Louis Clensy Appavoo : “The present business climate is sluggish”

Louis Clency Appavoo, Chief Executive of Appavoo Group and the founding member and Senior Partner of HLB Appavoo & Associates, recently published the “Doing Business Booklet.” In this interview, he informs us about the business climate prevailing in the country as well as how Mauritius can improve in ease of doing business.

You have recently published a book entitled “Doing Business in Mauritius.” What was the idea behind its publication?
This initiative forms part of our global network business philosophy, which requires its member firms to publish a ‘Doing Business Booklet’ for each specific country.  We generally update this publication every three years and this year is our latest edition. The booklet is aimed at putting together in a very concise manner the fundamental information about a country. We have taken the opportunity to include the latest measures announced in the last National Budget in this booklet, which makes it an up-to-date publication.

How is the current business climate in Mauritius?
The current business climate is ‘sluggish’. This means that there is no great effort being done to spur growth and economic well-being.  There seems to be a lot of focus on the ‘Metro Express’ project and many other projects, which can create economic wealth,  but they are not receiving the required attention. Now that we are approaching the end of year period, there is normally a lot of momentum but this year, business seems to stagnate and SMEs in particular are not predicting ‘good business outturn’ in December. If the country achieves its 3.7% economic growth this year, that would be an excellent record but for sure, we could have done better if there has been more focus on economic upheaval!

Do investors really look at business climate indicators to invest or are profits the sole attractiveness?
The economic climate is a key investment driver but it is now the only factor which serves to attract investment. We need to add some fundamental factors which investors look for: stable political and social environment, good governance, observance of the rule of law, sustainable economic growth, security at national level and of course, the expectations of creating economic wealth and profits. Investors would also look at what we call ‘Economic Fundamentals’ before forming an investment decision and these would include broadly: economic growth rate, rate of employment, crime rate, governance index classification, the strength of the local currency, and inflation.

We need to understand and analyse what other countries ahead of us are doing better than us to enable us to continue improving our performance and to enhance the economic, social and environmental well-being of our people as a nation.

For Doing Business 2018, in just one year Mauritius has progressed from 45th to 25th place. What factors could have played in favour of Mauritius?
This is the result of major reforms undertaken following the recommendations of the World Bank and which include waste water networking, business facilitation including export-driven initiatives, the simplification of the transfer of property with minimal registration duties and increase in service quality have contributed to make Mauritius win very good scores. For the 12th consecutive year, Mauritius has topped the African sub-Saharan list of countries and this gives us a very comfortable position which we need to maintain. While the ranking is an indicative measure of country performance, it should not be looked as an end in itself.

There is no time for complacency and Mauritius should not look at the countries behind it but those which are heading in the list.  We need to understand and analyse what other countries ahead of us are doing better than us to enable us to continue improving our performance and to enhance the economic, social and environmental well-being of our people as a nation.

What can be done to continue to improve or maintain our ranking?
Mauritius has the reputation of a well-managed and harmonious country based on the solid rock of democracy.  We have always lived into a very dynamic economic environment and as we say, Mauritians know how and when to re-invent themselves when faced with different challenges. We need to analyse why we cannot do as good as Singapore  or New Zealand, for instance, and identify those areas where we need improvement and on this front, we could add environmental challenges, improved infrastructure, reduction of employment and of acute poverty and of course,  new initiatives to develop and new economic models.

The Ocean Economy seems to take roots now that the World Bank has made its recommendations with a model adapted to our needs; there is actually a great upheaval in the ‘Knowledge Economy’ with the development of the ‘Smart City’ of the Medine Group and the Financial Sector is already on the move with new trends in Artificial Intelligence, Fintech, the advent of crypto money which will be a big challenge to existing banking systems, to name just a few areas of imminent development.

More efforts must be done to rethink our business models and adapt fully the new Code of Corporate Governance at the higher level of  business and administration including Public Sector and opt for ‘Integrated Reporting’ to give more credibility of our level of accountability, compliance and integration of the business community  with society.

Entrepreneurs still complain of lengthy bureaucratic procedures. What must be done to further streamline administrative hassles?
There has been a lot of progress in this area but there are definitely still certain areas which require improvement.  We are waiting for the implementation of the Economic Development Board, which is expected to streamline a lot of procedures and reduce bottlenecks and red tapes. The enhancement of ‘e-Government’ is seen as a serious step forward and we need to review our concept of a ‘one-stop shop’ to really make things happen. A close collaboration between the Private Sector and Government is essential to create a common platform which will iron our bottlenecks.

Mauritius is focusing on digitalisation of various services. Do you believe this can help us to better improve our way of doing business?
Digitalisation is inevitable if we want to improve our services and this applies to both the private and the public sectors.  The trend in modern technology will create a new revolution and business models are actually undergoing fundamental changes: procurement, sales, storage, service delivery, customer satisfaction and even the money market are all facing challenges and business in general will undergo important changes in the few years ahead.

When the Japanese are talking of a city which is virtually managed at 100% by ‘cloud technology’, or of the driverless and intelligent cars which will drive us to work while we read our emails, or still of Alibaba, the biggest e-commerce platform which sells to the whole world without a single store of goods. We understand the pace at which technology is running.

Mauritius is still in the starting block of those new challenges and more efforts need to be done to improve our policies to adapt to new trends and new technologies.  There is a need for a Master Plan on digitalisation which would see the private Sector and Government work on a common platform. The advent of ‘Blockchain’ will drastically change the way people do business today and the whole of the financial industry will be managed within a new and completely revolutionised technological infrastructure.

This Master Plan must include the Education of new technologies at different levels of our school and tertiary curricular, new policies to welcome foreign experts in our country, development of a Fintech Infrastructure and  the encouragement of ‘foreign start-ups’ to use our country as base.

Mauritius offers a lot of opportunities to young professionals whoshould not just look for ‘employment positions’. I fully support young entrepreneurs to take advantage of the various facilities Government has and is still putting in place.

But on the other hand, what are the drawbacks of online application services?
The drawbacks of on-line application services are threefold. First, cyber security, if not well managed, can damage and destroy a whole system. For example, we have seen how cyber-attacks can be damaging and the recent case of a massive fraud in a Saudi Bank is very telling, access to users to such facilities as not everyone is able to afford access to internet and broadband facilities at reasonable prices, as our access costs are still very high compared to other developing economies.
However, we should not look at ‘digitalisation’ as being a nightmare in itself, as it is the order of the day.  We must continue to enhance ‘on-line applications’, as it is a means to do away with bottlenecks, and also continuously improve our systems, facilitate more access to users and increase the level of cyber security at different levels.

What is your advice to young professionals who are willing to open a start-up?
Mauritius offers a lot of opportunities to young professionals who should not just look for ‘employment positions’. I fully support young entrepreneurs to take advantage of the various facilities Government has and is still putting in place. There exists also various ‘Angel investors’ in Mauritius who encourage young start-ups and who are also prepared to invest in new business ideas and render young entrepreneurs successful businessmen or businesswomen, At Appavoo Group, we act as ‘Angel Investors’ and we not only bring seed capital in new start-ups but we also share with them our ‘entrepreneurial vibes’ through mentoring, follow-up and strategic thinking and envisioning.