Budget analysis
Radio-Plus devoted a special program to the analysis of the 2016-2017 Budget on Saturday July 30. On the set of Nawaz Noorbux, the special adviser to the Ministry of Finance, Gérard Sanspeur, the economist Éric Ng, the CEO of Business Mauritius Raj Makoond and Afsar Ebrahim, of the firm BDO, discussed the flagship measures of the budget. Highlights…
Gérard Sanspeur: “A breakthrough budget”
Gérard Sanspeur, economic adviser to the Ministry of Finance, immediately announces that it is "a breakthrough budget", whether in terms of business facilitation, innovation, openness to the world and which will benefit to the most deprived. He also speaks of a “break” in relation to the way of operating of the team that worked on this budget.
Éric Ng: "No boost to the economy"
Economist Eric Ng finds that this budget does not give a boost to economic recovery. “Admittedly, it is an essentially social budget, but I believe that we did not have a budget from a Minister of Finance, but rather from an aspiring Prime Minister. He also pointed out that the state should "produce before sharing", because, he said, there are economic imperatives to consider, such as the decline in production. “I would have preferred to have a budget that gives a real boost to relaunch the economic machine. Éric Ng believes that despite the measures announced, the most important thing is to build trust to attract investment.
Raj Makoond: “A reform budget”
For the CEO of Business Mauritius, it is a “reform budget”. He welcomes the measures aimed at Public Sector Reform which, he says, has been long awaited and which he describes as a key factor for economic recovery. Raj Makoond is satisfied with the measures relating to Business Facilitation which will accelerate the realization of development projects. It also welcomes the measures announced to combat absolute poverty. He finds there a political will to reform the public sector, to facilitate business and especially to help those who are at the bottom of the ladder.
Afsar Ebrahim: “A strong signal to financial services”
The representative of the firm BDO is of the opinion that the Tax Holiday will revitalize the financial service after the amendment of the tax treaty with India. “There will be a landscape change in the finance department,” he says. Afsar Ebrahim believes that this will promote the creation of jobs for young people in this sector. He also finds interesting the proposal on the Investment Tax Credit, which will help modernize equipment, especially in textiles. He believes that the 40% discount on freight at Air Mauritius will bring Mauritius closer to its markets.
The different measures under the magnifying glass
Economic recovery
Gérard Sanspeur explains that the government's role is to create favorable conditions to allow entrepreneurs to realize their projects. “It is not the role of the state to create jobs, but that of the private sector,” he says. The economic adviser at the Ministry of Finance also explained that the economy will perform better with the implementation of the Regulatory Sandbox License to help those who want to do business. For him, the private sector must now get to work, because it has all the tools at the level of the Rebate Scheme and the Tax-Credit. “What more do we need to revive the economy? “, he congratulates himself.
Foreign labor
For Éric Ng, the country absolutely needs foreign investment. He regrets that no mention is made in the budget on how to attract foreign skills, especially at a time when the country wants to diversify its manufacturing sector. The economist also talks about vocational training.
He believes that the population is afraid of being "invaded" by foreigners. He calls for a change of mentality, because “the country needs foreigners to ensure the diversification of our economy”. A point supported by Raj Makoond. He pleads in favor of making it easier to obtain the Occupational Permit.
Opening of the economy
For Afsar Ebrahim, we are still "timid" about the arrival of foreigners. "In the budget, it is announced that foreigners registered with the Board of Investment will be able to buy apartments and industrial spaces but, in my opinion, the registration procedures with this organization must be reviewed," he said.
Gérard Sanspeur is of the opinion that the opening of the economy is the most courageous measure of the budget. He explains that foreigners will now be able to buy Ground +2 real estate, industrial and commercial space, but must pass a Know Your Client (KYC) check at the Board of Investment level. “The potential buyer will have an answer within two weeks of his request,” he maintains. And to add that the Ministry of Finance will also have a monthly report on the evolution of the situation. Gérard Sanspeur believes that the government has done its best.
Mismatch problem
For Raj Makoond, the mismatch is a very serious problem, especially since unemployment affecting young people is around 24%. He explains that unlike in the past, when the Mauritian economy was based mainly on low-skilled labour, today the country needs skilled people to support economic development. He welcomes the creation of a Skill Development Authority. The CEO of Business Mauritius is satisfied with the establishment of a national employment agency and speaks of the importance of training and placement. "It is important that we have new players in vocational training at the level of companies and private institutions to complement public institutions", he points out.
Building sector
Despite the measures announced to revive the construction sector, Afsar Ebrahim remains skeptical. “The sector is greatly weakened and indebted. It faces fierce competition. In addition, the infrastructure projects put forward by the government could take time to start and in the meantime, construction companies would have already closed their doors. To this end, he offers a short-term Stimulus Package, especially for construction companies.
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