the strain it puts on FX requirements. It will be interesting to see how the measures taken in the latest national budget will impact both inflows and outflows of FX going forward.

In terms of strategies to adapt to the changing financial markets landscape, I would suggest adopting active Foreign Exchange strategies with hedging instruments like forward FX contracts and cross currency swaps, among others, to protect against dollar volatility.

It is also prudent to diversify funding sources by exploring alternative options in EUR or CNY (RMB), for example, to reduce reliance on costly USD borrowings. BOM is also working on the RMB and INR clearing and settlement, so hopefully, trade-related lending in these key currencies to clients in Mauritius will soon be possible as a diversification of their funding and settlement needs.

Do you see opportunities for Mauritius in the Gulf’s growing appetite for African investments, particularly in logistics, food security, and infrastructure?

The Comprehensive Economic Partnership Agreement (CEPA) between the UAE and Mauritius, effective from 1st April 2025, marks the UAE’s first such deal with an African nation, reinforcing a strong trade relationship. Mauritius could benefit from CEPA with its participation in the African Continental Free Trade Area (AfCFTA), which supports triangular trade models for both the goods and services sectors.

Through our representative offices in Dubai, South Africa, Kenya, and Nigeria, MCB is also well-placed to tap into the financing opportunities linked to the Gulf’s appetite for African investments via partnerships with their Corporates, Banks, and DFIs.

Given the global trend towards reindustrialisation and supply chain reconfiguration, is there a potential niche for Mauritius as a regional hub?

Through the Mauritius International Financial Centre ecosystem, we can structure cross-border investments, trade finance, and risk management solutions that would support industrial activity in Africa. Furthermore, multinational corporates targeting Africa can set up shared services and procurement centres in Mauritius. Our strength is our financial services industry, and the ideal scenario is a bit like what Singapore has been to Asia, i.e. the regional head offices of logistics, supply chain and manufacturing firms on the continent can be in Mauritius, where all the treasury management, financing and procurement is done here, while the operations are in different countries on the continent. We need to use our strengths to our advantage. Mauritius offers a politically stable, business-friendly environment with access to African, Indian Ocean, and Asian markets. At the same time, we have signed agreements such as AfCFTA, COMESA, SADC, the Mauritius-India CECPA, and the Mauritius-China FTA, which makes us an ideal place to be the administrative capital for companies looking to do business in several parts of Africa. Another area that needs to be revamped is our port infrastructure, with a potential to attract a higher amount of maritime traffic given the security issues in the Middle East and North Eastern Africa.

The session emphasised not just risk, but also opportunity. What specific opportunities do you believe are ripe for capture in the current environment?

If you look at some of the economic fundamentals and forecasts for the African continent that were presented by Quinten during the session, there are several opportunities for the Mauritius IFC to play an extremely important part in. Some of these forecasts are as follows:

• The global clean energy transition is driving a surge in demand for critical minerals such as cobalt and lithium, fuelling a market for electric vehicles and energy storage, among others, projected to reach USD 59 trillion by 2050.
• With global revenues from key mineral extractions estimated at USD 16 trillion over 25 years, Sub-Saharan Africa could capture over 10% of this, potentially boosting its GDP by more than 12% by 2050 if managed effectively.
• Sustainable agriculture in Africa:
• Sustainable practices in agriculture in Africa could boost productivity by up to 30 percent.
• With 65% of the world’s unused arable land being situated in Africa, the continent’s potential for agricultural production is enormous.
• The African food and agriculture market alone has the potential to increase from USD 280 billion a year in 2023 to USD 1 trillion by 2030.
• Africa’s Demographic:
• Africa’s population is projected to reach 2.4 billion by 2050, with 75% being under 35 years old, and the urban population is expected to grow to around 950 million by 2040.
• This is expected to drive consumer demand, with household consumption expected to rise from USD 2.2 trillion in 2023 to USD 3.0 trillion by 2030.

With the global trend of seeking stable and high-return destinations, Mauritius could leverage on its robust financial ecosystem to serve as an investment gateway into and out of Africa, but also within Africa.

At the same time, the shift to digital continues, and Mauritius could play an essential role in the expansion of the BPO and Fintech Services. Digital trades make up 35 % of Africa’s services exports, and it is expected that e-commerce and digital services will contribute up to USD 180 billion in Africa’s GDP. Mauritius can also leverage on the wealth being created on the continent by establishing itself as a Private Banking and Wealth Management jurisdiction of choice for HNWIs in Africa.

However, it is critical, especially now more than ever, that policymakers and the private sector join forces to create an effective ecosystem to attract further foreign investment (both institutional and private) to our country.  It must be a joint effort because we are too small as a country to do things in silos. Our Mauritius International Financial Centre has huge potential to grow further. As such, we need to have consistent policies that attract more international firms doing business in Africa to set up here, while we should also create a conducive and attractive environment to bring top international talents to our country to share their expertise. The bigger the cake, the more the country will benefit!

“The US dollar scarcity that we have seen in Mauritius since the Covid pandemic has been because of very high consumption patterns.”

What signals is MCB observing in local treasury flows and hedging behaviours from corporate clients? Are they adopting a more defensive posture?

As mentioned previously, we are having several discussions with our clients, and everyone is following the volatility in financial markets. Each corporate entity has its own specificities, but ultimately, everyone is impacted by what’s happening in markets. These are ongoing discussions, and it’s good to see that our corporates are quite advanced in the way that they manage their treasury requirements.

Has there been any shift in MCB’s financial market strategies or product offerings in response to the tightening global liquidity cycle?

We are always adding new products and services to our financial markets offering, both for our local and international customers. There are several products available in financial markets, and these can be structured to our clients’ needs. However, the key is to be proactive rather than reactive, which is why we want to engage with clients on a regular basis.

The presentation concluded with a Warren Buffett quote about seizing opportunities in times of dislocation. How does MCB help its clients act decisively, rather than retreat?

When navigated properly, dislocations can prove to be a good time to invest in quality assets at a discount.

And in volatile markets, access to the right capital matters.

At MCB, we provide:

• Tailored financing solutions for expansions, acquisitions, or working capital during dislocations.
• Structured trades and treasury support, including FX risk management, interest rate hedging, and commodities hedging, providing better risk management to support your investment decisions.

These tools enable clients to move decisively while competitors may hold back. During volatile periods, MCB acts as a partner – not just a provider – supporting board-level thinking, strategic repositioning, and long-term planning. This reinforces the client’s confidence to invest, grow, and adapt.

How frequently do you anticipate holding similar strategic forums in the future, and what themes are likely to shape the next edition?

Several initiatives are underway as we continue to grow our offering locally and on the African continent. We are building our capabilities in African currencies, and we recently set up an Africa trading desk to examine African FX and Bonds. We are also working on developing our capabilities using technology and cross-asset correlations to better serve our clients in terms of hedging and investment products that will suit their future needs.

Therefore, I believe we will host many such events in the future in Mauritius and in our other key markets to remain close to our clients.