Financial Sector: Oiling the economic machinery

Over the past two decades, the financial services has grown and contributed the financial services sector has shown rapid growth in the last two decades and contributed 10.3% to Mauritius economy’s GDP in 2014, with an annual growth rate of over 5%. From 1970s, Mauritius has successfully managed to adjust its focus in three decades to undertake a fundamental development of its financial services with the introduction of new legislation and the setting up of new institutions like MOBBA, Financial Services Commission, the Stock Exchange of Mauritius and the newly created Ministry of Financial Services and Good Governance. Nevertheless, in spite of the constant growth in financial services, Mauritius still faces a number of challenges in taking the financial services sector to the next level of development and in adequately responding to numerous demands from international investors.

[[{"type":"media","view_mode":"media_large","fid":"12717","attributes":{"class":"media-image size-full wp-image-20944 alignleft","typeof":"foaf:Image","style":"","width":"250","height":"227","alt":"Vishal-Rughoobur"}}]]Vishal Rughoobur: “The sector needs more diversification”

Economist Vishal Rughboobur explains that the financial sector took off in the year 90s. “At the start, we had sectors like manufacturing and textile, agriculture and exports. Then, with diversification, came the financial sector. It is in the year 1990s that this sector started to develop. It contributes highly to the Mauritian economy. For the past years, it has really performed well. Thus it can be said that it is a good performing sector and one of the most important sectors for the country,” he states. One of the main strength as highlighted by the economist is that the finance sector has existing workforce. “We do not lack workforce in this sector. And this represents an advantage for the sector. Besides, this sector has its own entrepreneurs who participate actively in developing this sector. So this sector will progress further,” he says. However, this sector has some weaknesses. The Economist points out that the sector has diversified in terms of activities but it needs more diversification in terms of markets and values. “Despite its evolution and diversification in certain areas, there are still more to be done. For example we are still very dependent on the treaties made with India. So there is a little amount of concern on this issue. It is now time to go beyond. Being a key sector, there should be regulations that promote good governance,” he adds. The economist states that this sector needs a new start. “The future of this sector depends on the contribution we make in the sector. Diversification is needed toward African countries. It will also depend on the training of new professionals as well as attracting new foreign direct investment,” he states.