Mauritian manufacturers’ call for help

Local manufacturers have put together a list of measures which they believe will help save them from the bleak future ahead. Those measures could form part of the next budget. Here is in essence what members of the AMM are asking for through their Budget Memo.

[[{"type":"media","view_mode":"media_large","fid":"17655","attributes":{"class":"media-image wp-image-29998 alignleft","typeof":"foaf:Image","style":"","width":"227","height":"170","alt":"productive-equipment"}}]]Support the modernisation of productive equipment

In addition to the savings rate which has drastically decreased, the domestic investment rate went down from 25% in 2007 to 17.8% in 2015 – a level which is inadequate in relation to our ambition to become a top income country. The goal is to release the untapped potential for growth through targeted fiscal measures namely tax credit on equipment, leasing at preferential rates and tax refund of VAT on productive equipment (measure exists for the textile and which extended to the entire industry will be likely to relieve the cash flow of industrial enterprises and SMEs). Regarding the impact on employment, the Dual Training Program in this respect is a solution that deserves to be extended.

[[{"type":"media","view_mode":"media_large","fid":"17656","attributes":{"class":"media-image wp-image-29999 alignleft","typeof":"foaf:Image","style":"","width":"236","height":"132","alt":"innovation"}}]]Create an ecosystem favourable to innovation and R&D

Zeroing in on income derived from assets related to intellectual property (patents, trademarks, designs, etc.) would give Mauritius a real competitive advantage to attract a new generation of investors in leading sectors and small industries. Mauritius must ratify the Madrid Convention, adhere to the Hague System for the International Registration of Industrial Designs and the Lisbon System for the International Registration of Appellations of controlled origin (food & beverage). This would allow the local industry to specialise in niche products that will put forward our local and tropical identity.

[[{"type":"media","view_mode":"media_large","fid":"17657","attributes":{"class":"media-image wp-image-30000 alignleft","typeof":"foaf:Image","style":"","width":"290","height":"136","alt":"trade"}}]]Towards an original way: Open protectionism

The 2006 open trade policy should now be re-evaluated in terms of its real impact. Indeed, 65% of local manufacturers are adversely impacted by imports. As our country has many disadvantages such as geographical remoteness, high energy dependence, lack of connectivity (air, sea and digital), the AMM call for the introduction of an Equity Duty. The AMM also demands a State grant of Rs 10 million over three years to promote the “Made in Moris” brand. The AMM also requests a ‘Buy Mauritian Act’ or ‘responsible local purchase’.

[[{"type":"media","view_mode":"media_large","fid":"17658","attributes":{"class":"media-image wp-image-30002 alignright","typeof":"foaf:Image","style":"","width":"105","height":"137","alt":"ease-of-doing-business"}}]]Improving the ‘Ease of Doing Business’

According to data, the deadline for a manufacturing company to be operational is almost eight months. As to the sequence of procedures between the various public institutions and ministries, an econometric forecast of the MCCI says, all things being equal, a reduction of relative costs regulations for starting a business from 2.1% to 1.1% of income per capita could increase our GDP of more than 50 million US dollars and additional 0.4 points growth.

[[{"type":"media","view_mode":"media_large","fid":"17660","attributes":{"class":"media-image wp-image-30004 alignleft","typeof":"foaf:Image","style":"","width":"255","height":"162","alt":"africa-economy"}}]]Get our act together to tap into the African market

Exports towards the region are not taking off. For most of them, the percentage does not exceed 10 to 15% of their total turnover. Barriers to export are political, economic and legal instability, non-tariff barriers, informal distribution channels, among others. The industries are in favour of groupings to create clusters, including with competitors to invest in Africa. However, the AMM recommends a pragmatic private/public partnership approach: targeting the country or countries that are closer to our reality, more accessible, acquire market knowledge, and step by step validating each step.

[[{"type":"media","view_mode":"media_large","fid":"17661","attributes":{"class":"media-image wp-image-30005 alignleft","typeof":"foaf:Image","style":"","width":"206","height":"165","alt":"Energy"}}]]Energy and Innovation

Innovation is at the heart of the energy market. However, the greatest difficulty is the lack of a MSDG program of 15 MW (Medium Scale Distributed Generation 50 kW to 2 mW) for building integrated installations. The Renewable Energy Committee of the AMM considers that such a MSDG program would generate Rs 2 billion investment and create 150 jobs. This regulatory framework for decentralized production and consumption of photovoltaic will enable the development of new energy solutions that can be exported to African countries.

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[[{"type":"media","view_mode":"media_large","fid":"17662","attributes":{"class":"media-image size-full wp-image-30006 alignleft","typeof":"foaf:Image","style":"","width":"200","height":"164","alt":"NutShell"}}]]IN A NUTSHELL

To ward off the decline and probable demise of local production, the Association of Mauritian Manufacturers has come up with a list of measures. Some of them are as follows:

• Tax incentives for the modernization of production equipment
• Tax credit on the purchase of equipment
• Leasing at preferential rates
• Refund of VAT
• Creating an ecosystem conducive to innovation and R & D
• Tax credit on R & D
• Zero tax on income derived from assets related to intellectual property (patents, patents, trademarks designs etc.)
• Protection of intellectual property (Ratification of the Madrid Convention, the Hague system and Lisbon)
• Financially support the implementation of clusters, technology transfer platforms of incubators,
• Recognition and endorsement by the State of Made in Moris by an allocation Rs10 million
• The proclamation of a Buy Mauritian Act to promote the responsible local purchase
• Improving the Ease of Doing Business by the establishment of one-stop-shop