Mauritius – South Africa partnership: strong economic partners at crossroads
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As South Africa gears up to celebrate its 20th Freedom Day on April 27, the ties between Mauritius and South Africa, which have also reached the 20-year milestone since establishment of full diplomatic relations in 1994, are at a decisive turning point.
Exchanges in the trade corridor, while thriving with dynamism and reaffirming South Africa’s position as one of Mauritius’ largest trading partners, have been on a downward trend since last year. Exports from Mauritius to South Africa fell by 9.8 % in 2013, with Rs 6 billion worth of exports compared to Rs 6.69 billion in 2012. Imports from South Africa registered a contraction as well, with Rs 10.2 billion in 2013 against Rs 10.5 billion in 2012.
The investment sector was particularly affected, mainly due to uncertainty and ambiguity on the renegotiated Double Tax Avoidance Treaty linking the two countries scheduled to become effective from January 1, 2015, if ratified. In 2013, Foreign Direct Investment (FDI) inflows from South Africa to Mauritius totalledRs 1.49 billion only, compared to Rs 5.3 billion in 2012, thus ran-king as 3rd leading FDI investor in Mauritius as opposed to topping this list in 2012. Direct Investment from Mauritius to South Africa registered a fall as well, with Rs 37 million in 2013 as opposed to Rs 77 million in 2012.
The tourism sector contained its buoyancy however, with 94,208 tourist arrivals from South Africa (+5.8%) on the island and 25,693 Mauritian residents (+10.3%) travelling to the destination in 2013.
The uncertainty around the tax treaty a pressing issue
Richard Robinson, president of the South African Chamber of Commerce in Mauritius, which comprises a network of around 220 members, identifies the uncertainty around the tax treaty as a pressing issue. “Businessmen like certainty, and grey areas are not a very good environment to do business,” he states. According to him, improvement is required in some other areas as well in order to further boost business exchanges, such as ease of buying pro-perty for South African citizens or facilitation of the application for citizenship procedure for them in Mauritius. He also stresses on the need for more bilateral dialogue between the two economies...
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