On a declining trend since 2014, external trade has been another cause for concern for policymakers. Although Cabinet Office established a close monitoring of the activities in the
export sector since Brexit, official figures show that revenue on export of goods fell by a fifth. The connectivity crisis caused by the Covid-19 pandemic has further weakened operations as the performance of the export sector depends heavily on external connectivity.
Revenue of Export Oriented Enterprises amounted to Rs. 48.9 Bn. in 2014. Out of the 53,888 jobs that existed in this sector during that same year, 31,210 belonged to Mauritians. In 2019, Export Oriented Enterprises were able to generate Rs. 42.3 Bn and in 2020, only Rs 37.3, with a Rs. 5 Bn dip registered in the second semester alone. In 2019, the total employment in the sector was already declining. 44,160 jobs existed out of which 21,551 jobs were held by Mauritians. By the third quarter of 2020, the situation with regards to employment had deteriorated. 7882 jobs in total were lost due to the closure of factories especially in the textile sector while only 544 jobs were created due to the expansion of existing factories.
Since Brexit, the Mauritian Government has made attempts to reinvigorate the EOEs through the Speed to Market Scheme that involves a 40% refund on basic air freight cost. On a weekly basis, the Cabinet Office has been receiving reports on the situation in this pillar of the economy. By the third quarter of 2017, there were positive signs. The total number of jobs increased from 51,774 in 2016 to 52,478 by September 2017. The textile and processed fish were two areas in which Mauritian based companies were doing well.
However, by 2019, the weight of the National Minimum Wage started to be felt. Since 2014, over 10,000 jobs had been lost. By March 2020, there were only 43,488 jobs in the EOEs.
To address this declining trend, the Ministry of Finance and Economic Development (MOFED) will have to ensure that costs of doing business for EOEs such as freight and timeframes to move products to markets remain low. Airport and maritime connectivity will most probably be areas in which considerable resources will be dedicated to. The MOFED is especially keen on seeing Mauritian businesses take advantage of the 3 Free Trade Agreements signed with China, India and the African Continent. Policymakers know that to do so, they will have to provide incentives not only to local EOEs but also to attract the giant global business logistics.
