How Budget 2014 is shaping up
Along with the government’s call for budget proposals last month, it has listed the proposed 10-year outcomes of various ministries as a guide map to the current year’s financial planning. We take a look at some aspirational targets. (Image: accommodation.io)
With the departure of financial secretary Ali Mansoor, Budget 2014 has attracted more than its fair share of controversies. Amid union requests to postpone the presentation of the budget and the government’s rebuttal that the budget presentation does not depend on a single individual, the budget itself has been pushed into the background. Let’s get the focus back on this critical financial planning document and take a look at what various ministers think it takes to give a boost to the economy.
Along with the government’s call for budget proposals last month, it has listed the proposed 10-year outcomes of various ministries as a guide map to the current year’s financial planning. Needless to say, some targets are more aspirational than others. We list the top five outcomes that may be expected to significantly impact the economy of the island nation in the near to medium term.
Given the importance of the sugar industry to the economy, our top choice is the agriculture ministry’s objective to transform the sugar industry into a cane industry with increased export potential for sugar and other cane products. Besides, increasing self-reliance in supplying the population with food by ensuring a 5% annual rise in local production of all non-sugar crops (food crops, vegetables, fruits) is another objective that can be expected to have significant impact on the economy.
The next sector of choice is global business, with the implications it has for Mauritius’s status as a gateway for investment between Africa and Asia. The ministry in charge of global business has expressed the intent of elevating Mauritius on the Global Competitiveness Index from 54 in 2012 to 40 by 2022. The island nation has already left South Africa behind as it jumped up 9 places in the 2013 index to 45th position, so a rank of 40 by 2022 seems highly achievable.
Next on our list is the tourism ministry which has planned an increase in the contribution of the sector from 8.2% of the GDP to >10% by 2023. The island nation, famed for its world class resorts and beautiful beaches, has been struggling of late, as traditional inbound tourists from Europe and France have declined in view of a slower-than-expected recovery from recession. In the meantime, the tourism sector is facing its fair share of challenges in diversifying its tourism base to attract Asian footfalls, especially from India and China.
The next sector of choice is industry (commerce), with the ministry expressing the intent to position Mauritius among among the top 50 in respect of the efficiency in import – export procedures sub-index of the Global Enabling Trade Index. As a primarily export-led economy, the initiatives of the commerce ministry to realize this objective are essential to power the growth of trade on the island nation.
Finally, given the importance of human resources to any enterprise, the labour ministry’s proposal to reduce unemployment below 5% by 2022 gets our vote. For a country with a tiny population of 1.3 million, the island nation must look at providing its scarce human resources with the right skills set to open up more employment opportunities. Mauritius appears to be on the right track though, as it emerges as the top-ranked nation in Sub-Saharan Africa on the World Economic Forum’s Human Capital Index released this month.
Source: Government of Mauritius