Afsar Ebrahim: “Bringing together experts from all sides to find solutions

Air Mauritius: "With the appointment of directors, the reform of the 'balance sheet' will be easier"

"The post-crisis will require a profound change in our way of thinking"

Faced with the seriousness of the current economic situation, Afsar Ebrahim, Deputy Group Managing Partner of BDO Mauritius departing, believes that it is necessary to "bring together experts from all sides" in order to find solutions. With the exponential increase in the country's debt looming, he believes that helicopter money could be one of the solutions. When it comes to private companies, BDO's No 2 thinks they need to think about their shortcomings and invest more in technology and remote working. Regarding the post-Covid-19 situation and the different markets to explore, Afsar Ebrahim warns that "the core of growth will be at the heart of the Asia-Africa axis in the near future", because the "tigers Asians” will bounce back…

How does an accounting firm like BDO operate during this period of confinement?

BDO has always known how to adapt to changes in the market. We launched our Business Continuity Plan as soon as the government announced the confinement. We had already applied a whole hygiene protocol upstream. Our mode of operation has not experienced any major disruption, apart from a logistical reorganization to allow remote work. Managers and associates are in constant contact with their teams, and the work continues despite the impact of the confinement being felt.

Work From Home is great, but have your activities slowed down?

Our activities have indeed experienced a certain slowdown. You should know that we are working with customers whose activities have been affected by the current situation. As a result, the existing "assignments" have been executed, but some have been suspended for the time being. We had to adapt to the situation and find solutions to operate remotely, while meeting the needs of our customers, including free advice to assist them.

What are the fears expressed by your customers?

The fear comes mainly from the uncertainty about the duration of this health crisis and how badly it will affect our economy. Some customers have also asked for advice on the various support measures announced by the government. That said, it has taken people a while to realize that there is no trade-off between saving lives and saving livelihoods.

Faced with the sudden halt in economic operations in the country, how should private sector companies react?

It's time to reset the counter! Now is the time to sit down and reflect on our shortcomings, as this is the first time in history that we have been paid to stay at home. Companies should also invest more in technology and remote working. This will ultimately bring more efficiency and inclusion in the world of work, especially for people with reduced mobility.

What strategies should companies implement to be ready for the post-crisis period?

The post-crisis will require a profound paradigm shift in our way of thinking. We need a new approach to doing business, and Environmental, Social and Governance (ESG) will be central to it. We cannot analyze this unprecedented problem through the prism of a bygone mentality. The best strategy is to generate as much revenue as possible and keep it until there is more visibility on economic developments. The objective is to maintain operations as much as possible and preserve employment. SMEs will also need a lot of support, being indeed one of the pillars of our economy. I welcome the government's efforts in this direction.

What will change after Covid-19 and will new economic sectors emerge?

We are in uncharted territory. There is a demand crisis, the supply chain is disrupted and assets lose value. However, we must protect our financial services, especially the banking sector, so that this health crisis does not turn into a financial crisis. Once the health component has been resolved and the fear eliminated, confidence will make a comeback. Our healthcare system will have a big role to play in this regard. What will change is what has been said for a long time already: the compass of economic power will now point to the East. The Asian tigers had a worse time in 1997 and they will bounce back. India and China will not be in recession. They are going to be the architects of their own recovery. Africa, for its part, has been affected, but not in the same way as Europe and the United States at present. The core of growth will therefore lie at the heart of the Asia-Africa axis in the near future and Mauritius is well positioned to take advantage of this.

Local businesses will have to adapt to changes in consumption. This will result in a change in the timing chain. Online shopping and home delivery will become a lasting habit, a nod to the days of old when the population had its fruit and vegetables delivered by merchants on bicycles...
Agro-industry, a sector neglected for a long time, will take on a new impetus. It is high time it became industrial so that we become self-sufficient in quality products at affordable prices. We have recently seen artificial shortages and price spikes. Local consumers deserve better and if distribution channels need to be changed, so be it! In the end, it is the consumer who will have the last word. Will we finally see the long-awaited economic reform with a revaluation of our local industry?

The Minister of Finance had spoken of a 6% decline in the growth rate for the current year, ie -3%. Today, some economists are more pessimistic and even mention a 10% decrease in our GDP. What do you think ?

Unfortunately, I don't have a crystal ball. What is certain is that we are definitely heading towards negative growth. The question is how long will this last and, on the other hand, how quickly we will bounce back. I have no doubts about our ability to overcome this crisis. The end of the year should be less gloomy and we should start to see slight signs of recovery around 2021, if there are no further disruptions in the coming months.

The most affected currently is the airline and travel sector. The planes are grounded and Air Mauritius has just been put under voluntary administration. Will it have the means to recover from the Covid-19 crisis?

The situation is difficult for all economic players and Air Mauritius is no exception. Let us remember, however, that management has worked hard on a recovery plan. With the appointment of administrators, the reform of the balance sheet will be easier. Most importantly, the spirit of reform was already there. Air Mauritius is our sole national carrier. He was able to support us in this time of crisis and we must pay tribute to the efforts of his team.

Should deconfinement be implemented in several phases in your opinion, and if so, where to start?

To know how to deconfine and where to start, we must let ourselves be guided by health professionals and follow their instructions. The reopening must be done taking into account the risks of a new wave. One death is already one too many.

With all the government aid in place, we already know that Mauritius' sovereign debt will explode after the virus. Where will the country find these financial resources while managing the repayment of the debt in the best possible way in the coming years?

I don't think we should analyze this problem with the financial indicators that we normally use. We are in an unprecedented situation and this requires an “out of the box” approach. I think the best thing would be to bring together experts from all sides to find innovative solutions. “Helicopter money” could also be one of the financial solutions.

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