Budget 2022-2023, entitled With the People, For the People, was presented, Tuesday afternoon in the National Assembly, by the Minister of Finance, Economic Planning and Development, Dr Renganaden Padayachy. It is focused on three main pillars, namely the strengthening of our economic growth and resilience to future shocks; accelerating the country’s transition to a sustainable and inclusive development model; and investing in the people.
The finance minister observed that although the country experienced a contraction in its Growth Domestic Product (GDP) of 15 % in 2020, it is now doing better since a historic response of 32 % of GDP had been deployed by the Government. This, he emphasised, demonstrates that the Government is fair and caring and acts out of solidarity for its population.
To that end, Dr Padayachy enumerated several measures which have been implemented to help the population. They include:
- Introduction of the Wage Assistance Scheme and the Self-Employed Assistance Scheme which benefitted 542,000 workers and self-employed to preserve employment, representing Rs 27.3 billion;
- Payment of pension at Rs 9,000 to some 302,000 beneficiaries to preserve the purchasing power of the elderly and the vulnerable;
- Subsidised essential products to the tune of Rs 5.2 billion;
- Increased of the minimum wage from Rs 10,200 to Rs 11,075;
- Payment of the salary compensation of employees of SMEs;
- Provided a moratorium on the repayment of capital of loans; and
- Allocation of Rs 100 billion to support businesses.
He added that this response package has enabled Government to avoid massive lay-off of 100,000 people, economic bankruptcy and social chaos. He stated that according to IMF forecasts, the country’s GDP will exceed its pre-pandemic level, reaching Rs 520 billion by 2022 compared to Rs 465 billion in 2021.Unemployment is expected to go down to 7.8 % from 9.1 % a year ago, he said.
Furthermore, the Finance Minister indicated that exports of goods and services will reach Rs 169 billion from Rs 141 billion in 2021 adding that the investment rate will increase to 21.2 % of GDP from 19.2 % in 2021. According to him, Foreign Direct Investment will exceed Rs 20 billion from Rs 15.4 billion last year and tourist arrivals will reach 1 million in 2022 from 179,780 in 2021.
As regards public sector debt, he underlined that it will be on a downward trend from 96.1 % in June 2021 to 87.4 % in June 2022. Government debt, he said, will fall from 87.1 % in June 2021 to 77.3 % in June 2022. He recalled that supply chain disruptions, the war in Ukraine and the recent lockdowns in China are impacting prices globally and as such, the Bank of Mauritius expects inflation to be at 8.6 % in 2022.
Dr Padayachy said that Government will be able to achieve its objective to bring down public sector debt to less than 80 % of GDP two years ahead of schedule. For 2022 – 2023, GDP will grow by 8.5 %, he added.
As regards investment in building resilience in the economy, in public finances and the people, he announced a series of key measures. They include:
- Maintaining retail price of “pain maison” at Rs 2.60
- Provision of Rs 1.4 billion for a subsidy of Rs 591.25 on a pack of 25 kg of flour to bakers.
- Providing Rs 2 billion to keep the price of a 12 kg cylinder of cooking gas at Rs 240 instead of Rs 680.
- Maintaining the price of rice at Rs 10.80 by allocating Rs 370 million.
- Earmarking Rs 500 million to the State Trading Corporation for it to supply essential products such as milk, edible oil and pulses at a subsidised rate.
- Introducing price control on pasta, wheat cereal, infant food, as well as baby and adult diapers.
- The margin for pharmaceutical products is being reduced through a regressive mark-up regime.
- Products will have to be sold at a discount of at least 50 percent of the original price after their best before date but prior to their expiry date.
