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Budget Proposals and Covid-19 Remedial Measures: Two economists voice their concerns

Arvind Nilmadhub and Shaffick Hamuth, both economists, have sent a 15-page list of proposals to the government in the context of both the forthcoming annual Budget and the need to tackle post-Covid-19 challenges.

In the document shared with the press, the economists talk of the necessity to implement crowd curbing measures by adopting IT tools to further improve online delivery of public services. The authors feel now is the opportune time to carry out a complete audit of all systems and procedures of public departments in a bid to further streamline processes, eliminate unnecessary bureaucratic steps and reduce the need for in-person appearances for various applications of permits and licences. While social distancing will be the norm in order to prevent the spread of Covid-19, it is more imperative to simply eliminate crowding at the very source. Moving data not people should be the national motto.

The economists say such measures would also improve the business climate and boost entrepreneurship. They have also proposed incentives to attract investors and encourage investment in all sectors of the economy.

With a strong background in investment promotion and business facilitation, having both been senior officers of the Board of Investment in the past (now renamed Economic Development Board), the economists believe that with the right policies and timely implementation, Mauritius can strengthen its resilience to the Covid-19 impact.

Arvind Nilmadhub and Shaffick Hamuth further state that the government should bank more and more on small and medium enterprises to keep the economy going. The finance minister recently said that he expects up to 100,000 persons to lose their jobs in the coming months and the economists say they hope the government has already started working on plans to support the unemployed. “We can expect as many as 25 percent of those who would lose their jobs to turn to entrepreneurship. It is therefore important that institutions such as SME Mauritius are fully geared to handle them. We should be able to direct them to innovative activities, with the necessary support. The last thing we would like is to see too many people doing the same thing, which will make all of them worse off in a saturated market,” says Shaffick Hamuth.

Arvind Nilmadhub, on his side, says that organisations such as SME Mauritius should identify new activities and run an SME Supermarket where budding entrepreneurs could get a ready-to-roll project off the shelf. He deplores that some sectors or activities have high barriers to entry which is not conducive to fair competition. “For example, to become a Tour Operator, one has to furnish a bank guarantee of Rs 20 million. This is prohibitive. Some sectors must further open up to all entrepreneurs.”

 

Ki News reproduces some of their proposals below. We also welcome proposals/feedback from our readers, which we will share with the economists or publish on Ki News. Proposals/feedback can be sent to editor@ki-news.com

 

BUDGET PROPOSALS AND COVID-19 REMEDIAL MEASURES

Work Access Permit

We note that the authorities are not being able to come up with a simple system that is easy to conceive, operate, manage and that is user-friendly not only for permit holders but also for police officers monitoring road users. The previous paper-based system was cumbersome as it meant thousands of applicants had to physically queue up at the Line Barracks. The authorities then announced a new App, but those who do not own a smartphone must go to apply for their permit at the Citizen’s Advice Bureau. This means we will again see long queues. Yet, the solution couldn’t have been easier. The authorities could have used the database of the Mauritius Revenue Authority to issue the WAP, in as much as the MRA has already processed thousands of applications under the Wage Assistance Scheme and the Self-Employed Assistance Scheme. Thus, it has already captured all data on probable applicants for Work Access Permit.  The police could have collaborated with the MRA through an MoU and then use the system to simply select those sectors of activity eligible and issue an e-permit via SMS.

 

Wage Assistance Scheme/Self-Employed Assistance Scheme

The government has put in place these two schemes to provider an income to workers during the lockdown period. To qualify as employed, one must have an employer and registered for PAYE or NPF/NSF contribution. To qualify as self-employed, one must hold a Business registration card and not in receipt of any other income such as pension etc. However, there are other categories of persons excluded from government assistance and nothing has been provided for them. During this lockdown period where people cannot go out to work, it is the government’s responsibility to ensure they have minimum income to buy food.

The following are examples:

  1. Self-employed persons NOT holding a Business Registration Card who do odd jobs to earn a living.
  2. Company Directors who derive income from Director’s fees and who are neither employed by their company nor self-employed also deserve to be compensated as they are being unable to work and generate income during this lockdown period.
  3. MRA has set the eligibility criteria as employees or self-employed who have been employed/in business for at least three months, but this excludes those who have lost their jobs after 1st January and still looking for job.
  4. Registered unemployed persons not in receipt of any income
  5. Entrepreneurs who have launched their businesses recently and who have not had their first income and who do not fall under either the Wage Assistance Scheme or the Self-Employed Scheme

It was necessary for the government to set up a third Scheme for those who do not fall under the two schemes and who still need a basic minimum income to be able to survive.

Furthermore, it is wrong for the MRA to threaten police action to those who registered under the Self-Employed Scheme and were deemed not eligible. Any person is free to apply and it is up to the MRA to decide whether he is eligible or not. After assessment, the MRA can either approve or turn down, but it cannot threaten people with police action.

 

Expired Road Tax and Fitness

To avoid crowding at Vehicle Examination centres, the government should pass regulations to automatically extend, until 30 June 2020, all Fitness certificates that have expired or are due to expire by 15 June 2020. Thus, Vehicle Examination Centres would have sufficient time to give an appointment to road users so that there is no crowding. Similarly, the government has extended all road tax expiring on 30 April 2020 to 30 June but has not announced any such measure for roax tax expiring on 31 May 2020. It would make sense if all road tax expiring on 31 May be also extended to 30 June 2020 to avoid crowding at the NTA and post offices upon resumption of activities.

Government-owned bodies

We all know what’s happening with our national airline Air Mauritius.  In a sense, this is a good time to put the company back on track and have a leaner organisation.  Some of the measures which the Administrator will eventually take is to lay off employees, streamline expenses, review operations of subsidiaries.  The Administrator should also look at Novation options and creating Special Purpose Vehicles for the debts.

 

In the same vein, the Government should look at other non-performing Government bodies which were already in the red prior to the COVID-19 pandemic and which will be more impacted going forward with the pandemic.  One such institution is the “Casino de Maurice”.  As the Government has already announced that it has frozen new employment in the public sector, the Government can consider redeployment of some staff from Casino de Maurice to other Government Bodies.

 

The Government should also consider new equity partners for some of its institutions or the complete sale of some institutions.  MauBank is one such institution where the Government can either reduce its stakes or completely sell the bank to private shareholders.  This will definitely help the reserves of the Government.  The Metro Express has been one of the landmark projects in Mauritius during the last decade.  The Government may also consider opening shareholding of the Metro Express to private local companies, SMES and individuals (through a managed fund).

 

The Government has announced that it has frozen all appointments in the Government body.  One option which the Government may consider is proposing retirement options to those near retirement age in both public and other parastatal bodies.  This will free up vacancies in Government bodies.  At the same time, the Government should encourage labour migration from non-performing Government bodies to the vacancies which have filled up after retirement.

 

 

Attracting Investment

Capitalise on developments in the Global Market

The COVID-19 pandemic has created an anti-China sentiment in several parts of the world including India and the US. On April 17, India tightened its FDI policy to prevent opportunistic takeovers or acquisitions from China and required that approval of the Government of India is required prior to any takeover.  Already since last year, the trade war between the US and China had escalated and now with the COVID-19 pandemic, the anti-China sentiment is at its peak.  We can expect that US government will also try to emulate India in restricting FDI.

 

As mentioned earlier above, the booming textile sector in Mauritius back in the early 1983s was due to the fact that there was embargo on exports from Chinese companies and thus some companies moved to Mauritius.  The Economic Development Board of Mauritius, Financial Services Commission as well as high officials from the Government of Mauritius should capitalize on this opportunity and encourage Chinese and Hong Kong companies to use the Mauritian jurisdiction.

 

Technology strategy

Everyone has witnessed that during the confinement, the adoption of technology and Fintech has been accelerated.  This is an excellent opportunity to review several legislations whereby online services is provided across the public sector including at the following Government bodies: Registrar General, NTA, Companies Division, Work permit, Economic Development Board of Mauritius (EDBM), Passport & Immigration Office (PIO).

The idea of Digital Mauritius has been on the cards since the advent of the Cybercity in the early 2000s, but the slow take-off was due to a number of factors, namely the low household internet connectivity, low level of IT literacy, absence of necessary infrastructure, lack of skilled labour, etc. But over the years, these shortcomings have been overcome and Mauritius is now poised to be a fully digital economy.

 

ICT: A new White Paper

The Information and Communication Technology Authority (ICTA) will have a preponderant role to play in the transformation of Mauritius into a fully-functional digital economy. ICTA should be given more powers and more attributes to be the driving force of this new synergy. It should be called upon to produce a White Paper on the subject, with effective recommendations to be implemented within a one-year period.

Government should make basic IT training compulsory for all citizens. This will then enable establishment of universal online banking, online services, online payment etc. All citizens must have a compulsory bank account. Government can provide incentives, such as a Rs 500 or Rs 1,000 voucher to open a bank account. All citizens should own a smart phone under a new Scheme subsidized by government. And all citizens should have a compulsory email address.Once the base has been set, Digital Mauritius can evolve fast as everyone would be on board.

Banks should gradually move towards complete online services. Our society should gradually become a cashless one. New forms of payment such as mobile payment, MyT money and the extensive use of platforms such as PayPal, Payoneer, MyMoney, etc should be encouraged and the respective infrastructure laid down. Thus, online shopping would be the norm. Online shopping/e-commerce/online services would also give rise to a new breed of entrepreneurs.

Digital Tax

Going forward, the Government should introduce a digital tax aimed at digital companies such as Facebook, Amazon, Google, EBay.  Right now, all data which anyone puts on Facebook or any other social media is freely obtained by Facebook.  The latter uses the data in its algorithm to market products/services to that person.  The digital tax should apply only on revenues which these big tech companies generate from Mauritius.  France is one of the few countries which have introduced such tax and Mauritius can learn from the French legislation to understand how to impose this tax.

Health sector

The Government has already started the e-health project in Mauritius.  The main objective of the project is to have a single integrated source of information and a focal point of reference on all matters related to health with improved resource planning, allocation, monitoring and evaluation through the use of appropriate information technology. The government should also accelerate the e-health project.

 

We have also noted that there has been an influx of companies providing online shopping and delivery service in Mauritius during the lockdown period. However, it is worth noting that during these times, no company was able to sell pharmaceutical products online.  The Pharmacy Board Act, as it is currently, does not allow the online sale and distribution of pharmaceutical products.  The Government should review this law so as to allow new entrants in the market, namely online pharmacies.  Moreover, the Government should set up an online tracking system for sales of pharmaceutical products both from brick and mortar pharmacies and online pharmacies.  With the e-health project and the online tracking of sales of pharmaceutical products, the Government will be in a better manage the health sector in Mauritius.

 

Doing Business

Good ranking in Doing Business has always helped us to be a viable investment destination.  In times of crisis, we should continue to focus on improving our rankings at international front.  One of the aspects which will definitely help us is having to more IT focused approach.  In fact, to win the COVID-19 battle, government must successfully implement social distancing policies and crowd reduction measures in public services. The following are ideas that can help eliminate crowds and at the same time improve doing business rankings.

Companies Division: More reforms needed

The Companies Division has drastically improved its level of services over the past few years. It is now possible to incorporate a company online, file all returns and effect transactions like change of directors/secretaries etc online. However, the online system has a major flaw: It has not discarded the use of paper. In addition to filling an online form, the Companies Division asks you to print the form, sign it manually, scan and upload it on their system. Pretty weird for an online system! This step should be eliminated.

Furthermore, there are other transactions which can be done online. For example, to obtain a ‘extract of file’ one must first queue up to enter the lift, then queue up at the Companies Division, then submit the request, then go queue up again at the cash office for payment and come back either in the afternoon or the next day to queue up again I order to collect the document. And what document do you get? A printed copy! It’s not even an original. Why can’t the request and the delivery be made by email? But hang on, why do we need an ‘extract of file’ in the first place when the information can be easily downloaded from the website of the Mauritius Network Services?

Similarly filing of ‘Transfer of Shares’ and other documents should be made online. These reforms would drastically reduce customers at the office. Indeed, the motto of the Companies Division is ‘Moving data, not people’ and it is high time this motto is enforced at all levels.

Business Registration

A Business Registration Card is available to anyone. There is no approval process. You just ask for it and get it instantly. But you must apply in person at the Companies Division Office. You have to queue up three times: First to apply, second to pay the fee at the Cash office and finally to collect the card. Since there is absolutely no value addition in the process, it could also be delivered online. The same thing applies to change of particulars: Change of address, activity, etc. This can be changed by the applicant online.

Registrar General

The e-registry project is already on. Citizens should now be allowed to send documents for registration by email. The services could also be decentralized.

 

National Land Transport Authority

This institution is renowned, not to say notorious for its packed waiting room and lengthy service delivery time. We should conduct a full audit of the services of the NTA and find out which ones could be eliminated, which ones could be further streamlined so that they can go online.

(It is noted that, six months after the elections,  the newly created Ministry of Land Transport and Rail still does not have a dedicated website, and it is difficult for citizens to find more info and contact details of its officials)

Registration of deeds

The current system of registration of deed of sale of vehicles is cumbersome as it is divided between two agencies, the NTA and the Registrar General. This involves multiple trips, waste of time and unnecessary costs. The system should be streamlined by adopting best practice from elsewhere. The registration cost of vehicles should be reviewed, it doesn’t make sense to pay a high fee at every transfer of the same vehicle.

 

Online checking of vehicle’s particulars

For example, the ‘Papier-Gage’ is a nonsense that should be immediately abolished as it is a major crowd puller at the NTA. The purpose of the ‘Papier-Gage’ is to protect a vehicle buyer as this document shows whether the vehicle is burdened with any lien. To obtain the ‘Papier-Gage’, the vendor must submit the original sale deed signed by both the vendor and the purchaser. But where is the buyer-protection if he must already pay for the vehicle before even seeing the Papier-Gage, as is common practice? It takes nearly half a day to obtain this document. What is its need when the vehicle’s registration book already shows if there is any lien?  Thus, the idea of an online checking of vehicle’s particulars is essential and which Government should put in place.  The NTA should emulate the UK’s Driver Vehicle and Licensing Agency, which makes its database of vehicles (excluding personal details) to the general public. Anyone purchasing a car can check the vehicle’s history online instantly.

 

Protecting buyers of local second-hand vehicles

Currently, most vehicles damaged in accidents are repaired and put back on the road. While the government is very strict concerning the quality of imported reconditioned vehicles, such protection is not available locally. Many buyers are conned, being unaware that the car they are purchasing had been involved in serious accidents. One way to overcome this is to request all insurers to report all accidents on the online database accessible to the public.

 

Abolish Road Tax

The Road tax serves no value-addition purpose. The tax Disc might have a purpose in large countries where vehicles are likely to cross internal province borders, but in a small island like Mauritius a Road Tax makes no sense. It should be abolished. To make for the shortfall in revenue, the government can simply add a levy to the price of fuel. This is fairer, as vehicle owners would then be taxed according to usage and not according to engine capacity or professional status. Those with higher mileage pay more. Government ends up generating more revenue than the current system.

 

Work & Live Permits

Visa Extension

Tourists who intend to prolong their stay in Mauritius have to apply for visa extension. But the procedure puts off many who then change mind. To extend a visa, you must come in person to the Passport and Immigration Office in Port Louis, queue up, submit a lot of documents, even if you want to stay for a few extra days. This procedure should be simplified. Visa extension should be a simple administrative process online. Until an online system is conceived, it would make sense if area police stations, located in tourist zones (Grand Bay, Belle Mare, Flic en Flac, Mahebourg etc) are empowered to grant visa extension. There are many tourists who like to extend their stay, but current procedures discourage them. If only 10,000 tourists stay 5 more days, the country benefit from another 50,000 tourist nights.

 

Occupation Permit: Deliver e-permits

Currently, an Occupation Permit application is made online and after approval, the applicant is required to call at the EDBM office to show his original documents in order to collect his permit. This cumbersome procedure could be simplified, especially in the current Covid-19 situation where contactless solutions are a must. Since approval is granted online, the permit can also be issued online. The authorities can have recourse to alternative methods to check documents, for example the Business Registration Card and the Certificate of Incorporation can be checked on the portal of the Mauritius Network Services. The passport size photo can be sent digitally. The applicant’s passport has already been checked upon his entry at Immigration counter. His visa status can be checked on the PIO’s system. Payment for the fee can be made (it is actually being made) online.  It is crucial to limit or avoid contact between foreign citizens and EDBM/PIO staff.

New measures regarding Occupation Permit

We currently have an Occupation Permit valid for a maximum of 3 years, renewable thereafter. However, there are some investors who do not like uncertainty. They ask themselves what if a permit is not renewed. This has a bearing on their investment plan. It would be wise, for some type of investments, based on their business plan and track record, to grant new occupation permit valid for 5 or 10 years This eliminate regular renewals. This also encourage investors to do long term planning.

Accompanying persons

Our current residence permit system takes care of dependents of the main permit applicant but excludes other accompanying persons, such as a maid, a nanny or a carer. Many high net worth non-citizens travel along with their maid or child minder, and if the latter cannot obtain a residence permit, then the high net-worth citizens would not come to stay or invest here. Government should consider granting residence permit to this category of non-citizens to further improve the investment climate.

 

Waive turnover requirement

Currently, an Occupation Permit for Investor is renewed if the investor satisfies turnover criteria. But in the context of Covid-19, many companies will have a drastic fall in turnover. This should not penalise investors. If their occupation permits are not renewed, they will be forced to close down and lay off workers. There will be not only direct job losses, but also a decline in other activities (landlord loses a tenant, maid, gardener, pool cleaner, nanny, etc lose their jobs).

An investment project should be assessed in terms of its job creation potential and not on investment level or turnover. In some sectors, even a low investment level or a low turnover is likely to create more jobs than a high investment/high turnover. Our priority is to create and retain as many jobs as possible.

Investor: Widen the scope of eligible activities

Any foreigner who wants to invest in Mauritius should be able to invest in any sector. This will bring more competition in the industry. If the government wants to protect certain sectors, then the government can still allow foreign investors in those sectors, but with a condition that they have to do a joint venture with a local entrepreneur. Encouraging joint-ventures/partnerships with small entrepreneurs will give a boost to the latter and enable transfer of knowledge and skills as well as bringing capital to SMEs.

Permanent Residence

We currently have a Permanent Residence valid for 10 years. Previously, the only attractiveness of this permanent Residence was the fact that it allowed the holder to acquire a residential property ANYWHERE in Mauritius provided the land extend did not exceed 1.25 arpents. Then the scheme was amended and the holder could only purchase one apartment in a building having at least ground+2 level. However, this incentive was diluted when the right to acquire apartments was open to all foreigners, irrespective of whether they hold a residence permit or not.

The Permanent Residence has therefore lost its attractiveness. Yet it could be used to attract investors and high net worth retirees as it is the next best option after citizenship. Since citizenship cannot be granted to a large number of foreigners, the Permanent Residence permit comes as a good alternative. How?

  • Simply extend the duration to 25 years. Long-duration permit offer security and peace of mind to applicants and allow them long-term planning.
  • Secondly, allow Permanent Residence Permit to acquire only one residential unit, any type (apartment or villa), anywhere in Mauritius. We should bear in mind that Permanent Residence holders aim to stay in Mauritius forever. They are not interested in gated communities They tend to integrate into Mauritian society. Therefore, it makes sense to grant them authorization to buy a residence, let’s say on an extend of land of maximum 25 perches. This will boost the construction sector and allow small contractors to benefit, as well as the local community.

 

Mauritian Passport

This budget measure was already announced but due to public outrage, the Government did not go forward with this proposal.  Now is the right time to introduce this measure as it will help to increase foreign reserves of the Government.  Anti-China sentiment will likely lead to movement and investment restrictions for Chinese high net worth individuals.

As comparison, I take the case of St Lucia, which is a sovereign island located in the Caribbean Sea and which has been recently selling passports through a program called Citizenship by Investment (CIP).  The CIP program has been running for since October 2015 now.  Most of the successful applicants are Chinese high net worth individuals.  These people need the passport mostly for travel and investment purposes.  Below are the official figures which have been reported:

 

Table 1: Statistics on St Lucia CIP 2016 – 2019

*Includes application from previous year

 

Mauritian passport for sale for high net worth individuals will help boost our foreign reserves. As enunciated in the 2018/2019 Budget speech, successful applicants for Mauritian passport needed to make a contribution of USD 1,000,000 in the Mauritius Sovereign Fund.  Assuming that in 1-year Mauritius has 50 successful applicants, the Government will then have some USD 50M in the Mauritius Sovereign Fund.  As we all know, it is during time of crisis that we need to have our reserves available.

 

However, I would like to point out that putting this measure in place might be detrimental for our offshore sector.  I would thus advise on putting this measure for a limited time period (2 year). At the same time, the Government should tighten the law to prevent foreigners getting a Mauritian passport through the backdoor, such as sham marriages.

 

Citizenship for investors

The government must reward those foreign investors with excellent track record, huge contribution to the economy in terms of job creation, transfer of skills, creation of opportunities for local SMEs, exciting future plans and commitment to serve the nation. For example, such investors with at least 10 years continuous operation and residence in Mauritius should be granted citizenship. Deserving foreign investors should be amply rewarded and this will act as a boost to other investors to strive to contribute to our economy.

 

Judicial reforms: Real E-judiciary

The judiciary is a major crowd puller and it is essential to limit gatherings in the context of Covid-19. Here are a few measures that can contribute to that effect:

Affidavit swearing

Everyday many people queue up in courts to swear affidavit. But the process is limited to the Court Officer signing the document. There is absolutely no value addition. To prevent queuing and risk of Covid-19 spread, it makes sense to abolish the current process of affidavit swearing and empower solicitors as Commissioner of Oaths, as is the case in most countries.

Court procedures

During the lockdown, it has been possible for citizens to pay court fees and bail by MCB Juice and receipt sent by WhatsApp to the Court Usher. This means if the willingness is there, change can happen quickly. Payment of fees, fines, etc should be made possible online, thus avoiding queues at cash offices.

Inheritance issues

Government should bring new legislations to speed up litigations on inheritance issues, which most often underline family feuds. Similarly, there are many disputes among neighbours over property boundaries, etc. Many inheritance/property disputes often remain unresolved through more than one generation. The complexity of procedures means cases drag on and on, and costs escalate. Many families choose to abandon half-way, unable to meet costs. New legislations should ensure these cases are resolved either in Court or through arbitration as soon as possible. It is a known fact that such cases are often the cause of violence.

Waiving of petty fines

With the lockdown, there is likely to be a serious backlog of cases that will clog the proper functioning of our courts. Many cases relate to petty issues like minor road traffic offences, disputes with local authorities over non-payment of municipal tax or trade fees, trading without permit, etc. To clear backlog and to avoid movement of people to courts, it makes sense for the authorities to set aside all pending minor road offence cases and fines and for local authorities to discard all their small claims of less than Rs 50,000. This measure will also provide a relief to citizens.

 

Construction Sector

The construction sector in Mauritius is poised to be hard hit from the COVID-19 pandemic.  We can thus expect falling FDI in the sector in the coming months.  There will be no way out of the coming recession without a fiscal plan that involves infrastructure. Below are some proposals which the Government can use to keep the construction sector afloat.

  • Government should prioritize public infrastructure projects while continuing with investment in public projects.
  • Government should revisit public infrastructure projects and try to see if some items in each project can be postponed or eliminated. Thus, savings for the Government in the short term.
  • The low interest rate on loans make it more attractive for people to borrow to construct or investors to set up property development projects. Given the fact that Mauritius has well handled the pandemic situation, many High Net Worth Individuals from UK, France, Italy, China, South Africa and India will consider Mauritius as secure destination.  The EDBM should have PR partners in these regions and have targeted prospection missions once air access is released in these countries.
  • For a period of 2 years, the Government should review the threshold for acquisition of property, by Non-Citizens, slightly
  • Allow income tax deductions of up to a maximum of MUR 500,000 on housing renovation works for individuals.
    • Currently the MRA has a VAT refund scheme (of an amount not exceeding MUR 500,000) for those who are building their houses.
    • This income tax deduction for renovation works should be irrespective of housing loans.
    • The MRA should put their guidelines as to what document they will need. For example, receipts from architects, QS, shops.
    • This measure will help boost local housing construction sector.

 

Regeneration programmes

Setting up Urban and Rural Regeneration programmes can create opportunities for small and medium contractors. Government to provide incentives such as tax allowance, Vat exemption on materials and subsidies to encourage renovation of old buildings, commercial or residential. In the same vein, such buildings can upgrade themselves to modern norms and other requirements such as fire compliance, access for disabled, etc.

Mauritian Diaspora

A few years ago, the government came up with a Scheme for the Mauritian Diaspora. However, the incentives provided are not really attractive in s much as more or less the same incentives such as duty-free car and duty-free import of personal effects can be obtained by any returning citizen even without holding this Diaspora certificate. Government should think beyond ‘Duty Free’ and provide more incentives to attract members of Mauritian Diaspora. With Covid-19 spreading around the world, many of our Diaspora members are taking a renewed interest in settling back home, where they feel safer, given the successful containment of the spread by the local authorities. The Mauritian Diaspora Scheme should be reviewed in this context. For example, why limit the registration duty exemption on purchase of an immovable property to a Smart City or PDS project? Let the person be free to choose where he wishes to purchase property.

 

Food Security

Mauritius is a net food importer, with an overall self-sufficiency ratio of less than 30 percent. Mauritius imports most of its staples such as rice, wheat, edible oils, meats and dairy products.  Although the Government has been pushing hard for food security during the past few years, it is only now, during the lockdown period, that general public has understood the importance of it.  It is thus imperative that the Government becomes more aggressive in its food security strategy. The Government may, in additional to the existing policy measures in place, consider the following proposals:

  • Create Government schemes which encourage people to have their own vegetable/herb garden. One example is by providing seeds and basic equipment.
  • Earmark Government land, throughout Mauritius, for agriculture projects.
    • The land to be provided to agropreneurs, both local and foreigners who have viable agro-based projects.
  • Encourage agropreneurs to venture into agriculture.
    • Government can provide initial funding for agropreneurs and at the same time become partners through quasi-equity.
    • Agropreneurs should have a guaranteed market by selling their products directly to the Agricultural Marketing Board.
    • Since there is risk of rising unemployment, the Government can encourage people who are redundant to become agropreneurs.
  • Encourage seafood cultivation in Barachois.
    • Stock take of all unused government Barachois and retake possession from current lessors.
    • Identify new locations and build new Barachois
    • Encourage local and foreign entrepreneurs to venture in seafood production.
    • Government can provide initial funding for these entrepreneurs and at the same time become partners through quasi-equity.
    • Encourage hypermarkets, supermarkets and shops to buy directly from these productions.
  • Encourage local meat production
    • Government can provide initial funding for people who wish to enter this business and at the same time become partners through quasi-equity.
    • The Mauritius Meat Authority should buy the products from these entrepreneurs thereby ensuring guaranteed market.

 

  • Revive the dairy sector in Mauritius
    • Government can provide initial funding for people who wish to enter this business and at the same time become partners through quasi-equity.
    • Revive the sector with regional pasteurization plants, set up a national milk collection system from small breeders and a national fresh milk distribution system.
    • Run awareness campaign, especially on TV to promote health benefits of fresh milk
    • To create guaranteed markets for small breeders, government to give priority to fresh locally produced milk over imported milk powder for use in hospitals and prisons
    • Set up local pasteurized milk feeding programme in ZEP schools
    • Provide incentives for industrial fodder production
    • Set up a new animal feed factory, with agricultural cooperatives as main shareholders and negotiate with friendly countries such as India and Pakistan for the import of rice residues and wheat bran to manufacture animal feed of higher nutritional content for sale at lower cost to breeders, thereby stimulating competition in a market dominated by a duopoly.

 

Protection of small planters

Small planters suffer not only from climate change but also from theft. The amount of looting of crops in fields is on the rise. The Safe City Project should be extended to agricultural areas where vegetable cultivation is predominant.

Land bank

Many planters have abandoned their lands due to rising cost of production, lack of manpower, rising land maintenance cost or disinterest in agriculture from their offsprings.  On the other hand, there are many young Mauritians interested in investing in the agricultural sector. Government should set up a land bank to register all available agricultural lands per region and publicise it and use a mechanism to bring entrepreneurs and landowners together to strike a lease deal. In addition, the land bank should include all available agricultural lands belonging to the state.

 

 

Small & Medium Enterprises

Loan guarantee

One of the major issues faced by SMEs and that successive governments have failed to address is loan guarantee. Banks require a collateral, even for a small loan amount and most entrepreneurs have no immovable asset to pledge, except their house, which, in most cases, is already mortgaged due to housing loan. Government should find a way to guarantee loans, say up to Rs 1 or 3 million for viable projects.

 

SME Supermarket

Covid-19 will cause many job losses and many unemployed will try their luck at entrepreneurship. However, we should avoid a situation where, due to lack of sufficient information on opportunities and viable sectors, many people end up doing similar activities, thus competing with each other in a limited market, and making everyone worse off. It is therefore imperative that institutions such as SME Mauritius are able to provide the right guidance on new activities. A lot of research has to be done. Alternatively, SME Mauritius should enlist the services of specialists in the fields, who can identify new opportunities and activities and then advise budding entrepreneurs. The idea of an ‘SME Supermarket’ is but one initiative whereby ready-made projects can be made available off-the shelf to entrepreneurs.

 

Commercial space

SMEs lack visibility. Small entrepreneurs cannot afford high rental costs of premium located premises. Government should make it compulsory for shopping malls to reserve at least 15 percent of their available space for registered SMEs at preferential rates. Similarly, the lack of parking spaces in town and village business centres result in loss of customers.  Local authorities should identify suitable land to create parking spaces for shoppers in urban and rural central business areas to encourage shoppers visit small shops.

 

Environment

  • Explore avenues for enhanced waste recycling, for example glassphalt, alternative uses of used tyre particles, production of bio-degradable containers in Mauritius, etc
  • Review medical waste management systems and adopt new ecofriendly zero-emission plants
  • Acquisition of tree uprooting equipment so that trees can be easily transplanted

 

Big is no longer beautiful

Covid-19 has shown us the major drawbacks of hypermarkets and the importance of having a network of small and medium shops covering the island for an effective and timely distribution of provisions during national crisis. It is high time to revive the traditional cooperative networks with modern management tools to ensure every village, every town area is serviced by a cooperative shop where citizens are actively involved.

 

Tourism: Small is beautiful

The tourism sector will see a renewed preference for small and medium establishments as tourists would tend to avoid crowded resorts. Small villas and guest houses would be preferred. In that context, government should provide incentives to small establishments to upgrade their amenities and services. Also, with the advent of tools like AirBnb, many small players are entering the market but there are costly barriers. Government must relax some of the costly rules governing Tourism Accommodation certificate to allow small players benefit from a slice of the tourism industry.

 

Road Safety

The battle against road accidents has not been won. Deadly accidents have occurred even during the lockdown period. Most often, the high number of vehicles is blamed for the high accident rates, but facts reveal that a large proportion of accidents occur when our roads are deserted. Tackling road insecurity should start at the source, that is obtaining a driving licence.

The process of obtaining a driving licence should start at school. Road Safety should be a compulsory subject as from Grade 9.

The overall licensing of drivers should be completely reviewed. This role should be detached from the police. A new Driver Licensing Department, perhaps operating under a revamped should be set up. It should no longer be the role of the police to issue driving licences. Government should sign MoU with similar agencies abroad for transfer of skills and knowhow.

Learning the basic manoeuvres at the wheel does not make one a good driver. A good driver must have essential hazard perception skills. May countries who have introduced Hazard Perception Test have seen a decline in road accidents. The HPT should be introduced in Mauritius.

Our driving tests are obsolete. For example, how often do we see our bus drivers waving a red flag at each and every manoeuvre? Almost never. Our buses are now sophisticated, with rear view cameras and other gadgets and driver-assisting modules.  The Red Flag Law was introduced by our colonial master and it has been repealed in UK, but in Mauritius waving a red flag remains a compulsory part of a bus or truck driving test! Similarly, for a bus theory driving test, the candidate has to learn by heart the different types of oils used in the bus, but this doesn’t make sense anymore as with our modern semi-low floor buses, drivers are not allowed to touch the engine in case of breakdown, due to warranty provided by the bus supplier, who is solely entitled to intervene.

We need to upgrade our test models in order to test essential aptitudes of drivers rather than focusing on basic physical maneuvering of the wheel.

 

NGOs and Charitable Institutions

Many NGOs and Charitable Institutions who operate as non-profit making employ staff and contribute to NPF/NSF. It was therefore wrong to exclude them from the Wage Assistance Scheme on the ground that they are charitable institutions. NGOs can also be employers and cannot be penalised. Fortunately, when the matter was brought to the attention of the Finance Minister, he saw the logic of it and promptly brought the issue to Cabinet who gave its approval. Since we are on the subject of NGOs, it must be highlighted that NGOs contribute a lot to the socioeconomic fabric of our society. There are many unsung heroes running NGOs and achieving marvels with limited means at their disposal.

Government should review and update the relevant legislation governing NGOs and encourage them to also become social enterprises where they can generate revenue and become self-financed. Many activities can be better carried out by NGOs than companies and many opportunities can be opened for small entrepreneurs.

 

Eradication of poverty

The Finance Minister has estimated that up to 100,000 persons might become unemployed in the coming months. Many of them are those at the bottom end of the social ladder. In order to eradicate poverty, government should come up with a new “Sponsor a Poor Family’ scheme whereby the top 10,000 richest families are encouraged to sponsor the bottom 10,000 poorest families in any way they could (living expenses, child costs, school costs, training costs, etc). The amount spent on the sponsored family should then be made deductible from Income Tax.

 

CONCLUSION

Whilst we are all going to bear the consequences of the COVID-19 pandemic, proactive measures taken by the Government has spared us from bearing the initial consequences.  Now with the lockdown coming to an end, it is high time to take decisive and difficult decisions towards ensuring we have our economy back on track and make history again.  This can only be achieved with each and everyone understanding that even unpopular measures need to be taken in the short term for the benefit of all of us in the future.

 

 

 

 

 

 

 

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