Download Interview With James Benoit In STEP Journal

FOCUS ON
Africa, India
and the UAE
GATEWAY TO AFRICA
James Benoit discusses why Mauritius is the ideal
platform for investments into Africa
in Africa and deservedly ranked the best
sub-Saharan economy for ease of doing
business by the World Bank,2 Mauritius is
making a huge impact in overseas markets,
with positive spill-over effects in the
Africa-Asia trade corridor.
AFRICA IS THE continent with the world’s fastest
growing population, and in the next decade its
gross domestic product is expected to rise by
an average of six per cent a year.1 Africa’s growth
story and the predictions that it will outpace
the Asian economy are now convincing Afropessimists to revise their opinions and recognise
the value and potential of this region, now dubbed
‘the hopeful continent’.
There are many reasons to invest in
Africa, including increasing foreign direct
investment (FDI) flows, impressive growth of
GDP and the continent’s vast natural resources.
Organisations support this vision of Africa and
many have been using Mauritius as a window
for offshore investment.
High economic standards
Despite various worldwide fiscal crises, Mauritius
has maintained an excellent economic record.
The island was ranked first in the African region
and 19th globally in the World Bank Ease of Doing
Business 2013 survey. The island benefits from
an ideal ranking in Africa from several indexes,
showing that it provides a solid platform for
outward investments. Mauritius is ranked first
in Africa by the Forbes survey of Best Countries
for Business 2011 and second in the Africa
Competitiveness Index 2011.3 China and India
are already using Mauritius as a jurisdiction
of choice for investment holding companies
in banking and treasury management, and as
a base for key professional staff doing business
across Africa.
An ideal platform
Mauritius is situated 2,000 kilometres off the
southeast coast of the African continent and
has ideal characteristics to act as a platform
for outward investments. Its geographical
position and strategic time zone within
African working hours allow Eastern and
Western countries to perform timely business
transactions. It is a bilingual country, allowing
ease of communication with an understanding
of African cultures. It is easily accessible, with
frequent air links to major Asian, African and
European countries.
Mauritius has long been the trusted investment
route and is the centre for offshore financial
services and banking in the southern hemisphere.
Boasting an excellent business environment
Network of treaties and agreements
JAMES BENOIT IS CEO
OF AFRASIA BANK
Mauritius is long-established as a leading
banking intermediary for foreign investment
into India, due to close cultural ties with
the subcontinent and favourable doubletaxation agreements. Over the past decade,
it has administered more than USD50 billion
in FDI flows to India and holds about 40 per
cent of global FDI flow to India. Mauritius
“Mauritius is making a huge impact in overseas markets,
with positive spill-over effects in Africa and Asia”
INDEX
Global Rank (Mauritius)
Africa Rank (Mauritius)
Environmental Performance Index 2010
6th out of 163 countries
1st
2012 Heritage Foundation Index of Economic Freedom
8th out of 183 countries
1st
Fraser Institute, Economic Freedom of the World 2011
9th out of 141 countries
1st
Forbes, Best Countries for Business 2011
19th out of 134 countries
1st
World Bank, Ease of Doing Business 2013
19th out of 185 countries
1st
Economist Intelligence Unit, Democracy Index 2010
Full democracy; 24th out of 167
1st
World Economic Forum, Global Enabling Trade Report 2012
36th out of 132 countries
1st
Knowledge Economy Index
62nd out of 145 countries
1st
Mo Ibrahim Index of African Governance 2012
Figure 1: International benchmarks for Mauritius
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1st for the 6th consecutive year
SOURCE: BOARD OF INVESTMENT MAURITIUS
JULY 2013
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FOCUS ON
Africa, India
and the UAE
38 doubletaxation
avoidance
treaties
16 investment
promotion and
protection
agreements
Member of
COMESA
Figure 2: Network of
treaties and regional
trade organisations
ADVANTAGES
OF USING
MAURITIUS
Member
of SADC
Member
of AGOA
“Mauritius remains the main contributor to the
hope that the African continent can bring”
1 The Economist;
2
3
4
5
International
Monetary Fund
World Bank Ease
of Doing Business
2013 survey
Mauritius Board
of Investment
The treaties currently
in force with African
countries are with:
Botswana, Swaziland,
Lesotho, Uganda,
Mozambique,
Zimbabwe, Namibia,
Tunisia, Rwanda,
Zambia, Senegal, Nigeria,
Seychelles, Kenya, South
Africa and Madagascar
United Nations
Conference on Trade
and Development
has developed strong economic and cultural
ties with Africa and Asia over the years, and
is becoming increasingly well-known and
used as a trade and financial gateway to these
continents. Furthermore, Mauritius has
established tax treaties with 16 African
states and is party to a series of treaties
under negotiation.4
Mauritius offers numerous fiscal advantages.
It taxes all companies at a rate of 15 per cent
and has an extensive network of double-taxationavoidance treaties. The treaties signed by
Mauritius are based on the OECD model and
work by limiting or eliminating tax in the source
country and reducing the withholding taxes
on income received by the Mauritius-based
investors. It has flat investment promotion and
protection agreements (IPPAs) with 16 African
countries (with effective tax credit for certain
types of companies), providing for free repatriation
of investment capital and returns, guarantee
against expropriation, and compensation for
losses in case of war, armed conflict or riot. The
IPPAs further provide arrangements for the
settlement of disputes between investors and
contracting states.
Mauritius has preferential market access to
the following economic areas: the EU, under the
Cotonou Agreement, creating opportunities for
investment, creation of workforce and increasing
international competitiveness; the US, under
the African Growth and Opportunity Act (AGOA),
allowing duty-free access to the US markets for
more than 7,000 products; and Africa, under the
Common Market for Eastern and Southern Africa
(COMESA), which eliminates customs duties on
imports, and the Southern African Development
Community (SADC).
There are many advantages to investing through
Mauritius, including:
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•
•
•
•
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Availability of legal, accounting and finance
professionals in addition to highly credible banking
institutions with global links.
Guaranteed political stability, ensuring a parliamentary
democracy according to the Westminster model.
Modern legislation and effective regulation, with a
system based on a hybrid of French and English laws.
Strong and diversified economy with well-developed
communications infrastructure.
Membership of the African Union and the Indian
Ocean Rim Association for Regional Cooperation,
which provide exemptions from custom duties on
goods and equipment traded among member countries.
An OECD whitelisted jurisdiction.
No exchange control, and free repatriation of profits
and capital.
From emerging continent
to a developed continent
A few years ago, Africa’s ability to sustain its
momentum was questioned. Today Africa is
keeping true to the predictions and assumptions
of Afro-optimists, and is well on its way to writing
an unflinching success story and becoming the
driver of the growing BRIC economies.
As forecasts are noting increases in FDI
and GDP of Africa,5 Mauritius remains the
main contributor to the hope that the African
continent can bring in terms of the global economy
and capital markets.
Africa’s growth is a promise. It is a reminder
of the transformative potential of growth that
any skilled economist cannot deny. With the
opportunities that lie ahead, as we embark
on a new decade of change, it is essential to
gain economic presence and conquer these
new markets. Mauritius is the ideal regional
international finance centre for fulfilling this
promise and aiding the economic development
of Africa. JULY 2013
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