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Friday, 11 January 2013 12:00

H.E. Dr Nomvuyo N. Nokwe : “South Africa and Mauritius are complementary, not competing economies“

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South Africa is today a major trade and economic partner of Mauritius, with South Africans investing heavily in various sectors of the economy such as banking and finance, retail, ICT, real estate, manufacturing, agribusiness, logistics, among others.
Relations between South Africa and Mauritius were formalised in 1992 with the establishing of Representative Offices in both countries. Full diplomatic relations were established in 1994. Upon South Africa's return to the Commonwealth, relations have been conducted at the level of High Commission. There are no Visa Requirements for South Africans visiting Mauritius. H.E. Dr Nomvuyo Nontsikelelo Nokwe, High Commissioner of South Africa in Mauritius since 14 May 2012, talks to News on Sunday about South African investment in Mauritius, the country’s business climate and the wrong perception about South Africans buying up all our land.

Ever since the opening of Mauritius to the world in 2006, we have had lots of South African citizens choosing to settle in this country or to do business here.  What according to you are the main factors that attract South Africans to our shores?
It is commendable for Mauritius to embark on multi sector reform in 2006 with the main objective being improving the competitiveness of its economy. The marketing strategy, over the past 6 years contributed to successfully attracting South Africans, to our shores. This also coincided with one of the defining features of post-apartheid: South Africa being reinstated into the international Community, the economic liberalisation and deregulation of South Africa exchange controls that are applicable to South African citizens who want to invest elsewhere, especially into SADC countries. This saw South African business companies seizing the opportunity to expand into the African continent. What is favourable for SA business/firm are not only your tax legislation as the main drivers for doing business in Mauritius but the many investment opportunities that are on offer across a number of sectors in Mauritius, which they find attractive, as the yearly FDI figures of Mauritius show.

South African FDI into Mauritius over the past six years have grown significantly to just over 3 billion Rupees per year, making it the largest single investor into Mauritius and it is becoming evident to the general public as well through South Africa shopping complexes, retail stores, fast food brands, banks and a plethora of other South African companies having sprung up all over the island, not to mention hotels and other property developments. South African businesses and its investors here have become employers of a significant number of skilled and lesser skilled Mauritians in just about all areas of the economy. South African business persons almost always go into joint ventures with local partners, and as such have become true development partners and transferring skills and know-how to their partners and at the same time also learning from their Mauritian partners.

There is however a misconception in Mauritius that there is a huge number of South African living in Mauritius. We regularly hear the unbelievable figure of 20 000 being mentioned. This is far from the truth since according to the Mauritian Immigration figures there are less than 1000 in total living on the Island, most of whom are on temporary (short term )permits. This figure includes family members.

How do you find the business climate in Mauritius?
When we talk to the South African community who have invested here, as well as those working in Mauritius as professionals, it is clear that, in general, they are happy. They mentioned that the assistance rendered by the Board of Investment when they originally invested, was most helpful and made the process of establishing themselves in Mauritius as painless as possible. However the community did raise a number of concerns over the past years, which the High Commission did discuss with the government, and as such, some of the concerns were addressed. There are however a few exceptions, where South African investors have run into major problems with ‘’local’’ partners and lost significant amounts of money in the process. In most of these cases the investors mentioned that certain Mauritian legal processes are particularly unhelpful in resolving the issues amicably and as soon as possible, if at all.

Are you one of those who think Mauritius is the gateway to Africa, the bridge between Asia and the ‘Black’ Continent?
Just a quick correction, Africa is a great continent of aspiration, hope and opportunity as an ever increasing number of investors from all over the world are discovering. It’s not a ‘black’ continent. In Africa there is a number of countries who position themselves as ‘gateways’ to Africa. South Africa and Mauritius are but two such countries. It is encouraging that Mauritius is looking to Africa to expand its business. For a long time Mauritius mainly focused on its traditional markets in Europe and India. Things are now changing.

Africa is now mother to most of the fastest growing economies in the world (be it from low bases or not), and this is expected to remain the case for the foreseeable future. International fund managers in Mauritius, with their ever-growing pools of funds available, are not blind to this and have begun to increase holdings in African businesses and other investments on the continent. To be a successful ‘gateway’ to Africa, it is absolutely imperative that Mauritian business persons understand Africa well. To achieve such understanding one has to get out there and spend some time on the continent, learning its ways and experiencing its vast cultures. South Africa and Mauritius are complementary and not competing countries.

There is a general perception in Mauritius that foreigners, especially South Africans, are buying up all our lands and villas and creating no-go areas in some regions, where they tend to concentrate. What is your opinion on this?
We believe that this ‘perception’ is rather unfair. Firstly you need to understand that South Africans do not have a culture of renting property for any extended period of time, if they can in any way afford to rather own a property. The same goes for apartments, by the way. They absolutely won’t live in them for any long period of time, if it can be avoided at all. Mauritian legislation does not allow any foreigner to buy a house wherever they want. Foreigners, as such, may only own a freestanding house of villa within an Integrated Resort Scheme or Real State Scheme, which inevitably is some kind of gated community.

This legislation doesn’t exclude Mauritians from buying these properties should they wish. Since most IRS or RES properties are however concentrated in a few areas in Mauritius, the unintended consequence of this restrictive legislation is the creation of regions with much higher concentrations of foreigners than is generally the case in the rest of Mauritius. Needless to say entrepreneurial local Mauritian business persons quickly learned what these foreigners prefer, be it foodstuffs in supermarkets or lots of red meat on menu, and cater for this.  A handful of Mauritian bar and restaurant owners in these areas also realised a large part of their customers love to watch rugby instead of football, and promptly switched their TVs to rugby channels to the ire of the local football watchers, who then unfortunately started to label those very few establishments as ‘no-go’ areas. I must point out that the perception of ‘concentration’ is wrong, as the property buyers are simply abiding by current property legislations and schemes. However, with regards to the rental market, South African tenants are everywhere over the island, mixing with the local population.

One of the main reasons that South Africans give for choosing to set up residence here is the rising crime rate in their home country. Some then claim that the situation is no better here. Is crime occurrence a real scourge in your country?
South Africa is a huge country with more than 54 million people with stark disparities in incomes, as you are probably aware. In the early 2000s the country went through a rather bad spell with crime rate figures peaking. Unfortunately some cities got a bad name during this time, and although crime figure in these cities have dramatically dropped since then, the damage to their reputations will take time to fix.

However, we have managed to organize big international events, such as the World Cup and COP 17, with no incident at all. One of our government’s key priorities is to bring the crime rate down, and strategies are being a success. No country is immune to criminal elements, and Mauritius is no exception. From my limited experience here, the Mauritian police are doing rather well in trying to stop criminality, but you just can’t be everywhere all the time, so yes some of our citizens have unfortunately fallen victim to such elements here, but nothing extraordinary.

How do you find the role of Mauritius in regional blocs such as SADC and COMESA in the near future?
Mauritius straddles both SADC and COMESA and as you are aware these two economic blocks are moving ever closer to regional integration, which will ultimately form a significant economic development block. The fact that Mauritius had to adapt its administrative processes and customs of both these economic blocks already, could be of great help should Mauritius use this knowledge to show out the synergies that already exist, and thus need little adjustment from either side, and also highlight the possible major differences that would need attention before such integration will be achieved.

Mauritian businesses should not, in anyway, fear a more regional integrated economy, since it will truly bring them more opportunities than risks. Just look at the recent Mauritius Export figures that clearly show an increase of more than 36% of Mauritian exports to South Africa. The High Commission strongly encourages Mauritian business to more fully exploit the free-trade agreement and go seek the trade opportunities in South Africa. We would really like to see a more balanced trade relationship.

How can we develop further synergies between Mauritius and South Africa to boost socio-economic exchanges?
There are already significant socio-economic exchanges between our two countries, which are unfortunately seldom highlighted in any media. One example is the very large number of Mauritian students that have over the years chosen to study in South Africa. The High Commission so far this year has issued more than 1500 study permits to new students, but expects that figure to rise to more than 2000 by end February 2013, once the HSC results are known. Youth exchange programmes between our two countries are mutually beneficial. Also, South Africa offers a number of scholarships to SADC students, including Mauritians. One key aspect is that SADC students pay ‘home’ university fees unlike foreign students from elsewhere. There is also good collaboration in the medical field.

Mauritius is one of South Africa’s partners in the Square Kilometre Array Radio Telescope-or SKA- which will be the world’s biggest telescope – and one of the biggest scientific projects –ever!  Radio-astrology...wow! That is now an exciting new field for our two countries to work more closely on.

The possibilities for collaboration is really only limited by imagination. The Mauritius government, for example is trying to ensure food security for Mauritians, and because land is a major constraint in Mauritius, has negotiated with the government of Mozambique to make a large track of land available for this purpose. I’m speaking under correction, but as far as I know mainly Sugar Cane growers have taken up portions of that land, little to no food crops are grown so far. What stops enterprising Mauritian farmers from forming joint ventures with South African farmers, and jointly exploiting the farming opportunities in Mozambique, and so bring-about the food security the government is looking to achieve? Indeed, South African farmers are renowned for quality produce and are highly experienced in dry land farming, something we can share with Mauritius. We also very advanced in aquaculture, a sector being promoted here.

Governments should really just be facilitators where necessary; it is the business people, artists, academics, youths, cultural organisations and sports persons that truly develop the real relationships between the two countries. I am really encouraged to see that Mauritians are starting to rediscover the links to Africa, and showing us on the mainland, that Mauritius is so much more than just a honeymoon island.
Shaffick Hamuth

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