Mauritius

October 03, 2013

Budget 2014: Proposals

At one month of the presentation of the 2014 Budget, the various economic players had the opportunity to submit their proposals to the Ministry of Finance.

With yet another downgraded key indicators, a loss of confidence on the part of operators and a limited scope already declared by the Financial Secretary, fears are growing. Will it play on the effects of ads this time to reverse the pessimistic trend? Where do you find new niches to build out at half-mast?

First, the positive developments. The announcement of the debut of the Chinese group Cin-Gin Rich Earth to develop the economic zone of Jin Fei has renewed hope for job-creating projects out of the land. Hopefully this time, Cin-Gin keep his word.

After the dream sold by Tian Li to the effect that more than 20 billion rupees will be invested in Riche Terre and thousands of jobs created, economic observers eventually lost confidence in this type of ad. Especially another megaproject, the Land-Based Oceanic Industry (LBOI) also messed up, then resurrect himself as DOWA (Deep Ocean Water Applications). If, in the background, these projects are feasible, it is mainly in the search for investors that these projects have suffered.

The latest report from Statistics Mauritius reviewed several economic indicators to decline. Thus, growth for 2013 is now estimated at 3.2%, against a previous estimate of 3.3% in June. The construction sector is also in trouble, with a decrease of 9.4% estimated for 2013. A decrease was also approached for public and private investment, while the number of expected home this year tourists can not exceed 990,000 bar. By cons, optimism appears to ICT and financial services sectors.

Promoting sectors

So far, we tend to promote sectors solo, then it is possible to generate greater synergy by offering complementary sectors. For example, IRS-RES segment is closely linked to tourism, but this area also focus future wealthy foreign students.

Similarly, the development of IT can bring in our financial operations 'back office' of the major international players in the financial services. We will in the near future thousands of foreign students to turn our night services, part-time, as part of a / 24 7 economy, which will also provide a critical mass to grow our shopping malls. Unfortunately, to date there has been no study on the prospects offered by the various sectors complementary.

Real Estate: We need to diversify our offerings

Official figures from the Bank of Mauritius indicate that sales are IRS and RES villas that attract the lion's share of foreign direct investment. Some observers believe it is rather unproductive investments. But we must face the facts that not all RES projects that attract customers. The sector would have fared better with a 'spill-over positive in other areas, if we diversify our offerings and adopt innovative products.

To date, a sale or IRS RES is primarily in the off-plan method (sale completed Future State), and it must be accompanied by a guarantee of Future Completion (GFA). However, the GFA is expensive and represents an obstacle to development, according to some developers. They propose to find a new mechanism that both offers a warranty to the customer while avoiding a significant financial burden to the developer.

"Banks are reluctant to finance the construction, and developers do not have other alternatives. However, according to a developer, solutions exist, for example, modeled on the system of allocation and civil society can easily create a system suitable for RES projects. Proponents believe that Mauritius wants to target new international markets for our real products, but we do not offer these innovative products to attract customers.

"What's involved in different 'Property Show' around the world, when our offers are competitive? For example, by allowing the 'sectional' or 'fractional ownership', we will encourage more wealthy expatriates to come stay with us, so a boost for tourism. It is a fact that many will not be interested in buying a house alone, but they surely will in a 'fractional scheme', which allows them to have a foothold in many countries they visit the during the year. The fractional ownership also increase arrivals.

Education Hub

The tertiary sector is a growth area, with a projection of 100,000 students in less than 10 years, even if the image of our 'Knowledge Hub' somewhat splashed by recent scandals where foreign students seems he been fooled by recruiters across officers allegedly misleading advertising.

Instead, the industry wants to target students in the region first. But it seems that there has not been a comprehensive study on the sector in general, target markets and incentives to attract students factors. For example, student housing is a problem, because it is difficult to find suitable and affordable housing close to educational institutions. In terms of concept, we have forgotten the countries of the region following the French system. These countries have a great potential for us.

Frankie Tang, economist: "Our salvation is in the high speed internet"

For the economist Frankie Tang, better access to broadband internet revolutionize many sectors in Mauritius and cause a 'entrepreneurial boom'. "Access must become more affordable, and the quality of the connection is better. For now, the ICT sector with good growth in Mauritius, but unfortunately we are not trying to capitalize on this sector.

This would have created thousands of jobs. Do not forget that based on the digital economy has many positive impacts, such as reduced traffic congestion. In addition, the BPO sector should strive to attract to the back-office operations' major companies engaged in global financial services. It is a vast market and Maurice has the skills for it. I also argue that we must attract a critical mass of foreigners, whether professionals or students, to stimulate the economy, "he offers.

Recording rate RES Mauritians penalized

If, initially, the estate RES were intended mainly for foreign nationals, these properties also represent an average investment for Mauritians anxious to grow their wealth. However, a uniform registration fee to 25 000.00 dollars per villa, regardless of the value of sales, penalizes Mauritian customers, especially on properties sold at less than Rs 10 million.

For example, the recording of non-RES apartment sold at Rs 5 million fee is 5% or Rs 250,000. By cons, a well-RES hit the same value is a registration fee of Rs 750,000 (U.S. $ 25 000.00). Thus, it is an obstacle to the Mauritian investors wishing to acquire a well-RES for rental or resale. The ideal would have been to apply the existing rate of 5%.

Construction: Abolish VAT on materials?

The government's goal is to encourage every Mauritian family to his house under the program include a rooftop power you. ' But the prohibitive cost of construction slows the progression of housing, and this has a negative effect on the construction sector. One solution would be the abolition of VAT on building materials basis. Without the abolition, suspension of VAT, say for the next two or three years, would have been beneficial to the sector as the Mauritian families.

 

 

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