Economic Development overview: Mauritius
Since independence in 1968, Mauritius has developed from a low-income, agriculturally based
economy to a middle-income diversified economy with growing industrial, financial, and tourist
sectors. For most of the period, annual growth has been in the order of 5% to 6%. This
remarkable achievement has been reflected in more equitable income distribution, increased life
expectancy, lowered infant mortality, and a much-improved infrastructure. Sugarcane is grown
on about 90% of the cultivated land area and accounts for 25% of export earnings. The
government's development strategy centers on expanding local financial institutions and building
a domestic information telecommunications industry. Mauritius has attracted more than 9,000
offshore entities, many aimed at commerce in India and South Africa, and investment in the
banking sector alone has reached over $1 billion. Mauritius, with its strong textile sector, has
been well poised to take advantage of the Africa Growth and Opportunity Act (AGOA).1
“Mauritius has one of the highest standards of living in Africa. It enjoyed sustained growth of
more than 6 per cent in the 1990s and reached GDP per capita of $11 287 (in PPP terms) in
2003. The traditional engines of growth in Mauritius have been sugar, textiles, and tourism. More
recently, Mauritius has diversified into financial services and information and computer
technologies (ICT). Mauritius has one of the most competitive economies, ranked first in Africa,
and 23rd worldwide for its business activity facility. Mauritius is now a middle-income country as a
result of good economic performance, and ranks 65th in the world and second in Africa (after the
Seychelles) on the 2005 Human Development Index. The economic track record of Mauritius is
the product of its sound institutions, good level of human capital and preferential access to the
European Union (EU) market for its key exports.
However, since 2000, Mauritius has faced new challenges and its economic performance has
suffered, resulting from its loss of preferential access to the EU sugar and textile markets. In the
textile sector, Mauritius is facing increased competition from cheaper Chinese and other East
Asian country exports. These new constraints mean there is an urgent need to diversify the
Mauritian economy. The persistent budget deficits must be reduced. Moreover, labour market
and education reforms are prerequisites for absorbing the unemployed.
While the annual growth rate was on average above 6 per cent at the end of the 1990s, it has
fallen to a much lower level since 2000. Performance for 2005 is expected to be even lower at
3.1 per cent, 1.7 percentage points lower than in 2004. Indeed GDP grew by only 0.7 per cent in
the first quarter of 2005, as compared to 6.6 and 3.5 per cent in the first quarters of 2003 and
2004. Excluding sugar, the 2005 growth rate is expected to reach 3.6 per cent, compared to 4.2
per cent in 2004. The lower than expected growth rate is due to the poorer performance of the
four main economic sectors. First, sugar production in 2005 is expected to be around 520 000
tonnes, instead of 550 000 tonnes, because of the excessive rainfall in September 2005. While
the area under sugar cultivation has been falling between 2001 (73 196 hectares) and 2005 (68
883 hectares), sugar yield has also fallen from 79 to 72 tonnes per hectare over the same period.
Second, the export processing zone (EPZ) has contracted by 13 per cent due to the end of the
textile trade quotas in January 2005, coupled with competition from lowcost textile producing
countries. Third, the construction sector contracted by 3.7 per cent in 2005, mainly because of
delays in - or the non-execution of – several projects. Fourth, the non-EPZ manufacturing sector
grew by only 2.5 per cent as a result of increased competition from imported goods faced by
these domestic-oriented manufacturing industries.
The mixed picture of growth and
decline in the various economic
sectors has been associated with
increased unemployment. This
combined with inflationary
pressures has weighed heavily on
household incomes. Consequently,
growth in private consumption
slowed from 12 per cent in 2004 to
9 per cent in 2005 and is not
expected to recover much in 2006
or 2007. Meanwhile growth in
private investment slowed as well. Deterioration in the balance of payments on goods and non-
factor services as expressed in constant prices has also depressed growth in 2005, while the
stance of fiscal policy has been mildly expansionary. Thus, GDP growth is expected to decline
from 4.3 per cent in 2004 to 3.1 per cent in 2005 and to exhibit little recovery in 2006 and 2007.
The public finance situation is quite bleak; initial measures taken by the incoming government
will not help reduce the budget deficit but will rather exacerbate it. In 2005 the new government
quickly implemented two of its electoral promises, which will probably increase current
expenditure in an ongoing way. The first promise was to grant free bus transportation to all
pensioners (i.e. all those over 60) and students. While pensioners can use all buses for free, to
travel anywhere, students enjoy free transportation between their places of residence and their
The free public transport programme is expected to cost approximately 600 million rupees per
year. The subsidies are not paid to students, but to bus owners, who receive 11 000 rupees per
day, per bus, irrespective of the number of students they actually transport. The second promise
was to re-establish universal old-age pensions to all those aged over 60. The previous
government changed old-age pensions criteria from being universal to means-tested, whereby all
those with earnings above a specified threshold received no oldage pension. The new
government reinstated universal pensions as soon as it assumed power. As a result of its
recurrent budget deficit, Mauritius has been resorting to increased public borrowing over the last
five years and rolling over interest payments in the form of deferred Treasury notes. Public debt
(and the interest servicing burdens this imposes) is now approaching levels where room for
maneuver is highly constrained.”2
Each year since 1990 the Human Development Report has published the human development
index (HDI) that looks beyond GDP to a
broader definition of well-being. The HDI
provides a composite measure of three
dimensions of human development: living
a long and healthy life (measured by life
expectancy), being educated (measured
by adult literacy and enrolment at the
0.800 primary, secondary and tertiary level)
0.700 and having a decent standard of living
Mauritius HDI 1980-2003
0.600 (measured by purchasing power parity,
PPP, income). The index is not in any
sense a comprehensive measure of
0.400 human development. It does not, for
0.300 example, include important indicators
0.200 such as inequality and difficult to
0.100 measure indicators like respect for
human rights and political freedoms.
1980 1985 1990 1995 2000 2003
What it does provide is a broadened
prism for viewing human progress and
the complex relationship between income
Mauritius has one of the highest standards of living in Africa. Mauritius has one of the most
competitive economies, ranked first in Africa, and 23rd worldwide for its business activity facility.
Mauritius is now a middle-income country as a result of good economic performance, and ranks
65th in the world and second in Africa (after the Seychelles) on the 2005 Human Development
Index. The economic track record of Mauritius is the product of its sound institutions, good level
of human capital and preferential access to the European Union (EU) market for its key exports.
More responsibilities have been divested to other levels of government. In that regard, it is
noteworthy that more administrative independence has been granted to Rodrigues Island,
located 560 km east of Mauritius with a population of nearly 35 000. For some time, the
inhabitants of this small island had been asking for greater autonomy from Mauritius. In
summary, the long-term challenges facing Mauritius are daunting. The trade preferences and
market protection on which Mauritius has built its success are being eroded. The elimination in
December 2004 of the global quotas on clothing under the Multi- Fibre Arrangement has exposed
the local textile sector to competition from other exporting countries, including those in Asia and
South America. Finally, the new EU Sugar Protocol and future multilateral liberalisation will
probably reduce the profitability of the Mauritian sugar industry. A complete reappraisal of the
role of the government and a greater opening of local markets are required for Mauritius to
regain the growth rate it achieved in the 1990s. 4
The HDI measures the average progress of a country in human development. The Human
Poverty Index for developing countries (HPI-1), focuses on the proportion of people below a
threshold level in the same dimensions of human development as the human development index
- living a long and healthy life, having access to education, and a decent standard of living. By
looking beyond income deprivation, the HPI-1 represents a multi-dimensional alternative to the
$1 a day (PPP US$) poverty measure.
The HPI-1 measures severe deprivation in health by the proportion of people who are not
expected to survive age 40. Education is measured by the adult illiteracy rate. And a decent
standard of living is measured by the unweighted average of people without access to an
improved water source and the proportion of children under age 5 who are underweight for their
age. The HPI-1 value for Mauritius, 11.3, ranks 24th among 102 developing countries for which
the index has been calculated.5
Selected indicators of human poverty for Mauritius
Human Poverty Index Probability of not surviving past age Adult illiteracy rate Children underweight for age
(HPI-1) 40 (%ages 15 and older) (% ages 0-5)
2004 (%) 2004 2004
1. Uruguay (3.3) 1. Hong Kong, China (SAR) (1.5) 1. Cuba (0.2) 1. Chile (1)
22. Brazil (10.1) 52. Qatar (4.7) 67. Bahrain (13.5) 73. Albania (14)
23. Suriname (10.3) 53. Tunisia (4.7) 68. Namibia (15.0) 74. Guyana (14)
24. Mauritius (11.3) 54. Mauritius (5.0) 69. Mauritius (15.6) 75. Mauritius (15)
25. Peru (11.6) 55. Argentina (5.0) 70. South Africa (17.6) 76. Sudan (17)
26. China (11.7) 56. Tonga (5.0) 71. Lesotho (17.8) 77. Haiti (17)
102. Mali (60.2) 172. Swaziland (74.3) 117. Mali (81.0) 134. Nepal (48)
The HDI measures average achievements in a country, but it does not incorporate the degree of
gender imbalance in these achievements. The gender-related development index (GDI),
introduced in Human Development Report 1995, measures achievements in the same dimensions
using the same indicators as the HDI but captures inequalities in achievement between women
and men. It is simply the HDI adjusted downward for gender inequality. The greater the gender
disparity in basic human development, the lower is a country's GDI relative to its HDI. Mauritius’s
GDI value, 0.792 should be compared to its HDI value of 0.800. Its GDI value is 99.0% of its HDI
value. Out of the 136 countries with both HDI and GDI values, 82 countries have a better ratio
The GDI compared to the HDI – a measure of gender disparity
Life expectancy at birth Adult literacy rate Combined primary, secondary and
GDI as % of HDI (years) (% ages 15 and older) tertiary gross enrolment ratio
2004 2004 2004
- Female as % male Female as % male Female as % male
1. Luxembourg (100.4 %) 1. Russian Federation (122.4 %) 1. Lesotho (122.5 %) 1. United Arab Emirates (126.0 %)
81. Indonesia (99.0 %) 32. Armenia (109.9 %) 64. Zimbabwe (92.0 %) 117. São Tomé and Principe (98.5 %)
82. Nigeria (99.0 %) 33. Korea, Rep. of (109.8 %) 65. Singapore (91.8 %) 118. Albania (98.3 %)
83. Mauritius (99.0 %) 34. Mauritius (109.8 %) 66. Mauritius (91.1 %) 119. Mauritius (98.2 %)
84. South Africa (99.0 %) 35. Korea, Dem. Rep. (109.8 %) 67. Occupied Palestinian Territories (91.0 %) 120. China (97.9 %)
85. Samoa (Western) (99.0 %) 36. Croatia (109.7 %) 68. China (91.0 %) 121. Malawi (97.9 %)
136. Yemen (94.0 %) 191. Kenya (95.8 %) 115. Afghanistan (29.2 %) 189. Afghanistan (40.9 %)
Economic Impact of HIV/AIDS
Given the exceedingly low incidence of HIV/AIDS in Mauritius and early government action there
were measures in place before the first cases of HIV there are no real negative economic
impacts. No literature has covered this but given the low incidence and the otherwise positive
state in human development these are likely positive economic impacts particularly with regards
the important tourist industry and to a lesser extent in attracting FDI.
Statistics and Information Tables
Economy of Mauritius7
Currency Mauritian rupee (MUR)
Fiscal year 1 July - 30 June
Trade organisations WTO, COMESA, SADC and others
GDP (PPP) $15.73 billion (2005 est.) ()
GDP growth 2.5% (2005 est.)
GDP per capita $12,800 (2005 est.)
GDP by sector agriculture (5.9%), industry: (29.8%), services: (64.3%) (2005
Inflation (CPI) 5% (2005 est.)
Pop below poverty line 10% (2001 est.)
Labour force 570,000 (2005 est.)
Labour force by agriculture and fishing (14%), construction and industry (36%),
occupation transportation and communication (7%), trade, restaurants,
hotels (16%), finance (3%), other services (24%) (1995)
Unemployment 9.6% (2005 est.)
Main industries food processing (largely sugar milling), textiles, clothing,
chemicals, metal products, transport equipment, nonelectrical
Exports $1.949 billion f.o.b. (2005 est.)
Export goods clothing and textiles, sugar, cut flowers, molasses
Main partners UK 32.3%, France 20.7%, US 11.7%, Madagascar 6.2%, Italy
Imports $2.507 billion f.o.b. (2005 est.)
Imports goods manufactured goods, capital equipment, foodstuffs, petroleum
Main Partners France 12.1%, South Africa 11%, India 7.2%, Finland 6.1%,
China 6%, Germany 5.3%, Bahrain 5.2%, Singapore 4.1%
Public debt $3.246 billion (67.5% of GDP) (2005 est.)
Revenues $1.377 billion (2005 est.)
Expenses $1.77 billion; including capital expenditures of $NA (2005 est.)
Economic aid $42 million (1997)
Mauritius UNDP Stats
Total population (millions) 2015 1.3
Annual population growth rate (%)
Urban population (% of total) 2015 47.3
Population under age 15 (% of total) 2015 21.3
Population age 65 and above (% of total) 2015 8.3
Official Development Assistance
Official development assistance (ODA) received (net 2003 -15.1
disbursements) Total (US$ millions)
Official development assistance (ODA) received (net 2003 -12.4
disbursements) Per capita (US$)
Official development assistance (ODA) received (net 1990 3.7
disbursements) (as % of GDP) 2003 -0.3
Access to sanitation and water source
Population with sustainable access to improved sanitation (%) 2002 99
Population with sustainable access to an improved water source 1990 100
(%) 2002 100
Life Expectancy at Birth (years) (HDI) 2003 72.2
Infant Mortality Rate (per 1,000 live births) Bottom quintile .. ..
Infant Mortality Rate (per 1,000 live births) Top quintile .. ..
Under Five Mortality Rate (per 1,000 live births) Bottom quintile .. ..
Under Five Mortality Rate (per 1,000 live births) Top quintile .. ..
Probability at birth of not surviving to age 40 (% of cohort) 2000-2005 5
Probability at Birth of Surviving To Age 65, Female (% of cohort) 2000-2005 80.9
Probability at Birth of Surviving To Age 65, Male (% of cohort) 2000-2005 66.9
GDP per capita (PPP US$) (HDI) 2003 11,287
Adult Illiteracy Rate (% ages 15 and above) 2003 84.3
Inequalitiy Measures - Gini Index .. ..
Inequalitiy Measures Ratio of richest 10% to poorest 10% .. ..
Inequalitiy Measures Ratio of richest 20% to poorest 20% .. ..
Survey Year ..
Population living below $1 a day (%) 1990-2003 ..
Population living below $2 a day (%) 1990-2003 ..
Population living below the national Poverty line (%) 1990-2002 10.6
HIV Prevalence (% ages 15-49) 2003 ..
Condom Use at Last High Risk Sex (% ages 15-24) women .. ..
Condom Use at Last High Risk Sex (% ages 15-24) men .. ..
Malaria Cases (per 100,000 people) 2000 1
Tuberculosis cases per 100,000 people) 2003 136
Public expenditure on education (% of GDP) 2000-2002 4.7
Public expenditure on health (% of GDP) 2002 2.2
Military expenditure (% of GDP) 2003 0.2
Total deby service (% of GDP) 2003 4.5
Commitment to health: resources, access and services
Public Health Expenditure (% of GDP) 2002 2.2
Private Health Expenditure (% of GDP) 2002 0.7
Health Expenditure per capita (PPP) 2002 317
Contraceptive pervalence rate (%)
Births attended by skilled health personnel (%)
Physicians (per 100,000 people)
World Bank Development Indicators Mauritius
2000 2004 2005
Population, total 1.2 million 1.2 million 1.2 million
Population growth (annual %) 1.1 1.0 1.1
Life expectancy at birth, total (years) 71.7 72.7 ..
Fertility rate, total (births per woman) 2.0 2.0 ..
Mortality rate, infant (per 1,000 live births) 15.8 14.0 ..
Mortality rate, under-5 (per 1,000) 18.1 15.2 ..
Births attended by skilled health staff (% of total) 99.7 99.2 ..
Malnutrition prevalence, weight for age (% of children
.. .. ..
Immunization, measles (% of children ages 12-23
84.0 98.0 ..
Prevalence of HIV, total (% of population ages 15-49) .. .. 0.6
Primary completion rate, total (% of relevant age
104.7 99.7 97.4
School enrollment, primary (% gross) 105.3 102.8 102.2
School enrollment, secondary (% gross) 77.6 85.4 88.4
School enrollment, tertiary (% gross) 7.5 17.2 ..
Ratio of girls to boys in primary and secondary
98.2 99.6 99.6
Literacy rate, adult total (% of people ages 15 and
.. 84.4 ..
Surface area (sq. km) 2,040.0 2,040.0 2,040.0
Forest area (sq. km) 380.0 .. 370.0
Agricultural land (% of land area) 55.7 .. ..
CO2 emissions (metric tons per capita) 2.4 .. ..
Improved water source (% of population with access) .. 100.0 ..
Improved sanitation facilities, urban (% of urban
.. 95.0 ..
population with access)
GNI, Atlas method (current US$) 4.4 billion 5.7 billion 6.6 billion
GNI per capita, Atlas method (current US$) 3,740.0 4,640.0 5,260.0
GDP (current US$) 4.5 billion 6.0 billion 6.4 billion
GDP growth (annual %) 4.0 4.4 4.5
Inflation, GDP deflator (annual %) 3.6 5.9 5.6
Agriculture, value added (% of GDP) 6.0 6.2 6.1
Industry, value added (% of GDP) 31.2 29.7 28.1
Services, etc., value added (% of GDP) 62.8 64.1 65.8
Exports of goods and services (% of GDP) 62.7 55.6 53.4
Imports of goods and services (% of GDP) 64.7 56.2 56.6
Gross capital formation (% of GDP) 25.9 24.2 24.0
Revenue, excluding grants (% of GDP) 22.3 22.5 ..
Cash surplus/deficit (% of GDP) -1.1 -3.1 ..
States and markets
Time required to start a business (days) .. 46.0 46.0
Market capitalization of listed companies (% of GDP) 29.8 39.4 40.6
Military expenditure (% of GDP) 0.2 0.2 0.2
Fixed line and mobile phone subscribers (per 1,000
388.3 699.9 ..
Internet users (per 1,000 people) 73.3 145.8 ..
Roads, paved (% of total roads) 97.0 .. ..
High-technology exports (% of manufactured exports) 1.0 4.5 ..
Merchandise trade (% of GDP) 81.7 78.9 82.4
Net barter terms of trade (2000 = 100) 100.0 88.7 ..
Foreign direct investment, net inflows (BoP, current
266.0 million 13.9 million ..
Long-term debt (DOD, current US$) 952.9 million 940.9 million ..
Present value of debt (% of GNI) .. 42.7 ..
Total debt service (% of exports of goods, services and
18.2 7.4 ..
Official development assistance and official aid (current
20.5 million 37.9 million ..
Workers' remittances and compensation of employees,
177.0 million 215.0 million ..
Source: World Development Indicators database, April 2006
OECD/AFDB. 2006 Africa Economic Outlook 2005-6.SouthAfrica . At