Jugnauth's restructure message to business

Vice Prime Minister and Minister of Finance and Economic Development, Mr Pravind Jugnauth, had a clear message to enterprises last night: You must restructure.

He was speaking at the launch of the Ebène Tower and the opening of the new offices of Grant Thornton, Mauritius. “In recent years we have seen the importance of solid and safe capital structure in the corporate sector. The euro-crisis must have sent shivers down the spine of many entrepreneurs.

“Those companies that were well-capitalised were in fact less vulnerable. And government has responded promptly to the situation with an Economic Restructuring and Competitiveness Programme,” stated Mr Jugnauth, justifying the message of restructuring.

The world of business, he added, is witnessing vast changes at a staggering speed. Businesses have to think in more strategic ways and act globally to survive.

Mauritius, according to the finance minister, is one of the “faster globalisers” and the needs of businesses have for a long time surpassed the traditional sphere of tax and auditing advice.

“The Mauritian economy is at a stage of its development where the focus is on global competitiveness, openness and sustainability. Accounting and consultancy firms like all other companies in the economy need to adapt fast and to respond effectively to these new policy priorities.”

Achieving global competitiveness is crucial to consolidating the resilience of the economy, believes Mr Jugnauth. The global financial crisis underlined the central importance of having adequate capacity, in terms of expertise, skills, risk management, corporate governance – in fact, the entire chain of activities involved in wealth creation.

“We believe that accounting and consultancy firms can play an important role in helping our companies achieving global competitiveness. All our firms and industries must operate against global benchmarks.”

The minister of finance admitted that some companies have taken it upon themselves to revisit their capital structure. “A few have sought government’s support. But there is not enough restructuring going on. It is good to be focused on growth both at the corporate and national levels,” considered Mr Jugnauth.

Risks to growth 

However, he believes that it is equally crucial to keep a constant watch on the risks to growth in a world fraught with volatility and uncertainty.

“The resilience of our economy will depend largely on our ability to manage risks and remove vulnerabilities to external shocks.”

Accounting and consultancy firms as well as banks and other lending institutions, stated the minister, have a crucial responsibility to cooperate with Government in this venture. “They can have a direct impact by using their advisory channels to influence the firms in the right direction.”

Sustainable development is another global trend to which Mauritius is fully connected and where accounting firms have also a role to play, added Mr Jugnauth.

He pointed to the Maurice Ile Durable Project that requires, according to him, the cooperation and participation of all economic operators in the country, from consumers to producers of goods and providers of services.

“I believe that it is important to bring sustainability to the forefront of accounting practice and educate future accountancy professionals on its application. It is important to embed sustainability considerations in general corporate thinking and develop effective ways to report their efforts.”