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Mauritius: Selected Issues and Statistical Appendix

Author(s):
International Monetary Fund
Published Date:
August 2005
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V. Developing a Corporate Bond Market in Mauritius: Some Lessons From Emerging Market Countries41

A. Introduction

117. Mauritius has an efficient and a relatively large financial system. Its banking system is profitable and generally sound. It also has a well-developed insurance and pension sector, a number of nonbank financial institutions, and a stock market with capitalization of about 34 percent of GDP in 2003. The basic financial sector infrastructure, such as payment, securities trading and settlement systems, is modern and efficient. However, like many emerging market countries, the financial sector is dominated by banks (see Table V.1). The still growing offshore financial sector does not actively participate in local financial activities, and has yet to be fully integrated with the economy.

Table V.1.Financial System Structure(At the end of June 2002)
Total Assets
Number of institutionsAssets (MUR millions)In percent of total assetsIn percent of 2002 GDP
Onshore banks10134,67537.897.6
Domestic4102,95828.974.6
Foreign631,7178.923.0
Offshore banks12129,20536.393.6
Insurance companies2227,1607.619.7
Pension funds1,09542,97812.131.1
Mauritius Housing Company16,2921.84.6
Development Bank of Mauritius16,1761.23.2
Post Office Savings Bank11,0320.30.8
Leasing companies127,11625.2
Asset management compaines128610.20.6
Credit finance companies2626960.20.5
Stock brokers114380.10.3
Insurance brokers82100.10.2
Management companies389770.30.7
Corporate trustees11460.00.0
Captive managers480.00.0
Total1,500359,870100.0258.0
Sources: The Mauritian authorities; and staff estimates.
Sources: The Mauritian authorities; and staff estimates.

118. The development of a corporate bond market could significantly enhance Mauritius’s financial stability. Credit to the private sector is highly concentrated in the onshore banking sector. The onshore banks’ asset quality has presently come under pressure due to the economic difficulties facing the sugar and export processing zone (EPZ) sectors. Meanwhile, the pension and insurance companies are seeking longer-term assets that match the maturity structure of their liability portfolio. A well-functioning corporate bond market could improve the efficiency of the financial system by diversifying credit risk concentrated in the onshore banks, and can also provide a cheaper alternative to financing than bank loans for the corporate sector, which would ultimately facilitate growth in private investment.

119. The purpose of this paper is to draw on lessons from other emerging countries’ experience in developing a corporate bond market and highlight some important requirements for developing such a market in Mauritius. Emerging market experiences indicate that developing a well-functioning corporate bond market is a complex and long-term task. It requires a series of well-designed reforms and assistance from the government in order to create the appropriate market environment to encourage the supply of corporate bonds, to build investor base, and to ensure a liquid market. High savings, investment-grade sovereign rating, strong institutions, and its position as an established off-shore financial center make Mauritius a good candidate for the development of a corporate bond market.

120. This paper is organized as follows. The next section reviews the financial system in Mauritius and identifies its main systemic risks. Section C discusses the benefits of developing an efficient corporate bond market. Section D identifies factors that contribute to the development of an efficient corporate bond market in emerging market countries. In light of the emerging market experience, this section also discusses key issues that would need to be addressed for the development of a corporate bond market in Mauritius. Section E concludes.

B. The Financial system in Mauritius

Banking system

121. The credit risk of the corporate sector is largely concentrated in the banking system, and the sectoral credit risk exposure is high. Within the onshore financial sector, banks account for about two-thirds of total assets. Their share of credit to the private sector in total assets is about 50 percent (see Table V.2). The Mauritius Commercial Bank (MCB) and State Bank of Mauritius (SBM), the two largest domestically owned banks, hold 70 percent of total assets and 77 percent of total loans in the domestic banking system, respectively.42 The sugar, tourism, and textiles industries account for some 40 percent of bank credit, and the sectoral distribution of credit is relatively skewed (see Figure V.1). Among the large sectors, manufacturing, including the EPZ, account for the second largest share of nonperforming loans (see Figure V.2).

Table V.2.Summarized Aggregate Balance Sheet of Category 1 Banks as of Februrary 29, 2004

(In thousands of Mauritian rupees, unless otherwise indicated) 1/

AssetsIn percent

of total

assets
LiabilitiesIn percent

of total

liabilities
Cash in hand2,595,5311.6Capital5,236,4333.2
Balances with BOM5,479,0633.4Reserves and surplus10,416,4996.4
BOM bills6,489,4344.0Subordinated loans125,0000.1
Government securities32,589,78520.0Shareholder loans10,3560.0
T-bills30,228,16418.6Deposits125,084,26776.8
T-bonds2,361,3971.4Priviate sector119,723,40573.5
Foreign assets11,791,8727.2Government153,9940.1
Claims on private sectorStatutory and5,202,013
87,166,61353.5parastatals3.2
Loans78,822,00448.4Category 2 banks4,8560.0
Stocks2,979,2881.8Borrowings7,902,1364.9
Debentures5,365,3203.3Of which: BOM1,893,2661.2
Claims on parastatals1,629,7021.0Of which: interbank0.0
Loans1,186,1020.7Bills payable185,0390.1
Stocks3000.0Other liabilities13,896,6268.5
Debentures443,3000.3
Claims on banks1,956,254
Category 21.2
Fixed assets8,322,5205.1
Other assets4,821,6633.0
Total162,856,355100.0Total162,856,355100.0
Sources: Bank of Mauritius; and staff calculations.

The balance sheets have been adjusted from BOM data to show net loans rather than gross loans on the asset side.

Sources: Bank of Mauritius; and staff calculations.

The balance sheets have been adjusted from BOM data to show net loans rather than gross loans on the asset side.

Figure V.1.Mauritian Onshore Banks: Sectoral Credit Distribution

(as of Feb. 2004)

Sources: Staff calculations on the basis of BOM data.

Figure V.2.Nonperforming Loan Ratios Per Sector as of December 31, 2003

Source: Staff calculations on the basis of BOM data.

122. The stress tests conducted by the Financial Sector Assessment Program (FSAP) in 2003 indicate that credit difficulty is the main risk facing the Mauritian banking system, although the high levels of capital and profits of the system, and the practice of extensive collateralization, provide a comfortable buffer against high-probability shocks. The most important risk is that the onshore banking system is vulnerable to external economic shocks and a downturn in economic activity. To guard against deterioration in the quality of their portfolios, banks have been reducing their exposure to sectors where the risk is considered the highest (see Table V.3). For example, growth of the credit to the EPZ declined by 15.6 percent in 2002/03.

Table V.3.Sectoral Growth Rate of Credit to the Private Sector(In percent)
Sector of Mauritian economyJune 2001-June 2002June 2002-June 2003
Agriculture and fishing19.910.2
EPZ1.5-15.6
Non-EPZ manufacturing11.811.8
Tourism16.417.8
Transport10.8-3.6
Construction4.82.8
Traders6.18.4
New economy (ICT)34.777.3
Financial services24.01.9
Infrastructure-6.2-7.4
Other-4.64.5
Total8.16.4
Source: Bank of Mauritius and staff calculations.
Source: Bank of Mauritius and staff calculations.

123. The offshore banking sector has grown rapidly since the second half of 1997, but it is weakly integrated with the domestic economy. 43 The assets of the 14 “Category 2 banks”44 amounted to 94 percent of GDP in 2002, marginally less than the assets of domestic banks (see Table V.4). Offshore banks are allowed to collect foreign-currency denominated deposits from residents and can lend in foreign currency to residents and domestic firms. However, they do not have significant retail activity in Mauritius and have limited their domestic operations mainly to public sector borrowers. The offshore banks provide a wide variety of foreign-currency denominated services, including deposit taking, lending, foreign exchange dealing, trust fund management, asset financing, and securities custodial services.

Table V.4.Summary Aggregate Balance Sheet of Category 2 Banks, as of February 29, 2004(In thousands of U.S. dollars, unless otherwise indicated)
AssetsIn percent of total assetsLiabilitiesIn percent of total liabilities
Cash in hand (foreign notes)770.0Capital181,7803.3
Amounts due from banks2,487,83444.7Reserves177,8733.2
Investment251,0174.5Deposits of
T-bills of foreignnonbank
government0.00.0customers2,352,96642.3
Other foreign securities1,6140.03
Other securitiesAmounts due
in Mauritius1,0460.02to banks2,455,97144.1
Bonds0.00.0
Notes480.0
Equity0.00.0
Other securitiesBonds and
outside Mauritiusdebentures
248,3554.5issued0.00.0
Bonds180,9523.3
Notes3,3060.1
Equity7690.0
Others63,3281.1Other
Loans and advances2,668,61347.9liabilities397,8577.1
Other assets158,9052.8
Total5,566,446100.0Total5,566,446100.0
Source: Bank of Mauritius.
Source: Bank of Mauritius.

Nonbanking financial institutions

124. Nonbanking financial institutions (NBFIs) are well developed in Mauritius, but they face a maturity mismatch and reinvestment risks. Contractual savings, represented by the total assets of pension funds and insurance companies, are large and amounted to MUR 70 billion (50 percent of GDP) in 2002. The sector covers the National Pensions Fund (NPF), the National Savings Fund (NSF), 22 active insurance companies, and 1,095 occupational pension funds created by statutory bodies and private sector companies. Savings institutions have a strong demand for long-duration assets to match the maturity structure of their liabilities. In particular, life insurance companies face considerable reinvestment risk arising from a persistent fall in interest rates.

Table V.5.Assets of Contractual Savings Institutions, 2001–02(In millions of Maurtian rupees, unless otherwise indicated)
20012002
Self-administered funds2,4584,058
Sugar Industry Pension Fund2,1612,196
Insured/administered funds8,90410,922
Occupational pension funds13,52317,176
NPF21,77222,422
NSF2,8493,380
Insurance companies23,97227,160
Total62,11670,138
Less double counting 1/8,90410,922
Total contractual savings
Assets53,21259,216
Total assets/GDP ratio42.540.0
Source: FSC.

Insured and administered pension funds.

Source: FSC.

Insured and administered pension funds.

Table V.6.Asset Allocation of Contractual Savings, 2000-02
Percent of Total Assets
200020012002
Shares and debentures353538
Mortgage loans252321
Government securities7913
Deposits and securities13149
Land and property554
Other loans544
Other assets101011
Total
Source: FSC.
Source: FSC.

Domestic capital market

125. The development of the capital market has lagged behind that of the banking sector. The short-term money market has been inactive, and there is some market segmentation, with the major foreign banks not offering interbank credit to smaller local banks. The primary government bond market is functioning well.45 Treasury bills at 3-, 6-, 12- and 24-month maturities are all sold at weekly auctions.46 The yield curve is generally reliable. However, the secondary bond market is at early stages of development.

126. The institutional, legal, and technical infrastructure of the Stock Exchange of Mauritius (SEM) is well developed, but the market is characterized by low volume, poor liquidity, and lack of depth. The SEM, incorporated in Mauritius on March 30, 1989, as a private limited company, operates two markets: the Official Market, on which securities of listed companies are traded, and the Over-The-Counter (OTC) Market. Currently, there are 40 companies listed on the Official Market representing a market capitalization of nearly US$2.1 billion as at March 31, 2004. However, since the late 1990s, activities in the SEM have slowed. From 1999 to 2003, market capitalization declined from 37 percent to 34 percent of GDP, and the average turnover hovered around 6 percent, indicating that the market is small.

127. The corporate bond market has been functioning on the SEM for several years. Corporate debentures are traded by both the SEM as well as an OTC board in Mauritius. However, there has been no new issuances and trading activities are very low, partly because the government reversed its tax policy on interest payments a few years ago. The number of corporate debentures was 18 and 11 in December 2001 and December 2002, respectively. Total turnover value was MUS 1.81 million and 0.4 million, for December 2001 and December 2002, respectively, which only accounts for one hundred times the turnover value of equities during the same period.

Corporate sector

128. Surprisingly, in this small island economy, the corporate sector has a relatively large number of firms and a significant number of large firms. Summary statistics of the Registrar of Companies Financial, Incorporation, and Object databases show that the total number of corporations is about 10,000 in 2004. The number of large firms is about 450 and the number of medium firms is about 1,380.47 Although the main corporate source of financing is banking loans, the large firms may have an incentive to issue corporate bonds as an alternative corporate financing.

129. Banks and financial institutions enjoy strong and enforceable creditor rights, but the legal framework governing corporate insolvency48 needs to be updated. Nearly all corporate lending in Mauritius is done on a secured basis. Banks and financial institutions benefit from strong, preferential rights with respect to security and fixed and floating charges, but enforcement procedures are often slow and inefficient.

130. There is a need to improve creditor protection and increase the recovery rate of loans. A recent assessment by the World Bank (2004) concludes that, while the systems for creditor protection and credit recovery in Mauritius offer modern protection, court proceedings do not respond to the needs of a dynamic industry. Constraints in the systems and illiquid markets typically result in low recoveries, even for secured creditors.

131. The authorities have taken a number of measures to strengthen the governance of commercial entities. The Companies Act 2001, the new Listing, Rules, and the consolidation of financial regulation within the Financial Services Commission (FSC) have enhanced shareholder protections and contributed significantly to corporate governance improvements. In several areas, however, further reforms are necessary to enable shareholders to exercise better control over management and help protect against abuse, particularly in those cases where there is one dominant family or group that owns a controlling interest in the company’s stock.

C. Benefits of an Efficient Corporate Bond Market

132. Advantages of a well functioning corporate bond market have been reviewed extensively in the literature. Boot and Thakor (1997) show that a financial system in its infancy will be bank dominated, and that bank lending declines as the financial market becomes more sophisticated. Hakansson (1999) compares the development of the economic structure between an economy with a well-developed corporate bond market and an economy in which bank financing plays a central role, suggesting a corporate bond market as a better way to control financial risks. Noel, Rebello, and Wang (2003) suggest that bond financing is a highly desirable choice for an economy in the long run because agents learn about the structure of security returns through trading experiences, and gravitate toward strategies that generate the highest payoffs. This results in the emergence of a financing hierarchy in which securitized debt dominates bank loans and other financing choices. Herring and Chatusripitak (2000) also conclude that the absence of a bond market may render an economy less efficient and significantly more vulnerable to financial crisis.

133. A corporate bond market can reduce the credit risk concentration in banks. In the absence of a corporate bond market, a major proportion of debt funding for corporations has to come from the banking sector. With a corporate bond market, however, the credit risk of the corporate sector could be born by a large number of market participants, including households, NBFIs, and foreign investment firms. A much cited quote by Alan Greenspan (2000) is that bond markets can act like a “spare tire,” substituting for bank lending as a source of corporate funding at times when banks’ balance sheets are weak and banks are rationing credit.49

134. In the case of Mauritius, bank credit to the private sector has continued to decline during the last several years, and there is excess liquidity in the banking system, partly because of the cautious attitude of banks toward credit risk. Medium-term growth is likely to slow to around 4 percent per annum, relative to the historical average growth rate of 5.5 percent. To sustain economic growth in the medium term, it is necessary for the economy to diversify the credit risk currently concentrated in the onshore banks’ balance sheets.

135. For investors, an efficient corporate bond market provides long-term investment opportunities, and for the issuer, it lowers the cost of financing. The nonbank financial institutions, such as life insurance companies and pension funds, can reduce the maturity mismatch of assets and liabilities by investing in corporate bonds. For the issuer, by allowing firms to finance longer-term debts, corporate bonds enable the firms to invest in larger projects such as infrastructure and utilities, where substantial outlays may be required for some period of time before positive rates of return are realized. In addition, firms may reduce their financing costs by borrowing directly from investors, bypassing commercial banks. Also, while firms still go through underwriters, brokers and dealers to raise funds, the competition among these intermediaries is more intense compared to that of commercial banks, thus reducing intermediation costs.

136. The continued widening of interest rate differential between the average T-bill yield and the average bank lending rate increases demands for cheaper corporate financing in Mauritius (see Figure V.3). Given balance sheet concerns, onshore banks are reluctant to reduce their lending rates, despite the presence of excess liquidity. In addition, the corporate bond market could potentially position itself between the government bond yields and the bank lending rate.

Figure V.3.Differential between Average Bank Lending Rate and Average T-bill Rate

D. Factors Contributing to the Successful Development of a Corporate Bond Market

137. This section identifies a number of factors that appear to have been important in explaining the development (or lack of development) of corporate bond markets in emerging markets. The discussion is centered on six broad areas.

Institutional and legal framework

138. A crucial aspect of a well-functioning market is its legal framework and legal enforcement. Many successful countries, during their initial stage of development, adopted a legal system that incorporated an investor protection clause. Protection clauses define the limits of legal obligation for bankrupt issuers to repay their dues, and delineate procedures for enforcing them. Such a mechanism, similar to Chapter XI of the Bankruptcy Code in the U.S., gives companies protection from their creditors, while allowing investors to assess rationally the risks they face.

139. The legal framework should include information disclosure requirements on a regular basis. The authorities should ensure that corporate accounting standards are consistent with international practice, a lesson from the 1997 Asian crises. Even prior to the crises, these countries had operated large corporate bond markets. It was only revealed ex post that, due to the government’s implicit guarantee to the corporate sector (“too big to fail”), coupled with a poor credit rating mechanism, accounting standard, and reporting requirements, these bonds were mostly de facto bank loans.

140. Sound corporate governance is also critical for corporate bond market development. Better corporate governance can be implemented through several mechanisms, including improved laws, enhanced regulations and supervisions, and stronger enforcement of private contracts.

141. In Mauritius, creditor protection should be given the top priority based on the lessons from emerging market countries. The authorities need to improve the legal framework, which will address weaknesses mentioned in the 2004 ROSC assessment. In addition, sufficient creditor protection provisions and information disclosure requirements should be included in the current draft of the Security Act.

Developing the benchmark

142. An efficient government bond market increases the efficiency of pricing of corporate bonds. Market participants often use yields on certain “benchmark” issues to construct a term structure of risk-free returns, which are used in the pricing of a wider range of financial instruments, including and especially corporate bonds. Investors and issuers in such countries are more experienced with operations of securities markets, and are thus more likely to participate in the corporate bond market where a government bond market is active. The experiences of Asian countries indicate that the absence of an efficient government bond market could lead to a distorted corporate bond market development. In the case of Korea, the corporate bond market had been active prior to the crisis, despite a relatively underdeveloped government bond market. Without the benchmark yield curve provided by a large public debt market, especially in the shorter end of the curve, the pricing of corporate bonds was distorted, resulting in active trading of lower quality debts at high prices. This has been cited as one of the factors that triggered the financial crisis in 1997/98.

143. The operation of an efficient money market is also an important precondition for developing corporate bond markets. Schinasi and Smith (1998) argues that money markets provide an anchor to the short end of the yield curves and are critical for the pricing of bonds and bond derivatives.

144. In the case of Mauritius, the authorities should attempt to build a yield curve on the money market and establish a connection with the primary bond market. In doing so, the authorities should lengthen the maturities of current money market instruments from the existing one week to three months’ maturities. Also, further efforts are needed to improve the liquidity of the secondary government bond market. Along with the recent stock exchange listings of government bonds, efforts should be geared toward increasing competition by allowing more dealers to enter this market.

Credit risk assessment

145. The presence of reputable international credit rating agencies is recognized as an important factor for the success of a bond market. It contributes to eventual development of a well-functioning domestic credit rating system, which would increase the transparency of issuance and the transferability of corporate bonds, either in the primary or in the secondary market, and deepen the corporate bond market. Establishment and development of independent domestic credit agencies would provide sharper differentiation of credit risks within the domestic market.

146. The pricing mechanism of corporate bonds can improve through measures such as the standardization of bond contracts, stock exchange listings, rating requirements and proactive ratings by some institutional investors in the market. For example, since April 2000, the Thai authorities have required compulsory credit ratings for most corporate bonds to promote a credit culture and to discourage private placements from ending in the hands of unsophisticated retail investors. In the absence of credit rating agencies, as in the case of Chile, pension funds have played the role of rating agencies and have become the “price makers” in the market.

147. In the case of Mauritius, the establishment of a credit information bureau would improve loan qualities by allowing lenders to assess better the credit risk of firms. This should be followed by the eventual introduction of independent domestic credit rating agencies. Meanwhile, further efforts are needed to promote education and training on credit risk assessment. The presence of international rating agencies could contribute significantly during the early stages of developing credit risk assessment skills.

Building the investor base

148. One of the major obstacles in building an investor base is the crowding out effect of government bonds. In the case of Brazil, its debentures market faces major hurdles in becoming a reliable source of financing for the corporate sector because government securities are attractive to domestic investors (low credit risk, ample secondary market liquidity, high real yields, and in many cases, protection against exchange rate, inflation and interest rate risks through indexed bonds). Only local firms willing to pay rates in excess of 20 percent on three-year debentures are able to bid for domestic investors’ funds.

149. Low and stable inflation, supported by credible monetary policy, is also important in building the investor base. When the government bond yields are sufficiently low under a stable, low inflation environment, the individual and institutional investors become motivated to invest in corporate bonds. However, if inflation is not stable, a reversal of the interest rate cycle might lead to excessive adjustments in bond prices, especially in the markets where hedging instruments are unavailable or highly illiquid.

150. Governments have often been involved in broadening the investor base during the initial stages of corporate bond market development. In the case of Korea, the government enacted the Securities Investment Trust Business Act, and presidential decrees and enforcement ordinances to introduce contractual-type investment trust companies (ITC) as a vehicle to mobilize domestic capital to build investor base. Commercial banks in Korea also introduced an investment vehicle, the bank trust accounts, and employed this new tool to enter the trust businesses. As a complementary measure to developing an investor base, the Korean government devised a safety net to encourage investor confidence by adopting a bond guarantee scheme during the early stage of development. In the case of Malaysia, which has also one of the largest corporate bond markets in emerging markets, the government established the Cagamas Berhad, the national mortgage corporation, in 1987, to develop a secondary mortgage market and at the same time promote the development of the corporate bond market.

151. Banks can contribute to increasing demand for corporate bonds. In some countries, banks are major holders of corporate bonds. For example, in Indonesia, banks hold the majority of corporate bonds, and this was the case in Argentina, Brazil, Chile, and Malaysia. Banks may hold a smaller portion over time as institutional investors develop. Banks typically hold a large share of short-term government debt to meet liquidity requirements and they dominate the short-end of the bond market.

152. NBFIs, such as pension funds and insurance companies, also play an important part in the development of a corporate bond market in the medium term. For example, the Chilean pension reform in the early 1980s had a significant positive effect on the development of the long-term corporate bond market. This was so because pension funds (and also insurance companies) were in need of a larger asset base and longer term assets to reduce the mismatch of their asset/liability portfolio. The issuance of corporate bonds in Chile rose from less than US$100 million in 1995 to over US$10 billion in 2003.

153. It is also important to develop the retail investor base in the long run. In order to widen the retail investor base, both Hong Kong SAR and Singapore have initiated programs designed to place a portion of the assets of the mandatory provident funds in the hands of private fund managers. Hong Kong SAR’s Mandatory Provident Fund trustees have received more inflows than expected when the system started in December 2000; one-third of the funds is invested in the bond market. In Singapore, demand for bonds has also been generated by farming out part of the assets of the Central Provident Fund to private asset managers, and by the placement of investment mandates of the government and other government-linked entities with private sector fund managers. Issuing bonds in smaller bills would also extend investment opportunities to individuals and enlarge the investor base, especially in Mauritius where the household saving rate is very high.

154. Measures such as favorable tax treatment for investors, and issuance of securitized bonds, are also effective in attracting investors. Singapore has implemented various kinds of tax incentives to participate in the debt market, that benefit both residents and nonresidents. In particular, foreigners have been allowed to borrow from domestic banks in order to invest in the domestic corporate bond market, and have been granted tax exemptions on interest income earned. With regard to securitized bonds, Chile has experienced a strong increase in these bonds, rising from an issuance of below US$50 million in 1999 to over US$1.4 billion in 2003, by starting with mortgage loans and expanding it to car loans, credit card, and university credit.

155. In the case of Mauritius, the government should harmonize the tax treatment of interest income on all financial instruments, and aim to remove tax and other barriers that discourage the issuance of corporate bonds and the active presence of institutional investors in corporate bond markets. Mauritius should also take advantage of its foreign clientele network from the OFCs, both as the issuer (as in the case of Switzerland) and as the investor to boost corporate bond market activities. Stock listings of corporate bonds can also be explored as a venue to expand the retail investor base.

Building the issuer base

156. Various government strategies have been introduced to boost the supply of corporate bonds. Attracting more issuers can be difficult for a small economy. It becomes even more difficult if the economic outlook is bleak, because firms are not willing to increase investments. Some countries facing similar limitations began by encouraging statutory boards and government-linked corporations to tap the bond markets rather than opt for direct bank lending. The financial centers of Hong Kong SAR and Singapore have encouraged statutory boards and government-linked corporations to issue local bonds to help develop the market.

157. The government can play a proactive role in attracting foreign issuers. In the case of Singapore, the government has been actively encouraging issues not only from Singapore but also from foreign issuers. After the development of the market infrastructure and the establishment of a benchmark yield curve, the Singapore authorities removed some of the remaining restrictions that prevented the internationalization of the Singapore dollar. The recent liberalization measures complement previous efforts to attract foreign asset managers and strengthen Singapore’s position as the main Southeast Asian financial center. It has been emulating Switzerland, where foreign entities are active issuers of Swiss franc bonds.50

158. Banks can become a large issuer of bonds. In several countries, such as Brazil, China, Germany, India, and Indonesia, banks use bond markets to supplement deposits as a source of funds. Banks may also act as underwriters for corporate bond issues, promising to take up any shortfalls if corporate bonds cannot be sold at an agreed minimum price (maximum yield). Banks then take on market risk rather than credit risk. Over 90 percent of bonds in Hong Kong are underwritten by banks.

159. Credit guarantees can help issuers with low credit ratings to issue higher-grade bonds to gain access to the market. Many countries have introduced bond guarantee schemes for credit enhancement purposes. In such cases, banks became the guarantors and earn fee income by guaranteeing full or partial repayment on corporate bonds.

160. Asset securitization may allow private entities to free up more capital and financial resources. In particular, the issuance of asset-backed securities (ABS), can prove useful to borrowers without a well-established track record to raise funds through the bond market, and which may be particularly relevant to young, second-tier companies new to the bond market and without a high credit profile. Many companies in Mauritius could fall under this category. The jurisdictions that have adopted a formal ABS issuance framework include South Africa and Singapore. Argentina has also seen strong growth in ABS issuance following introduction of securitization facilities, with ABS issues growing by six times over the period 1998-2000.

161. In the case of Mauritius, the onshore banks can become the initial issuers of corporate bonds to finance their assets. Consideration should be given to extend this privilege to the offshore banks. The development of asset-backed securities, including mortgage securitization, could provide liquidity to lenders. This would assist lenders in diversifying their credit risk and allow them to lend on a longer-term basis without maturity mismatches.

162. A relatively large number of big firms in Mauritius’s corporate sector can potentially become the main issuer base for the corporate bonds in the long term. Credit enhancements, such as collateral and guarantees, could lower the costs of new issues and help firms access the corporate bond market. However, about 40 domestic firms listed in the SEM, which have already had some track records for assessing credit risk, could become the initial issuers of the corporate bond market.

Developing efficient primary and liquid secondary markets

163. A successful launch of a primary corporate bond market depends heavily on the cost of issuance of bonds. In Hong Kong SAR, for instance, the cost of public issuance is estimated to be four times that of the private placement, and this has been cited as one factor that constrains the development of corporate bond markets. In the case of India, the lengthy issuance procedure has contributed to the dominance of private placements.

164. Many countries continue to face relatively inactive secondary markets, even after successful launch of bond markets. Very often, the system lacks transparency in the market-making process, thus inducing institutional investors to hold securities to maturity. The secondary market is, thus, prone to experience low liquidity and market fragmentation, often together with information asymmetry, and the corporate bond market faces pricing anomalies. Regulatory restrictions that prevent banks from doing repurchase agreements with corporate bonds are also seen as an obstacle for the development of a liquid secondary market. Many countries are tackling the problem by first fostering government bond markets to establish a solid benchmark yield curve and to familiarize market participants with bond trading. Some emerging markets have introduced credit derivatives markets to foster active trading in the secondary market. In the case of Singapore, the authorities opened up the liquid swap market to offshore banks and securities dealers, and provided market players with a hedging mechanism by launching the three-month Singapore dollar interest rate futures contract and Singapore Government Securities bond futures contract. The country has also made the infrastructure more conducive to market development by encouraging the use of e-bond technology and business.

165. To improve regulation of corporate bond markets, many jurisdictions are trying to encourage more organized, stock exchange-based trading of bonds, as it is viewed as being better regulated. A stock exchange listing can serve a useful function in secondary markets for bonds, even if most trading occurs on the OTC. Exchange listing provides an important safeguard for small investors, and therefore contributes positively to liquidity of the overall market. However, bond markets typically remain a wholesale market, and the OTC may play a more important role. In some countries, the authorities have taken steps to formalize OTC activities, with a view to achieving some benefits of exchange-based trading within an OTC setting.

166. In the case of Mauritius, issuance procedures for corporate bonds should be simplified and transparency strengthened in the current draft of the Security Act and other related laws. Although private placement has a low cost compared with public issuance, Mauritius should exercise caution on private placement, especially if it wants to develop a regional corporate bond market.

167. It is expected that Mauritius would have difficulties in increasing liquidity on the secondary corporate bond market. The standardization of the corporate bond contract is helpful for liquidity of the secondary market. In addition, developing a credit derivative market can contribute to increased liquidity.

E. Conclusion

168. Mauritius is both well placed and in need of developing a corporate bond market. The well-developed financial sector, the good legal system, sound corporate governance, a relatively large corporate sector, and strong public institutions serve as good foundations to develop such a market. In addition, institutional investors such as NBFIs are seeking long-term investment opportunities. Furthermore, Mauritius’s corporate sector needs a lower-cost financing option than currently dominant bank loans. Also, the corporate bond market allows firms to issue longer-term debts for larger projects and other capital-intensive investments necessary for long-term growth. Finally, the development of a corporate bond market is also timely, given the current low interest rate environment and widening differential between average T-bill yield and average bank lending rate.

169. However, developing an efficient corporate bond market in Mauritius requires a well-designed strategy, long-term reform efforts, and an active government role. In light of the emerging market experiences discussed in the previous sections, the following factors are critical: (i) improving the legal framework; (ii) developing the benchmarks;(iii) improving credit risk assessment skills;(iv) enlarging the investor base; (v) building the issuer base; and (vi) developing efficient primary and secondary bond markets.

References
Table 1.Mauritius: GDP Real Growth Rates by Industrial Origin, 1999-2003(Annual change in percent)
1999200020012002

Rev. Est.
2003

Prov.
Agriculture, forestry, hunting, and fishing-25.833.37.2-14.41.4
Sugarcane growing-43.964.59.9-19.32.7
Other agriculture3.19.44.3-8.40.0
Mining and quarrying3.03.03.0-50.03.0
Manufacturing2.07.94.4-2.10.3
Sugar milling-45.064.59.9-19.32.7
Export processing zone6.06.04.4-6.0-4.0
Other manufacturing5.17.04.14.24.4
Electricity, gas, and water8.623.211.22.35.4
Construction8.57.51.57.612.0
Wholesale and retail trade, repairs and personal and household goods5.13.23.23.23.2
Wholesale and retail trade5.03.03.03.03.0
Other retail services7.78.08.08.08.0
Hotels and restaurants4.013.51.03.22.7
Transport, storage, and communications7.411.48.96.76.4
Financial intermediation10.314.611.02.06.1
Insurance6.05.010.08.06.2
Banking and other (including offshore)12.218.511.40.06.1
Real estate, renting, and business activities6.26.47.26.56.6
Ownership of dwellings3.23.13.63.23.2
Other9.79.910.89.59.4
Public administration, defense, and social security3.64.53.96.34.8
Education6.48.84.75.06.2
Health and social work7.86.15.88.37.4
Other services7.05.36.96.07.6
Imputed bank service charges12.218.57.05.55.1
GDP at basic prices2.39.35.61.94.4
Taxes on products (net of subsidies)6.03.92.53.04.0
GDP at market prices2.88.65.22.04.4
Source: Central Statistics Office, National Accounts of Mauritius.
Source: Central Statistics Office, National Accounts of Mauritius.
Table 2.Mauritius: GDP at Current Prices by Industrial Origin, 1999-2003(In millions of Mauritian rupees)
1999200020012002

Rev. Est.
2003

Prov.
Agriculture, forestry, hunting, and fishing5,6137,1448,4347,9108,440
Sugarcane growing2,4333,7424,6464,1024,500
Other agriculture3,1803,4023,7883,8083,940
Mining and quarrying1341421507580
Manufacturing22,43224,70227,42328,27829,401
Sugar milling5468401,4361,2681,390
Export processing zone11,69712,52313,68113,60013,450
Other manufacturing10,18911,33912,30613,40914,560
Electricity, gas, and water1,4121,8202,6342,9713,365
Construction5,6206,2256,5407,3198,450
Wholesale and retail trade and other retail services12,31213,01013,74514,71516,025
Wholesale and retail trade11,84212,46413,12514,00015,200
Other retail services470545620715825
Hotels and restaurants5,6305,8607,4307,5507,990
Transport, storage, and communications11,31413,57715,12416,84418,735
Financial intermediation7,6079,55511,47211,90113,485
Insurance2,2202,4002,8513,2513,700
Banking and other (including offshore)5,3877,1568,6228,6509,785
Real estate, renting, and business activities8,4319,37210,51711,74313,144
Ownership of dwellings4,3584,6725,0345,4065,805
Other4,0734,7005,4836,3377,340
Public administration, defense, and social security6,4027,0007,4388,1069,315
Education4,3004,8335,2225,6616,460
Health and social work2,7543,0323,3113,7224,340
Other services3,7233,9524,4074,8685,515
Imputed bank service charges-4,356-5,707-6,290-6,968-7,650
GDP at factor cost93,328104,517117,558124,696137,094
Sugar2,9794,5826,0835,3705,890
Nonsugar90,34999,935111,475119,326131,204
Net indirect taxes14,11614,97714,49816,95119,700
GDP at market prices107,444119,494132,056141,647156,794
Source: Central Statistics Office, National Accounts of Mauritius.
Source: Central Statistics Office, National Accounts of Mauritius.
Table 3.Mauritius: Real Growth Rates of Expenditure on GDP, 1999-2003(Annual change in percent)
1999200020012002

Rev. Est.
2003

Prov.
Consumption4.24.03.23.33.7
Private3.93.52.82.83.6
Government5.66.55.35.64.6
Gross fixed capital formation22.1-8.22.71.911.2
Private10.60.8-2.72.0-5.5
Public 1/53.1-25.616.81.348.2
Exports1.44.017.4-7.0-3.0
Goods excluding Freeport activities, f.o.b.-3.70.111.7-5.4-4.7
Freeport activities, f.o.b.-18.035.546.2-13.1-1.4
Nonfactor services13.96.320.6-8.0-1.0
Imports4.72.24.6-4.3-1.3
Goods excluding Freeport activities, f.o.b.9.37.5-0.6-2.5-1.3
Freeport activities, f.o.b.-21.435.744.0-23.1-10.8
Nonfactor services-3.18.811.1-4.20.5
GDP at market prices2.88.65.22.04.4
Source: Central Statistics Office, National Accounts of Mauritius.

Includes purchases of ships and/or aircraft.

Source: Central Statistics Office, National Accounts of Mauritius.

Includes purchases of ships and/or aircraft.

Table 4.Mauritius: Expenditure on GDP at Current Prices, 1999-2003(In millions of Mauritian rupees)
1999200020012002

Rev. Est.
2003

Prov.
Consumption82,90389,52196,864106,240117,050
Private68,71073,93980,11288,03896,350
Government14,19315,58216,75318,20220,700
Gross fixed capital formation29,67628,06929,79831,36935,860
Private19,59020,34020,46321,59020,965
Public 1/10,0867,7299,3359,77914,895
Increase in stocks-1,3732,576-2,434-1,197895
Net exports-3,762-6727,8275,2332,990
Exports69,09973,84190,46388,30189,080
Goods, f.o.b.43,14045,70754,84653,89353,660
Nonfactor services25,95928,13435,61734,40835,420
Imports72,86174,51382,63683,06886,090
Goods, f.o.b.55,49854,48359,03759,32661,045
Nonfactor services17,36320,03023,59923,74225,045
GDP at market prices107,444119,494132,055141,645156,794
Memorandum items:
Domestic savings24,54129,97335,19035,40539,745
Domestic investment28,30330,64527,36330,17236,755
Resource gap3,762672-7,827-5,233-2,990
Source: Central Statistics Office, National Accounts of Mauritius.

Includes purchases of ships and/or aircraft in 1999 and 2001.

Source: Central Statistics Office, National Accounts of Mauritius.

Includes purchases of ships and/or aircraft in 1999 and 2001.

Table 5.Mauritius: Real Growth Rates of Gross Domestic Fixed Capital Formation, 1999-2003(Annual change in percent)
1999200020012002

Rev. Est.
2003

Prov.
By type of capital goods22.1-8.22.71.911.2
Residential building3.37.35.0-5.615.2
Nonresidential building25.911.2-5.722.36.2
Other construction and works4.86.010.011.425.6
Transport equipment
Passenger cars2.7-2.5-2.419.26.4
Other equipment 1/191.065.1108.247.245.4
Machinery and other equipment17.9-8.1-11.05.11.1
By industrial sector22.1-8.22.71.911.2
Agriculture, forestry, hunting, and fishing4.1-22.2-9.523.9-6.4
Manufacturing5.60.0-5.68.10.7
Of which: export processing zone13.0-5.8-0.5-18.56.4
Electricity, gas and water11.7-28.8-19.6-17.143.5
Construction-4.28.0-19.1-49.9108.2
Wholesale and retail trade9.713.7-8.515.6-3.6
Restaurants and hotels64.1-0.2-2.932.8-35.8
Transport, storage, and communications 1/86.0-39.939.4-31.028.1
Financial intermediation-6.9-16.021.433.8-12.2
Real estate, renting, and business activities4.48.40.1-3.719.8
Ownership of dwellings3.37.35.0-5.615.2
Other12.915.9-32.115.1114.8
Public administration, defense, and cumpulsory social security36.6-3.7-13.141.816.3
Education-16.69.7-0.696.718.5
Health and social work-28.345.8-8.876.2-5.6
Other services-31.9147.412.09.453.2
Source: Central Statistics Office, National Accounts of Mauritius.

Includes purchases of ships and/or aircraft.

Source: Central Statistics Office, National Accounts of Mauritius.

Includes purchases of ships and/or aircraft.

Table 6.Mauritius: Composition of Gross Domestic Fixed Capital Formation at Current Prices, 1999-2003
1999200020012002

Rev. Est.
2003

Prov
(In millions of Mauritian rupees)
By type of capital goods29,67628,06929,79831,36935,860
Residential building5,4606,0356,5256,4087,605
Nonresidential building5,0665,8025,6357,1707,845
Other construction and works3,0503,3303,7744,3715,655
Transport equipment5,4172,7924,5113,2974,215
Passenger cars1,3101,3161,3301,6011,725
Other equipment 1/4,1071,4763,1811,6962,490
Machinery and other equipment10,68310,1109,35310,12310,540
By industrial sector29,67628,06929,79831,36935,860
Agriculture, forestry, hunting, and fishing864692648827795
Manufacturing4,3324,4644,3724,8725,045
Of which: export processing zone1,7551,7021,7581,4751,615
Electricity, gas and water2,6161,9181,5941,3712,025
Construction545606509260555
Wholesale and retail trade, repairs and personal and household services1,9322,2632,1402,5512,520
Hotels and restaurants2,8372,9152,9204,0232,660
Transport, storage, and communications 1/7,3214,5336,5474,6406,080
Financial intermediation629544684942850
Real estate, renting, and business activities6,2196,9417,1627,1599,260
Ownership of dwellings5,4606,0356,5256,4087,605
Other7599066377511,655
Public administration, defense, and cumpulsory social security1,2881,2781,1461,6802,010
Education4404975101,0411,270
Health and social work235353334607590
Other services4181,0651,2321,3962,200
(In percent of total)
By type of capital goods100.0100.0100.0100.0100.0
Residential building18.421.521.920.421.2
Nonresidential building17.120.718.922.921.9
Other construction and works10.311.912.713.915.8
Transport equipment18.39.915.110.511.8
Passenger cars4.44.74.55.14.8
Other equipment 1/13.85.310.75.46.9
Machinery and other equipment36.036.031.432.329.4
By industrial sector100.0100.0100.0100.0100.0
Agriculture, forestry, hunting, and fishing2.92.52.22.62.2
Manufacturing14.615.914.715.514.1
Of which: export processing zone5.96.15.94.74.5
Electricity, gas and water8.86.85.34.45.6
Construction1.82.21.70.81.5
Wholesale and retail trade6.58.17.28.17.0
Restaurants and hotels9.610.49.812.87.4
Transport, storage, and communications 1/24.716.122.014.817.0
Financial intermediation2.11.92.33.02.4
Real estate, renting, and business activities21.024.724.022.825.8
Ownership of dwellings18.421.521.920.421.2
Other2.63.22.12.44.6
Public administration, defense, and cumpulsory social security4.34.63.85.45.6
Education1.51.81.73.33.5
Health and social work0.81.31.11.91.6
Other services1.43.84.14.56.1
Source: Central Statistics Office, National Accounts of Mauritius.

Includes purchases of ships and/or aircraft.

Source: Central Statistics Office, National Accounts of Mauritius.

Includes purchases of ships and/or aircraft.

Table 7.Mauritius: Sugar Cultivation, Yields, and Output, 1999-2003

(Area in thousands of arpents; yields in metric tons per arpent harvested; and production, accruals, and consumption in thousands of metric tons, unless otherwise indicated) 1/

19992000200120022003
Rev.Rev. Est.Prov.
Area under cultivation187.1182.3181.2178.9...
Miller-planters 2/86.691.991.676.6...
Planters100.590.489.6102.3...
Area harvested 3/171.7173.1173.4171.2169.7
Miller-planters 2/78.785.084.170.267.0
Planters93.088.189.3101.0102.7
Percent harvested91.895.095.795.7...
Miller-planters 2/90.992.591.891.6...
Planters92.597.599.798.7...
Cane yield22.629.533.428.530.6
Miller-planters 2/28.033.937.332.734.5
Planters18.125.339.725.628.1
Cane production3,882.05,109.05,792.04,874.05,199.0
Miller-planters 2/2,203.02,878.03,139.02,293.02,308.7
Planters1,679.02,231.02,653.02,581.02,890.3
Commercial sugar recovered (percent of cane)9.611.111.110.710.3
Sugar yield2.23.33.73.03.2
Sugar production373.4569.3645.0520.9537.2
White2.43.15.07.10.5
Raw371.0566.2640.0513.8536.7
Sugar accruals 4/373.3569.3645.0520.9537.2
Planters...............
Miller-planters 5/...............
Millers...............
Molasses production124.7144.0174.0140.8160.0
Memorandum items:
Sugar production by fiscal year 5/6/619.1389.0583.9615.3...
Of which: local consumption 5/7/3.70.00.026.4...
Sources: Mauritius Chamber of Agriculture; Central Statistics Office; and IMF staff estimates.

One arpent = 1.043 acres, or 0.4221 hectare.

Mills and estates, including legally separate companies under same ownership.

Difference from area cultivated is attributable mainly to replanting and rotational/fallow periods.

Reflects millers’ 26 percent share of sugar produced as compensation for milling, as adjusted for mill efficiency.

Fiscal-year data relate to 12-month period ending in June of current year.

Total crop from harvest beginning approximately one month before the start of the fiscal year indicated, less the output in June immediately before the indicated fiscal year, plus the June output of the next crop, most of which is produced in the next fiscal year.

During 2001/02, 17,050 tons of sugar were imported for local consumption. Imports for the 2002/03 period were 32,000 tons for local consumption.

Sources: Mauritius Chamber of Agriculture; Central Statistics Office; and IMF staff estimates.

One arpent = 1.043 acres, or 0.4221 hectare.

Mills and estates, including legally separate companies under same ownership.

Difference from area cultivated is attributable mainly to replanting and rotational/fallow periods.

Reflects millers’ 26 percent share of sugar produced as compensation for milling, as adjusted for mill efficiency.

Fiscal-year data relate to 12-month period ending in June of current year.

Total crop from harvest beginning approximately one month before the start of the fiscal year indicated, less the output in June immediately before the indicated fiscal year, plus the June output of the next crop, most of which is produced in the next fiscal year.

During 2001/02, 17,050 tons of sugar were imported for local consumption. Imports for the 2002/03 period were 32,000 tons for local consumption.

Table 8.Mauritius: Sugar Exports, 1998/99-2002/03 1/
1998/991999/002000/012001/022002/03

Rev. Est.
(In thousands of metric tons)
Volume shipped628.5378.5565.0589.9515.0
European Union524.8368.8540.0520.0484.9
United States18.56.05.019.81.9
World market4.53.76.06.56.4
Special Preferential Sugar Agreement 2/80.70.014.043.621.8
(Mauritian rupees per metric ton)
Unit value14,69114,26712,84414,65716,061
European Union15,16614,28412,90014,87716,232
United States12,70316,16717,60013,33315,789
World market9,1119,4599,66710,76911,188
Special Preferential Sugar Agreement 2/12,367010,35713,21113,716
(In millions of Mauritian rupees)
Value, f.o.b.9,2335,4007,2578,6468,272
European Union7,9595,2686,9667,7367,871
United States235978826430
World market4135587072
Special Preferential Sugar Agreement 2/9980145576299
(U.S. dollars per metric ton)
Unit value591.9559.2465.5487.0563.6
European Union611.1559.9467.6494.3569.6
United States511.8633.7637.9443.0554.0
World market367.1370.8350.4357.8392.5
Special Preferential Sugar Agreement 2/498.3...375.4439.0481.2
(In millions of U.S. dollars)
Value, f.o.b.372.0211.7263.0287.3290.2
European Union320.7206.5252.5257.1276.2
United States9.53.83.28.81.1
World market1.71.42.12.32.5
Special Preferential Sugar Agreement 2/40.2...5.319.110.5
(Mauritian rupees per U.S. dollars)
Conversion factor24.81925.51227.59130.09528.500
Sources: Mauritius Sugar Syndicate (MSS); and Bank of Mauritius.

Fiscal year from July to June. Data differ somewhat from those presented by the MSS on a crop-year basis, which refer to disposal of a given year’s crop (from June when harvest starts, to the following June).

The Special Preferential Sugar Agreement was signed on June 1, 1995 between Atlantic, Caribbean, and Pacific (ACP) sugar-supplying countries and the European Union to compensate for the European cane refiners’ deficit for a period of six years, to 2001. It provides Mauritius with the right to export a variable tonnage of approximately 80,000 tons of sugar.

Sources: Mauritius Sugar Syndicate (MSS); and Bank of Mauritius.

Fiscal year from July to June. Data differ somewhat from those presented by the MSS on a crop-year basis, which refer to disposal of a given year’s crop (from June when harvest starts, to the following June).

The Special Preferential Sugar Agreement was signed on June 1, 1995 between Atlantic, Caribbean, and Pacific (ACP) sugar-supplying countries and the European Union to compensate for the European cane refiners’ deficit for a period of six years, to 2001. It provides Mauritius with the right to export a variable tonnage of approximately 80,000 tons of sugar.

Table 9.Mauritius: Ex-Syndicate Sugar Prices, 1998/99-2002/03 1/(Mauritian rupees per ton)
1998/991999/002000/012001/022002/03

Rev. Est.
Average sugar prices (ex-millers)13,25012,37411,57012,83514,047
Average price, after taxes and crop insurance premiums12,06412,37411,57012,83514,047
Memorandum items:
Average SIFB insurance premiums1,1661,7971,0481,1231,531
Bagasse proceeds 2/6612097100125
Source: Mauritius Sugar Syndicate.

Marketing years.

Paid to planters but not to millers.

Source: Mauritius Sugar Syndicate.

Marketing years.

Paid to planters but not to millers.

Table 10.Mauritius: Revenue and Expenditure of Sugar Estates with Factories, 1999-2003 1/2/(In millions of Mauritian rupees, unless otherwise indicated)
1999200020012002

Est.
2003

Prov.
Production and prices(Production in thousands of metric tons; and prices in Mauritian rupees per metric ton)
Sugar output (at 98.5 polarization)
National total374569646521537
Estates with factories266396442367371
Sugar price, ex-syndicate 3/12,37411,60212,87514,09715,200
Molasses output
National total127146175141160
Estates with factories79901058799
Molasses price145436902599350
(In millions of Mauritian rupees)
Revenue4,9905,0976,1085,9286,466
Sugar 3/3,2914,5975,6945,1745,634
Molasses1139955235
Electricity, white sugar, and by-products186267309270422
Crop insurance compensation1,50219410432375
Operating expenditure4,9745,5425,7945,1065,272
Wages and salaries2,6223,0423,1302,2692,326
Agricultural workers13671582162711801209
Nonagricultural workers690791814590605
Administrative staff565669689499512
Supplies and other charges19142071218023302360
Supplies759806846955965
Interest371461496458468
Other charges784804838917927
Centralisation costs0003551
Crop insurance premium and levy438429484472535
Operating surplus/deficit (-)17-4453158211194
VRS - amortization0000-400
Depreciation per accounts (-)-492-475-481-465-469
Profit/loss (-) on sugar-475-920-166356325
Net nonsugar income 4/11046412326900686
Receipts 5/132991426671200986
Payments (-)-225-273-341-300-300
Overall profit/loss (-)629-279216012561011
(In millions of Mauritian rupees, unless otherwise indicated)
Transfer to modernization and agricultural diversification reserve 6/-7-33-32-175-175
Special levy00000
Memorandum items:
Income taxes00000
Depreciation00000
Excess over accounts00000
Additions to fixed assets00000
Sources: Mauritius Chamber of Agriculture; Mauritius Sugar Authority; and IMF staff estimates.

Based on companies’ audited accounts, in which accounting practices vary somewhat, supplemented by questionnaire returns.

Accounting-year basis. Mainly calendar years, except Illovo and Mon Trésor (April-March). Revenues include receipts (partly estimated) from current year’s crop through following June 30.

Less Mauritius Sugar Syndicate marketing expenses and cesses; before export taxes and insurance premiums. Reflects actual final price, whereas company accounts are closed using an estimate.

Income on other crops and nonagricultural activities.

Figure does not include additional receipts relating to the Lllovo deal.

Producers are requested to credit an aggregate amount of MUR 175 million to a modernization and agricultural diversification reserve for each of the years 1994-2003. Transfers from this reserve are allowed on approved investments.

Sources: Mauritius Chamber of Agriculture; Mauritius Sugar Authority; and IMF staff estimates.

Based on companies’ audited accounts, in which accounting practices vary somewhat, supplemented by questionnaire returns.

Accounting-year basis. Mainly calendar years, except Illovo and Mon Trésor (April-March). Revenues include receipts (partly estimated) from current year’s crop through following June 30.

Less Mauritius Sugar Syndicate marketing expenses and cesses; before export taxes and insurance premiums. Reflects actual final price, whereas company accounts are closed using an estimate.

Income on other crops and nonagricultural activities.

Figure does not include additional receipts relating to the Lllovo deal.

Producers are requested to credit an aggregate amount of MUR 175 million to a modernization and agricultural diversification reserve for each of the years 1994-2003. Transfers from this reserve are allowed on approved investments.

Table 11.Mauritius: Nonsugar Agricultural Production, 1999-2003(In thousands of metric tons, unless otherwise indicated)
19992000200120022003
Rev. Est.Prov.Prov.
Tea
Area harvested (in thousands of arpents) 1/1.61.61.61.61.6
Production7.68.98.48.3
Green leaf processed7.06.37.47.06.9
Manufactured tea1.51.31.51.41.4
Green leaf yields (tons per hectare)10.69.511.311.010.2
Food crops
Area harvested (in thousands of arpents) 1/14.317.418.918.0...
Production85.7114.5133.5125.0...
Potatoes15.714.518.817.6...
Irish15.313.818.317.0...
Sweet0.40.70.50.6...
Tomatoes8.09.711.711.0...
Eggplant (brinjal)1.72.22.72.5...
Bananas7.68.510.17.0...
Pineapples1.03.46.06.0...
Groundnuts0.30.40.30.4...
Maize 2/0.20.60.40.4...
Manioc0.10.20.20.2...
Ginger0.10.50.91.0...
Other 3/51.074.582.478.9...
Sources: Mauritius Chamber of Agriculture; and Ministry of Agriculture, Food Technology, and Natural Resources.

One arpent = 1.043 acres, or 0.4221 hectare.

Includes maize that is sent to drying stations; does not include fodder.

Includes beans and peas, eddoes (arouille), creepers (cucumber and squash), and mixed vegetables (beets, cabbage, carrots, cauliflower, chilies, garlic, onions, and lettuce).

Sources: Mauritius Chamber of Agriculture; and Ministry of Agriculture, Food Technology, and Natural Resources.

One arpent = 1.043 acres, or 0.4221 hectare.

Includes maize that is sent to drying stations; does not include fodder.

Includes beans and peas, eddoes (arouille), creepers (cucumber and squash), and mixed vegetables (beets, cabbage, carrots, cauliflower, chilies, garlic, onions, and lettuce).

Table 12.Mauritius: Export Processing Zone (EPZ) Activity, 1999-2003
1999200020012002

Rev.
2003

Prov.
(Numbers)
Total firms 1/512518522506506
Textiles285286286274272
Other227232236232234
Total employees 1/91,37490,68287,60787,20477,623
Textiles80,96080,00177,00376,57067,251
Other10,41410,68110,60410,63410,372
(In millions of Mauritian rupees)
EPZ investments1,7551,7021,7581,4751,614
Plant and machinery1,6351,5571,4441,4521,506
Buildings12014531423108
EPZ value added
Basic prices11,69712,52313,68113,60013,450
Constant 1992 prices7,4747,9228,2717,7747,463
Source: Central Statistics Office, Digest of Industrial Statistics.

As at December.

Source: Central Statistics Office, Digest of Industrial Statistics.

As at December.

Table 13.Mauritius: Electricity Production and Consumption, 1999-2003 1/
1999200020012002

Rev. Est.
2003

Prov.
(In megawatts)
Plant effective capacity425.7497.9513.5513.5513.5
(In percent of total)
Hydroelectric effective capacity12.810.910.910.910.6
Of which: purchases 2/0.10.10.10.10.1
Thermal effective capacity87.289.189.189.189.4
Of which: purchases 2/21.227.227.227.229.4
(In millions of kilowatt-hours)
Energy generated1,422.61,564.91,657.11,715.11,840.0
Hydroelectric29.695.370.485.6117.7
Thermal1,393.01,469.61,586.61,629.51,722.3
Energy purchased from sugar and other factories343.8601.2710.2746.6729.4
Energy sold1,229.31,358.51,450.01,502.01,607.0
(Annual growth in percent, unless otherwise indicated)
Energy generated4.210.05.93.57.3
Energy purchased from sugar and other factories34.374.8718.125.13-2.30
Energy sold4.510.56.73.67.0
Consumers at year’s end (numbers)304,029313,963323,213330,323338,563
Of which: domestic (percent of total)89.289.189.289.289.3
Annual percentage increase of consumers3.53.32.92.22.5
Average selling prices (Mauritian cents per kilowatt-hour)211.0230.0269.0304.1306.0
(In millions of Mauritian rupees, unless otherwise indicated)
Central Electricity Board indicators
Revenue2,659.03,300.44,136.94,842.85,179.2
Current expenditure2,839.53,675.73,943.14,663.34,715.7
Persons employed (number)1,8541,8301,8071,7791,739
Sources: Central Statistics Office; and Central Electricity Board (CEB).

From sugar mills and other factories generating electricity.

Sources: Central Statistics Office; and Central Electricity Board (CEB).

From sugar mills and other factories generating electricity.

Table 14.Mauritius: Building Permits Issued, 1999-2003 1/
1999200020012002

Rev. Est.
2003

Prov.
Permits issued(Numbers)
Total8,8178,8679,4959,0549,123
By building type
Residential8,2808,3318,9998,6718,712
New buildings4,6574,5384,4594,1674,301
Additions3,6233,7934,5404,5044,411
Nonresidential537536496383411
By location
Urban4,4373,8563,9033,6893,723
Rural4,3805,0115,5925,3655,400
Floor area(Thousands of square meters)
Total1,5461,5101,5041,5421,638
By building type
Residential1,2441,1701,2561,2221,230
New buildings865785794758769
Additions379385462464461
Nonresidential302340248320408
By location
Urban731592646651677
Rural815918858891961
Source: Central Statistics Office.

Includes new buildings and additions for which permits have been issued by municipalities and the central government.

Source: Central Statistics Office.

Includes new buildings and additions for which permits have been issued by municipalities and the central government.

Table 15.Mauritius: Tourist Arrivals, Capacity, and Earnings, 1999-2003
1999200020012002

Rev. Est.
2003

Prov.
Arrivals by country of residence
Africa156,314163,921168,522172,641174,430
Kenya1,6551,8011,7341,5071,510
Madagascar7,8807,0576,6749,41711,044
Reunion (France)83,74986,94591,14096,37595,679
Seychelles7,8939,22910,68713,4689,869
South Africa46,58348,68347,88242,68545,756
Zimbabwe2,6063,4353,8603,1852,343
Other Africa5,9486,7716,5456,0048,229
Europe378,741439,989437,305451,504465,379
Belgium9,58610,99810,39810,57910,170
France175,431198,423197,595202,869200,229
Germany45,20652,86950,86653,76253,970
Italy36,67539,00037,34338,26339,774
Switzerland16,28120,47318,42717,37117,929
United Kingdom58,68374,48877,88880,66791,210
Other Europe36,87943,73844,78847,99352,097
Other43,03052,54354,49157,50362,209
Australia8,0768,7718,7908,3879,103
India13,58317,24118,89020,89825,367
Japan2,3242,389.001,589.001,958.001,572.00
Singapore3661.04104.03431.03114.02102.0
United States3345.03704.03923.04116.04505.0
Other12041.016334.017868.019030.019560.0
All countries578,085656,453660,318681,648702,018
Tourism capacity, occupancy, activity, and earnings
Hotels9295959597
Rooms8,2558,6579,0249,6239,647
Beds16,94717,77618,35019,59719,727
Occupancy rates for all hotels (percent)
Room...70666763
Bed...62585955
Nights spent (thousands)5,7296,4136,5286,7696,952
Average stay (nights)1010101010
Gross earnings
In millions of Mauritian rupees13,66814,23418,16618,32819,397
In millions of U.S. dollars543542624612695
Average earnings per tourist
In Mauritian rupees23,64421,68327,51126,88827,630
In U.S. dollars939826944897974
Source: Central Statistics Office.
Source: Central Statistics Office.
Table 16.Mauritius: Estimated Labor Force and Employment, 1999-2003 1/
1999200020012002

Rev. Est.
2003

Prov.
(In thousands of persons)
Population aged 12+ years 2/925.9937.6951.2963.7977.0
Female469.1475.7482.8489.4496.0
Male456.8461.9468.4474.3481.0
Labor force519.5528.6538.5541.1549.3
Female177.1181.4186.4187.4190.3
Mauritian168.6171.8175.7176.8180.0
Foreign8.59.610.710.610.3
Male342.4347.2352.1353.7359.0
Mauritian338.0342.2346.3347.3351.1
Foreign4.45.05.86.47.9
Employment480.5483.6490.8490.1494.9
Large establishments 3/4/297.4297.7301.0296.2295.9
Of which: foreign12.914.616.517.018.2
Female109.7110.5113.0108.3108.0
Male187.7187.2188.0187.9187.9
Other firms and self183.1185.9189.8193.9199.0
Female52.254.456.257.859.6
Male130.9131.5133.6136.1139.4
Employment in large establishments by economic activity 4/5/297.7297.0301.2294.4298.5
Agriculture, forestry, and fishing34.332.731.325.323.4
Of which: sugar0.024.823.517.615.5
Mining and quarrying0.20.20.20.20.2
Manufacturing115.6115.0117.0111.0108.9
Of which: sugar3.93.43.23.12.2
Of which: EPZ 6/88.988.290.884.582.5
Electricity, gas, and water3.13.03.03.03.0
Construction13.613.513.313.314.6
Wholesale and retail trade16.416.516.516.517.7
Hotels and restaurants13.014.516.317.118.2
Transport, storage, and communications16.416.116.617.518.1
Financial intermediation6.66.77.17.07.4
Real estate, renting, and business activities8.38.98.98.78.9
Public administration and defense34.834.935.737.838.9
Education17.917.818.318.920.6
Health and social work11.411.311.011.011.6
Other community, social, and personal service6.26.06.27.17.0
Unemployment39.045.047.751.054.4
Female15.216.517.221.322.7
Male23.828.530.529.731.7
(In percent)
Labor force participation rate56.156.456.656.156.2
Female37.838.138.638.338.4
Male75.075.275.274.674.6
Unemployment rate7.78.89.19.710.2
Female9.09.69.812.012.6
Male7.08.38.88.69.0
Employment growth rate1.20.61.5-0.11.0
Female2.51.92.6-1.80.9
Male0.50.00.90.71.0
Source: Central Statistics Office, Survey of Employment and Earnings and Digest of Labour Statistics.

Data are for the islands of Mauritius and Rodrigues.

Includes foreigners.

Average of March and September survey results.

Covers large establishments, i.e., nonagricultural establishments with ten or more employees, all government, sugar plantations of ten hectares or more, tea plantations of two hectares or more, all flue-cured tobacco, and other agricultural units with ten or more employees; excludes self-employed, piece-rate employees working at home, and unpaid family workers. Includes foreign workers.

At March of each year.

Excludes nonmanufacturing EPZ establishments.

Source: Central Statistics Office, Survey of Employment and Earnings and Digest of Labour Statistics.

Data are for the islands of Mauritius and Rodrigues.

Includes foreigners.

Average of March and September survey results.

Covers large establishments, i.e., nonagricultural establishments with ten or more employees, all government, sugar plantations of ten hectares or more, tea plantations of two hectares or more, all flue-cured tobacco, and other agricultural units with ten or more employees; excludes self-employed, piece-rate employees working at home, and unpaid family workers. Includes foreign workers.

At March of each year.

Excludes nonmanufacturing EPZ establishments.

Table 17.Mauritius: Average Earnings by Sector—Monthly Paid Employees, 1999-2003 1/(Mauritian rupees per employee per month)
19992000200120022003
Rev. Est.Prov.
Agriculture, forestry, and fishing6,1466,8187,9108,5279,374
Of which: sugar5,6256,2687,1167,7538,826
Mining and quarrying10,90511,42712,82213,3968,906
Manufacturing7,1057,7038,1278,5669,430
Of which: export processing zone (EPZ)6,4236,9447,1947,8218,542
Electricity, gas, and water12,15713,56915,69617,51918,987
Construction8,88410,23210,27811,21812,216
Wholesale and retail trade9,0989,78710,78010,95811,486
Hotels and restaurants7,0997,4377,8198,0568,444
Transport, storage, and communications10,50812,02112,50813,37714,484
Financial intermediation13,51514,81416,53817,23017,817
Real estate, renting, and business activities9,93711,32112,30112,49913,682
Public administration and defense9608.010208106841102211256
Education10,60811,25611,23511,68212,458
Health and social work10,13711,29012,39612,12812,900
Other community, social, and personal service8,2878,3648,6838,3159,385
Total, large establishments8,0809,57910,21610,68611,439
Of which: EPZ6,4286,9557,2427,8508,617
Memorandum items:
Daily paid employees 2/4,8105,1745,4605,6686,162
Of which: EPZ 2/3,9264,1344,4984,6284,914
Source: Central Statistics Office, Survey of Employment and Earnings in ‘large’ establishments.

Covers large establishments. Employees paid monthly account for approximately two-thirds of such employment and four-fifths of earnings reported.

Daily earnings converted to a monthly basis by assuming 26 working days in a month.

Source: Central Statistics Office, Survey of Employment and Earnings in ‘large’ establishments.

Covers large establishments. Employees paid monthly account for approximately two-thirds of such employment and four-fifths of earnings reported.

Daily earnings converted to a monthly basis by assuming 26 working days in a month.

Table 18.Mauritius: Labor Costs and Productivity, 1999-2003 1/(Indices, 1982=100)
1999200020012002

Rev. Est.
2003

Prov.
Labor cost (1)859.0923.5993.01,059.01,174.4
Real output (2)248.2271.3286.5291.9304.8
Employment (3) 2/167.6169.4170.6171.3173.5
Consumer price index (4)315.8328.5346.3368.4382.8
Unit labor cost (5) = (1)/(2)346.1340.4346.6362.8385.3
Average real wage 3/ (6) = (1)/[(3)*(4)]162.3166.0168.1167.8176.8
Labor productivity (7) = (2)/(3)148.1160.2167.9170.4175.7
Source: Central Statistics Office, Digest of Productivity and Competitiveness Statistics.

Total economy.

Number of persons.

Covers the overall compensation of employees, including wages, salaries, overtime, bonuses, and contributions to pension funds.

Source: Central Statistics Office, Digest of Productivity and Competitiveness Statistics.

Total economy.

Number of persons.

Covers the overall compensation of employees, including wages, salaries, overtime, bonuses, and contributions to pension funds.

Table 19.Mauritius: Cost Structure and Prices of Petroleum Products, 1998/99-2002/03 1/(In percent of the sales price, unless otherwise specified)
1998/991999/002000/012001/02

Prov.
2002/03

Prov.
Premium gasoline
Import cost, c.i.f.25.149.437.029.637.1
Distribution costs and overheads1.93.65.64.11.6
Taxes55.2109.563.046.259.7
Profits (loss -)-5.7-62.5-5.720.11.6
STC sales price (Mauritian rupees per liter)16.610.516.6 2/16.6 2/16.4 3/
Retail price (Mauritian rupees per liter)14.212.819.50 2/19.85 2/20.40 3/
Imports for inland trade (in metric tons)93,75490,10186,93688,45987,043
Diesel
Import cost, c.i.f.43.485.765.857.067.7
Distribution costs and overheads3.65.69.16.41.7
Taxes32.464.525.913.313.4
Profits (loss -)20.6-55.8-0.823.317.2
STC sales price (Mauritian rupees per liter)5.85.09.3 2/9.3 2/9.2 3/
Retail price (Mauritian rupees per liter)7.76.711.40 2/11.60 2/11.90 3/
Imports for inland trade (in metric tons)166,377178,503196,940190,213209,101
Kerosene
Import cost, c.i.f.62.1135.893.4371.9986.39
Distribution costs and overheads0.45.212.07.82.0
Taxes0.00.00.00.00.0
Profits (loss -)37.4-41.0-5.420.211.6
STC sales price (Mauritian rupees per liter)4.63.57.7 2/7.7 2/7.5 4/
Retail price (Mauritian rupees per liter)5.74.68.75 2/8.75 2/8.75 4/
Imports for inland trade (in metric tons)54,11929,18613,15915,57118,722
Fuel oil
Import cost, c.i.f.55.4103.4118.356.871.6
Distribution costs and overheads0.51.112.24.30.3
Taxes42.974.378.034.328.6
Profits (loss -)1.2-78.7-108.44.6-0.4
STC sales price (Mauritian rupees per liter)3.73.73.78.2 5/7.0 6/
Imports for inland trade (in metric tons)119,042121,18595,24462,61650,888
Source: State Trading Corporation.

Fiscal year from July to June. Cost structure relates to that of the State Trading Corporation (STC).

Effective September 30, 2000.

Effective October 1, 2002.

Effective March 18, 2003.

Effective September 1, 2001.

Effective July 1, 2002.

Source: State Trading Corporation.

Fiscal year from July to June. Cost structure relates to that of the State Trading Corporation (STC).

Effective September 30, 2000.

Effective October 1, 2002.

Effective March 18, 2003.

Effective September 1, 2001.

Effective July 1, 2002.

Table 20.Mauritius: Consumer Price Indices by Major Commodity Groups, January 2001-December 2003 1/
WeightsJan.Feb.Mar.Apr.MayJuneJulyAug.Sep.Oct.Nov.Dec.Year

(Avg.)
(July 1996-June 1997=100)
2001
Food and nonalcoholic beverages36.4120.9121.3120.8121.2121.6123.4124.0124.4124.6125.2126.3127.3123.4
Alcoholic beverages and tobacco8.7160.3161.3161.7161.7161.9166.6173.0173.4173.6174.0174.0176.0168.1
Clothing and footwear7.9115.6115.7115.7115.7115.7115.8116.8116.8116.8116.9117.1117.4116.3
Fuel and light4.4121.9121.9121.9121.9121.9121.9121.9121.9121.9121.9123.8125.5122.4
Housing and household operations13.2119.3120.8121.1121.1121.3121.5123.0123.1123.2123.6123.8124.1122.2
Medical care and health expenses3.8124.6124.7125.0125.4126.2127.0127.4127.6127.9129.4129.6130.2127.1
Transport and communications14.2130.7130.6130.1130.5130.6130.1135.2135.5135.6136.1136.2136.3133.1
Recreation, entertainment, education, and cultural services6.0129.3131.6132.0132.1132.5132.5132.6132.6132.8132.8132.8132.8132.2
Miscellaneous goods and services5.4123.0123.1122.8122.5122.4122.1123.2123.5124.1124.1124.4124.6123.3
Total100.0125.9126.5126.3126.5126.8127.8129.7129.9130.1130.5131.1131.8128.6
Average for fiscal year ended June 30124.9
2002
Food and nonalcoholic beverages36.4129.2131.4133.2133.8134.1133.9
Alcoholic beverages and tobacco8.7176.0176.0176.0176.1176.1176.1
Clothing and footwear7.9117.5117.5117.7117.8117.8117.8
Fuel and light4.4135.8135.8135.8135.8135.8135.8
Housing and household operations13.2126.2126.5126.9127.0127.1127.3
Medical care and health expenses3.8130.4132.1132.3132.7133.4133.6
Transport and communication14.2136.0135.7135.8135.6135.7136.1
Recreation, entertainment, education, and cultural services6.0135.4140.2140.3140.3140.3140.3
Miscellaneous goods and services5.4126.8127.2127.4127.7127.9128.1
Total100.0133.5134.7135.4135.7135.9135.9137.8139.3139.6140.4140.7140.7
(July 2001-June 2002=100)
Weights
Food and nonalcoholic beverages29.9103.2103.2103.8103.8103.6103.2
Alcoholic beverages and tobacco8.6104.5104.1104.6104.8104.7106.2
Clothing and footwear6101.9102.1102.1102.3102.4102.5
Housing, water, electricity, gas and other fuels9.6101.8103.7103.7103.7103.7103.7
Furnishings, household equipment and routine household maintenance8103.7103.4104.2104.0104.3103.6
Health2.8103.8105.5105.9106.8107.2107.7
Transport13.9103.4105.8105.9106.3105.5105.4
Communication3.1101.2101.2101.1122.6122.6121.2
Recreation and culture5.3102.5102.5102.5103.6103.0103.6
Education2.4101.7101.7101.7101.7101.7101.7
Restaurants and hotels5102.9103.3103.5103.9105.4105.6
Miscellaneous goods and services5.4104.2104.4104.70108.1107.9107.8
100103.1103.6104.00105.0104.9104.8
2003Weights
Food and nonalcoholic beverages29.9103.9104.2104.1104.2105.5106.2106.6106.5107.4107.1107.2107.7105.9
Alcoholic beverages and tobacco8.6106.6106.5106.4106.9108.0110.0110.8110.6110.6112.2112.2115.7109.7
Clothing and footwear6.0102.8103.0102.9101.7103.3103.4103.6103.8103.8103.7103.9103.9103.3
Housing, water, electricity, gas and other fuels9.6103.7104.0104.1104.1104.2104.3105.7105.9105.8105.8105.9105.9105.0
Furnishings, household equipment and routine household maintenance8.0104.9105.0104.6104.9104.8104.9106.3106.0106.3106.1106.4105.8105.5
Health2.8107.9108.2108.3108.6108.6109.1110.0109.9110.9112.6113.1113.5110.1
Transport13.9106.0106.0105.6106.2106.3106.6107.2105.8105.4106.0106.2106.7106.2
Communication3.1122.0122.4123.3122.5122.5121.3121.7121.7128.7133.9133.9133.3125.6
Recreation and culture5.3103.9104.1103.9104.3104.5104.5105.1105.1105.2104.8104.5104.7104.6
Education2.4107.1107.1107.1107.1107.1107.1107.1108.5108.5108.5108.5108.5107.7
Restaurants and hotels5.0106.3106.7106.8106.8108.0107.9108.0108.1108.2108.7108.8109.0107.8
Miscellaneous goods and services5.4108.4109.0108.8109.4109.4109.7110.1112.4112.6112.8113.3112.8110.7
Total100.0105.5105.7105.6105.8106.5106.9107.5107.4107.9108.3108.4108.9107.0
Average for fiscal year ended June 30105.1
Source: Central Statistics Office.

As from July 2002, a new series of the Consumer Price Index (CPI) has been introduced. A new basket of goods and services is used for the computation of this index following the 2001/02 Household Budget Survey. The commodities in the basket are classfified according to the UN CCEP (Classificaion of Consumption Expenditure according to Purpose).

Source: Central Statistics Office.

As from July 2002, a new series of the Consumer Price Index (CPI) has been introduced. A new basket of goods and services is used for the computation of this index following the 2001/02 Household Budget Survey. The commodities in the basket are classfified according to the UN CCEP (Classificaion of Consumption Expenditure according to Purpose).

Table 21.Mauritius: Summary of Government Finances, 1998/99-2002/03 1/
1998/991999/002000/012001/022002/03
Rev. Est.Prov.
(In millions of Mauritian rupees)
Total revenue and grants21,32923,50022,70725,27030,298
Tax revenue17,90020,37320,18921,51925,879
Nontax revenue3,2942,9662,3183,4354,056
External grants135161199317363
Total expenditure and net lending24,85127,81029,84633,56939,533
Current expenditure21,84723,37926,78627,88131,538
Wages and salaries7,4577,7638,1818,8549,366
Other goods and services2,1802,3542,7352,9273,168
Interest payments3,6263,8565,5274,5416,390
External interest501453401207189
Domestic interest3,1253,4035,1254,3346,202
Current transfers and subsidies8,5849,40610,34211,55812,614
Capital expenditure and net lending 2/2,1293,5482,3255,6887,995
Expenditure by the Privatization Fund87588373500
Overall balance after grants-3,522-4,310-7,139-8,299-9,235
Financing3,5224,3107,1398,2999,235
External (net)-1,170-510-3,5841,07087
Disbursements4644103491,778923
Amortization-1,634-920-3,932-708-836
Domestic4,0093,8155,6527,2299,299
Banking system (net)-1,5712,579-9591,3142,496
Nonbank5,5801,2366,6115,9156,803
Sale of equity in state-owned enterprises and residual 3/6841,0065,0710-151
(Annual change in percent)
Total revenue and grants15.310.2-3.411.3-1.7
Total expenditure and net lending12.311.97.312.5-0.7
(In percent of GDP)
Total revenue and grants20.120.918.218.420.3
Of which: tax revenue16.918.116.115.717.4
Total expenditure and net lending23.424.723.924.526.5
Current expenditure20.620.821.420.321.2
Capital expenditure and net lending 2/2.03.11.94.15.4
Overall balance after grants-3.3-3.8-5.7-6.0-6.2
Overall balance, excluding exceptional factors 4/-4.6-4.3-7.1-6.6-6.2
External financing-1.1-0.5-2.90.80.1
Domestic financing3.83.44.55.36.2
Of which: banking system-1.52.3-0.81.01.7
Sale of equity in state-owned enterprises and residual 3/0.60.94.10.0-0.1
Sources: Ministry of Finance; and Bank of Mauritius.

Budgetary central government, Government Finance Statistics basis; fiscal year from July to June.

From 1996/97 to 1997/98, net lending includes the on-lending of the proceeds from an international floating rate note (FRN) issue of US$150 million. In 1998/99, it includes the repayment of the FRN on-lending equivalent to 0.8 percent of GDP.

Includes proceeds from the sale of government equity in state-owned enterprises, equivalent to 0.9 percent of GDP in 1996/97, and 5.7 percent of GDP in 2000/01.

Exceptional factors include the on-lending of the proceeds from the FRN equivalent to 2.2 percent of GDP in 1996/97, and to 0.1 percent of GDP in 1997/98. They also include the repayment of the FRN on-lending equivalent to 0.8 percent of GDP in 1998/99, and 1.4 percent of GDP in 2000/01, as well as the proceeds from the sale of fixed assets equivalent to 0.5 percent of GDP in 1998/99 and 0.4 percent of GDP in 1999/2000.

Sources: Ministry of Finance; and Bank of Mauritius.

Budgetary central government, Government Finance Statistics basis; fiscal year from July to June.

From 1996/97 to 1997/98, net lending includes the on-lending of the proceeds from an international floating rate note (FRN) issue of US$150 million. In 1998/99, it includes the repayment of the FRN on-lending equivalent to 0.8 percent of GDP.

Includes proceeds from the sale of government equity in state-owned enterprises, equivalent to 0.9 percent of GDP in 1996/97, and 5.7 percent of GDP in 2000/01.

Exceptional factors include the on-lending of the proceeds from the FRN equivalent to 2.2 percent of GDP in 1996/97, and to 0.1 percent of GDP in 1997/98. They also include the repayment of the FRN on-lending equivalent to 0.8 percent of GDP in 1998/99, and 1.4 percent of GDP in 2000/01, as well as the proceeds from the sale of fixed assets equivalent to 0.5 percent of GDP in 1998/99 and 0.4 percent of GDP in 1999/2000.

Table 22.Mauritius: Revenue and Grants, Budgetary Central Government, 1998/99-2002/03 1/(In millions of Mauritian rupees)
1998/991999/002000/012001/02

Rev. Est.
2002/03

Prov.
Tax revenue17,90020,37320,18921,51925,879
Taxes on net income and profits2,7002,8813,0393,4944,014
Individuals1,3631,5401,5181,6191,859
Corporate1,3371,3411,5211,8752,155
Taxes on property1,2091,2061,3241,2991,375
Land and real estate213218279250306
Financial transactions9969881,0451,0491,068
Registration fees9829601,0171,0281,056
Incorporation and lodging fees101920124
Mortgages598109
Taxes on domestic goods and services8,0059,3399,46610,82113,957
Selective excises1,7762,1602,1072,2992,332
Alcoholic beverages7699469279961,008
Tobacco1,0061,2131,1781,3021,323
Other11111
Taxes on services1,1361,0999579791,069
Gambling and lottery profits765892859891967
Tourism3712069887101
Taxes on use of goods455476477490744
Business licenses141143126112162
Motor vehicles314334351378582
Sales tax on goods/value-added tax4,6395,6045,9257,0539,812
Taxes on international trade5,9736,9356,3495,8936,523
Import duties5,9736,9356,3495,8936,523
Customs duties5,9726,9246,3495,8936,523
Stamp duties111000
Export duties00000
Other tax revenue (stamp duty)1312111312
Nontax revenue3,2942,9662,3183,4354,056
Property income2,2461,8621,6601,7742,861
Bank of Mauritius8258008001,2001,500
Interest and royalties585448351294840
Dividends592543426196457
Operating surpluses19451200
Rent and other5066718599
Other nontax revenue5486046581,0521,172
Fees, charges, and sales385409450594613
Fines and forfeits46657697104
Government pension fund114120123131135
Miscellaneous4108230320
Total revenue21,19423,33922,50724,95429,935
Foreign grants135161199317363
Total revenue and grants21,32923,50022,70725,27030,298
Source: Ministry of Finance.

Fiscal year from July to June.

Source: Ministry of Finance.

Fiscal year from July to June.

Table 23.Mauritius: Functional Classification of Expenditure and Net Lending, Consolidated Central Government, 1998/99-2002/03 1/(In millions of Mauritian rupees)
1998/991999/002000/012001/02

Rev. Est.
2002/03

Prov.
Total expenditure25,55627,64331,42032,92538,553
Public administration and security4,6084,7675,3635,7186,319
General public services2,3842,5242,9172,9313,115
Defense216239253270299
Public order and safety2,0082,0042,1932,5172,905
Social services12,86013,95115,49418,08419,856
Education3,8663,9874,3574,7555,578
Health and sanitation2,1322,2562,5472,8843,151
Social security and welfare5,1405,5636,1606,6986,988
Housing and community amenities 2/1,2981,7042,0233,2553,323
Recreational, cultural, and religious424441408492817
Economic services3,6494,1924,1753,6664,231
Fuel and energy2325234434
Agriculture, forestry, and fishing1,3891,2601,3291,2761,275
Mining, manufacturing, and construction155174198157155
Transport and communications1,0511,1021,8558871,123
Other economic services1,0311,6317701,3021,644
Other purposes4,4394,7336,3885,4568,147
Public debt interest3,6263,8565,5274,5416,390
Transfers to local governments813877861914969
Other0000787
Lending minus repayments 3/-705167-1,574645980
Total expenditure and net lending24,85127,81029,84633,56939,533
Sources: Ministry of Finance; and Central Statistics Office.

Budgetary central government, Government Finance Statistics basis; fiscal year from July to June.

Includes water supply.

From 1996/97 to 1997/98, net lending includes the on-lending of the proceeds from an international floating rate note (FRN) issue of US$150 million. In 1998/99, it includes the repayment of the FRN on-lending equivalent to 0.8 percent of GDP.

Sources: Ministry of Finance; and Central Statistics Office.

Budgetary central government, Government Finance Statistics basis; fiscal year from July to June.

Includes water supply.

From 1996/97 to 1997/98, net lending includes the on-lending of the proceeds from an international floating rate note (FRN) issue of US$150 million. In 1998/99, it includes the repayment of the FRN on-lending equivalent to 0.8 percent of GDP.

Table 24.Mauritius: Transfers and Subsidies by Budgetary Central Government, 1998/99-2002/03 1/(In millions of Mauritian rupees)
1998/991999/002000/012001/02

Rev. Est.
2002/03

Prov.
Subsidies and other current transfers8,5859,40610,34211,55812,614
Local governments741762790851904
Education1,8871,9662,1432,2642,469
Secondary schools1,0041,0471,1161,2021,313
University of Mauritius430194208210230
Education Institute080789196
Gandhi Institute0103110111129
College of the Air047555458
Block grant148137142145162
Examination Syndicate6969747885
Other236290361373396
Public service pensions1,3621,5951,7241,8681,965
National Pension Fund2,9323,1773,5073,7774,178
Rice and wheat flour369443339393429
Domestic crops99536400
Unemployment fund00100
Outdoor relief410000
Development Works Corporation (DWC) 2/9012211514085
Other current transfers1,0631,2871,6602,2652,583
Capital transfers1,0091,3981,7371,4351,907
Local governments1006365
Public financial institutions222191225194192
Nonfinancial public enterprises7771,1991,5011,1301,291
Aviation, PTT, 3/ and sewerage34468785100
Other4335126503755
International organizations2281137
Other7730268
Total subsidies and transfers9,59310,80412,08012,99314,521
Source: Ministry of Finance.

Fiscal year from July to June.

Includes mainly wages and salaries for government employees transferred to the DWC.

PTT is the postal and telecommunications enterprise.

Source: Ministry of Finance.

Fiscal year from July to June.

Includes mainly wages and salaries for government employees transferred to the DWC.

PTT is the postal and telecommunications enterprise.

Table 25.Mauritius: Income and Expenditure of the National Pension Fund, 1998/99-2002/03 1/(In millions of Mauritian rupees)
1998/991999/002000/012001/02

Rev. Est.
2002/03

Prov.
Income5,4576,1176,8876,1408,258
Government grant2,9413,2673,6063,7414,182
Contributions from employers and employees8939841,0049861,122
Investment income1,4051,7182,0711,2532,800
Other income218148206160154
Expenditure3,2713,6624,1074,2364,821
Noncontributory (basic) pensions2,9293,2623,5983,7284,132
Food aid allowance116161210
Contributory and industrial injury pensions242280342382558
Administration and other costs89114151114121
Excess of income over expenditure2,1862,4552,7801,9043,437
Balance in fund at end of year 2/16,44418,89921,67923,58328,473
Source: National Pension Fund.

Fiscal year from July to June.

Change in balance at end of year may differ from excess of income over expenditure owing to valuation adjustments.

Source: National Pension Fund.

Fiscal year from July to June.

Change in balance at end of year may differ from excess of income over expenditure owing to valuation adjustments.

Table 26.Mauritius: State Trading Corporation—Ration Rice and Flour Transactions, 1998/99-2002/03 1/
1998/991999/002000/012001/02

Rev. Est.
2002/03

Prov.
(In millions of Mauritian rupees)
Sales revenue528544534516512
Ration rice187195187166151
Flour341350347350361
Total cost875872875797916
Ration rice340369349266260
Flour535504527531656
Purchasing cost828788804720816
Ration rice310320305221198
Flour519467498499618
Other charges46857277100
Ration rice3048434562
Flour1737283238
Balance (deficit = -)-347-328-341-281-404
Ration rice-152-174-162-100-109
Flour-194-154-180-181-295
Financing347328341281404
Budgetary transfers3473283210404
Other financing 2/00212810
Memorandum items:(In metric tons)
Sales volume
Ration rice40,85443,77842,24237,44534,000
Flour83,02985,27984,67085,39588,000
(In Mauritian rupees per metric ton)
Rice unit values
Fixed price, initial4,4204,4204,4204,4204,420
Fixed price, final4,4204,4204,4204,4204,420
Revenue4,5824,4494,4274,4334,441
Cost8,3148,4208,2507,1047,647
Subsidy3,7323,9703,8232,6713,206
Flour unit values
Fixed price, initial4,1004,1004,1004,1004,100
Fixed price, final4,1004,1004,1004,1004,100
Revenue4,1034,1014,0984,0994,102
Cost6,4465,9096,2196,2187,455
Subsidy2,3421,8082,1212,1203,352
(Annual change in percent)
Sales volume
Ration rice-4.17.2-3.5-11.4-9.2
Flour4.22.7-0.70.93.1
(In percent)
Revenue/total cost ratio60.362.461.064.755.9
Ration rice revenue/cost55.152.853.762.458.1
Flour revenue/cost63.769.465.965.955.0
Source: State Trading Corporation.

Fiscal year from July to June. Ration rice is a variety of rice.

Residual; reflects extrabudgetary financing (overdrafts and acceptances, net of deposits) and timing discrepancies.

Source: State Trading Corporation.

Fiscal year from July to June. Ration rice is a variety of rice.

Residual; reflects extrabudgetary financing (overdrafts and acceptances, net of deposits) and timing discrepancies.

Table 27.Mauritius: Financing of Central Government Deficit, 1998/99-2002/03 1/(In millions of Mauritian rupees)
1998/991999/002000/012001/02

Rev. Est.
2002/03

Prov.
External financing (net)-1,170-509-3,5841,03188
Eurocurrency (net)00000
Other external (net)-1,170-509-3,584-1,03087
Disbursements by purpose4644113481,739924
Nonproject loans0001,149163
Project loans464411348590761
Mixed project and suppliers’ credits053418134
Electric power31346161161
Water and irrigation8074182148120
Other agriculture180000
Roads, highways, and bridges00000
Telecommunications00000
Housing projects690000
Urban development00000
Education9400210
Environment9529567194260
Other projects10525204886
Disbursements by source4644113681,738923
Bilateral lenders18061184278295
Multilateral agencies2843501841,500465
Miscellaneous000-40163
Repayments (-)-1,634-920-3,932-708-836
Eurocurrency00000
Other loans 2/-1,634-920-3,932-708-836
Domestic financing (net)4,0093,8145,6536,3469,299
Banking system-1,5712,579-9581,4022,496
Bank of Mauritius1,893-1,496-651-5,545-7,787
Commercial banks-3,4644,075-3076,94710,283
Nonbank5,5801,2366,6114,9446,803
Short-term instruments6,1451,8737,0974,8495,747
Long-term instruments-565-638-486951,056
Residual 3/6841,0065,071932-151
Total financing3,5224,3107,1398,2999,235
Sources: Ministry of Finance; Bank of Mauritius; and IMF staff estimates.

Fiscal year from July to June.

Includes the partial repayment of US$33 million of the floating rate note in 1998/99.

Reflects differences of coverage and valuation, as well as timing; includes proceeds from the sale of government equity in state-owned enterprises equivalent to 5.7 percent of GDP in 2000/01.

Sources: Ministry of Finance; Bank of Mauritius; and IMF staff estimates.

Fiscal year from July to June.

Includes the partial repayment of US$33 million of the floating rate note in 1998/99.

Reflects differences of coverage and valuation, as well as timing; includes proceeds from the sale of government equity in state-owned enterprises equivalent to 5.7 percent of GDP in 2000/01.

Table 28.Mauritius: Government Domestic Nonbank Debt Outstanding by Holder, 1998/99-2002/03 1/(In millions of Mauritian rupees; end of period)
1998/991999/002000/012001/02

Rev. Est.
2002/03

Prov.
National Pension Fund8,3858,53512,82014,70718,355
Short term4,1664,4186,9378,88512,377
Long term4,2194,1175,8835,8225,978
Post Office Savings Bank1731602364031,253
Short term36241122791,152
Long term137137124124101
State Insurance Corporation of Mauritius (SICOM)1,3552,0813,6204,6206,061
Short term6291,3912,2723,3584,693
Long term7266901,3481,2621,368
Insurance companies9406791,4892,1433,162
Short term6954941,2981,9902,689
Long term245185191153473
Sugar Insurance Fund Board (SIFB) 2/4003858741,2971,117
Short term4003858741,2971,117
Long term00000
National Savings Fund (NSF) 3/9699892,0922,4863,244
Short term8428621,7382,1322,790
Long term127127354354454
Employees’ Welfare Fund (EWF) 3/379372516495579
Short term356349493472579
Long term232323230
Independence and Republic bonds 4/2,3752,079000
Short term00000
Long term2,3752,079000
Consolidated Sinking Fund (CSF) 5/2,0182,074323558964
Short term500700001
Long term1,5181,375323558963
Others4,2944,9016,8507,0535,833
Short term4,2464,8536,8026,9615,725
Long term48484892108
Total21,28722,52329,13434,03641,005
Short term11,87013,74320,84025,64831,560
Long term9,4178,7808,2948,3889,445
Memorandum items:
Changes during year (total)5,5801,2366,6114,9026,967
Short term6,1451,8737,0974,8085,911
Long term-565-638-486941,056
Sources: Ministry of Finance; and IMF staff estimates.

Includes tax treasury bills and tax reserve certificates (short term) and government stocks, treasury certificates, and anonymous bearer bonds (long term). Fiscal year from July to June.

The SIFB collects premiums from planters and insures sugar crops against natural disasters, such as cyclones and drought.

The NSF and the EWF make deductions from salaries and accumulate funds to contribute to government employees.

Only individuals and nonbank institutions, including the African Development Bank and petroleum companies, subscribe to the Independence and Republic bonds.

Fund for payment of government debt.

Sources: Ministry of Finance; and IMF staff estimates.

Includes tax treasury bills and tax reserve certificates (short term) and government stocks, treasury certificates, and anonymous bearer bonds (long term). Fiscal year from July to June.

The SIFB collects premiums from planters and insures sugar crops against natural disasters, such as cyclones and drought.

The NSF and the EWF make deductions from salaries and accumulate funds to contribute to government employees.

Only individuals and nonbank institutions, including the African Development Bank and petroleum companies, subscribe to the Independence and Republic bonds.

Fund for payment of government debt.

Table 29.Mauritius: External Debt of Central Government—Disbursements, 1998/99-2002/03 1/(In millions of Mauritian rupees)
1998/991999/002000/012001/022002/03
All bilateral lenders179.760.6184.3278.0295.4
Governments176.934.546.340.5210.4
People’s Republic of China2.40.00.00.00.0
Flacq Hospital0.00.00.00.00.0
Housing2.40.00.00.00.0
Recreation center0.00.00.00.00.0
France107.018.03.437.857.0
Small-scale irrigation project0.00.00.00.00.0
Goodlands district water supply49.80.00.00.00.0
Hotel catering school0.00.00.00.00.0
Lycée Polytechnique, Rose Hill30.00.00.020.90.0
Northern Plain irrigation project22.215.50.84.25.3
Grand Baei sewerage project5.02.52.612.751.7
India (lines of credit for development projects and supplies)0.05.132.10.0145.9
Japan67.511.410.82.70.0
Telecommunications0.00.00.00.00.0
La Butte drainage and soil consolidation project67.511.410.82.70.0
Other bilateral agencies2.826.1138.0237.585.0
Multilateral agencies284.2349.9161.81,482.3437.9
Arab Bank for Economic Development in Africa66.8177.989.1106.9235.8
Industrial credit0.00.00.039.945.6
Housing rehabilitation66.8133.40.00.00.0
Water works0.044.523.70.01.5
Midlands dam0.00.065.467.057.0
Upgraing of Victoria Hospital0.00.00.00.00.0
132 KV Transmission Line0.00.00.00.0131.7
African Development Bank/Fund0.00.00.00.00.0
Bridge project0.00.00.00.00.0
Rose Belle rehabilitation0.00.00.00.00.0
Third highway project0.00.00.00.00.0
Education project0.00.00.00.00.0
Mauritius and Rodrigues sewerage0.00.00.00.00.0
Support to the National Health Plan0.00.00.00.00.0
European Development Fund8.7118.20.0124.5196.8
Prime Minister’s rock removal scheme0.00.00.00.00.0
Agricultural and industrial credits0.00.00.00.00.0
Water projects8.30.00.00.00.0
Regional meteorological project0.40.50.00.00.0
Baei du Tombeau sewerage project0.0117.70.0124.5196.8
Plaines Wilhems sewerage project0.00.00.00.00.0
International Bank for Reconstruction and Development202.753.872.71,250.95.3
Environmental program5.30.00.00.00.0
Debt and liquidity management improvement project0.00.00.30.50.6
Agricultural management services18.00.00.00.00.0
Sugar (bagasse) energy development project0.00.00.00.00.0
Third education project46.00.00.00.00.0
Vocational training1.40.00.00.00.0
Technology development project23.39.80.00.00.0
Higher- and technical education project16.50.00.00.00.0
Freeport project80.814.419.37.30
Sewerage and sanitation11.429.653.154.14.1
Public Expenditure Reform Plan0.00.00.01,189.00.0
Financial Sector Supervisory Authority0.00.00.00.00.6
Nordic Investment Bank/Development Fund6.00.00.00.00.0
Environmental program6.00.00.00.00.0
Fort George power station0.00.00.00.00.0
Miscellaneous sources (international floating rate note)0.00.02.217.526.7
Total disbursements463.9410.5348.31,777.8760.0
Source: Ministry of Finance.

Fiscal year from July to June.

Source: Ministry of Finance.

Fiscal year from July to June.

Table 30.Mauritius: Consolidated Monetary Survey, June 1999-December 2003
19992000200120022003
JuneJuneDec.JuneDec.JuneDec.JuneDec.
(In millions of Mauritian rupees)
Net foreign assets22,55625,20433,53531,74835,75440,53144,02748,30148,874
Monetary authorities15,78417,95025,34723,07725,76330,46936,17840,31741,626
Commercial banks6,7727,2548,1888,6719,99210,0627,8507,9847,248
Domestic credit77,54188,12885,97292,82198,689100,323105,634107,517117,315
Claims on government (net)15,92418,50313,58617,54419,51518,85820,76421,31226,972
Monetary authorities4,4762,980-1,2252,3291,453-3,227-7,650-11,285-5,182
Commercial banks11,44815,52214,81015,21518,06222,08528,41432,59632,154
Claims on private sector 1/61,61869,62672,38775,27779,17581,46584,87186,20690,343
Broad money (M2)80,17288,91094,87197,720105,241110,440118,357123,365131,223
Money (M1)10,90511,06513,29712,71115,45215,13118,15717,43720,401
Quasi money69,26777,84681,57485,00989,78995,308100,200105,928110,822
Money market instruments000000002,947
Other items (net)19,92524,42124,63626,84929,20230,41431,30532,45332,019
(Annual change in percent)
Domestic credit13.613.74.85.314.88.17.07.211.1
Claims on government (net)-9.016.2-23.3-5.243.67.56.413.029.9
Claims on private sector 1/21.313.012.68.19.48.27.25.86.4
Broad money (M2)13.210.99.29.910.913.012.511.710.9
Money (M1)7.41.510.814.916.219.017.515.212.4
Quasi money14.112.49.09.210.112.111.611.110.6
(Annual change in percent of beginning-of-period broad money)
Net foreign assets1.73.38.67.42.39.07.97.34.6
Domestic credit13.113.24.65.313.47.76.64.711.4
Claims on government (net)-2.23.2-4.8-1.16.21.31.21.86.2
Claims on private sector 1/15.310.09.36.47.26.35.42.95.3
Broad money (M2)13.210.99.29.910.913.012.511.712.2
Velocity (GDP/M2)1.31.31.31.31.31.21.21.21.2
Sources: Bank of Mauritius; and IMF staff estimates.

Including claims on public enterprises.

Sources: Bank of Mauritius; and IMF staff estimates.

Including claims on public enterprises.

Table 31.Mauritius: Summary Accounts of the Bank of Mauritius, June 1999-December 2003(In millions of Mauritian rupees; end of period)
19992000200120022003
JuneJuneDec.JuneDec.JuneDec.JuneDec.
Net foreign assets15,29617,44524,82122,55025,21029,89235,60339,47240,778
Foreign assets15,31417,45524,84022,56125,22029,91735,62139,58340,850
Foreign liabilities-19-11-19-11-10-25-18-111-72
Claims on government (net)4,5763,079-1,1282,4271,548-3,135-7,557-10,931-4,801
Treasury bills1,3201,8521,4411,3509941,1721,225863761
Government securities347469841,1787704794239
Advances3,1621,089671000000
Other 1/134134134134134134134134134
Government deposits-42-43-3,421-42-758-5,211-9,394-11,970-5,734
0000
Claims on commercial banks2506232502536601,8752,1712,1732,157
Reserve money10,3449,76511,76411,34212,99012,92014,92114,77421,909
Currency outside banks4,8765,1726,6485,7357,3296,4678,2867,4889,347
Currency with banks2,0001,5572,5061,7273,0632,0673,1822,1003,715
Bankers’ deposits3,4483,0242,5243,7902,4504,2403,3424,9923,139
Of which: non-interest-bearing deposits000000000
Banks’ holdings of Bank of Mauritius bills000000005,595
Private sector demand deposits21128690148147112194114
Money market instruments000000002,947
Other items (net)9,77711,38212,18013,88814,42815,71115,29615,94013,278
Memorandum items:
Monetary authorities
Reserve position with the Fund488505526527553577575845848
Claims on government (net) 2/4,4762,980-1,2252,3291,453-3,227-7,650-11,285-5,182
Source: Bank of Mauritius.

Use of SDRs (as shown in the accounts of the Bank of Mauritius) and Trust Fund borrowing.

Including transactions with the Fund (based on Fund records).

Source: Bank of Mauritius.

Use of SDRs (as shown in the accounts of the Bank of Mauritius) and Trust Fund borrowing.

Including transactions with the Fund (based on Fund records).

Table 32.Mauritius: Summary Accounts of Commercial Banks, June 1999-December 2003(In millions of Mauritian rupees; end of period)
19992000200120022003
JuneJuneDec.JuneDec.JuneDec.JuneDec.
Net foreign assets6,7727,2548,1888,6719,99210,0627,8507,9847,248
Reserves5,4484,5825,0305,5165,5136,3076,5237,09212,449
Of which: holdings of Bank of Mauritius bills000000000
Claims on government (net)11,44815,52214,81015,21518,06222,08528,41432,59632,154
Government securities3,8833,4223,0342,5032,0371,9462,1831,9652,361
Treasury bills7,95912,70611,96713,06316,12120,56626,46531,20630,000
Loans and advances000000000
State Trading Corporation rice and flour credit8310981290000
Government deposits-477-606-191-449-225-426-234-575-208
Claims on private sector60,10667,27270,57074,01677,89279,97683,97785,08088,424
Sugar industry3,4374,0354,5365,130...............
Export processing zone5,9586,0376,2926,713...............
Other industries7,4337,9028,5778,110...............
Personal, professional, and housing12,95513,41313,99314,527...............
Traders9,8158,9909,2859,778...............
Others20,50826,89427,88829,757...............
Claims on other banklike institutions1,5112,3541,8171,2611,2831,4898941,1261,919
Demand deposits5,2935,8816,5646,8857,9758,5189,7599,75510,941
Time and savings deposits69,26777,84681,57485,00989,78995,308100,200105,928110,822
Credit from the Bank of Mauritius2506232502536601,8752,1712,1732,157
Other items (net)9,76012,63312,02712,53114,31614,21915,52716,02218,275
Source: Bank of Mauritius.
Source: Bank of Mauritius.
Table 33.Consolidated Assets and Liabilities of Category 2 Banks: 1999-2003(In thousands of U.S. dollars; end of period)
19992000200120022003
Assets3,120,8734,024,8003,710,4004,320,5005,802,400
Cash in hand and balance with banks2,127,0732,257,0002,131,8002,040,0002,357,900
Investments in bonds and other securities92,400198,800249,000188,800266,900
Loans and advances to non bank customers879,1001,531,9001,282,7002,054,9002,739,100
Bills purchased and discounted4,4006,5004,6007,8000
Other assets17,90030,60042,30029,000438,500
Liabilities3,121,1004,024,8003,710,4004,320,6005,802,400
Nonbank deposits1,334,3001,693,0001,586,2002,030,5002,347,100
Amounts due to banks1,287,7001,687,7001,681,3001,794,9002,382,700
Other liabilities72,900145,600279,100258,700726,900
Capital and reserves426,200498,500163,800236,500345,700
Source: Bank of Mauritius.
Source: Bank of Mauritius.
Table 34.Mauritius: Principal Interest Rates, 1999-2003(In percent per annum)
June 1999June 2000June 2001June 2002June 2003
Min.Max.Min.Max.Min.Max.Min.Max.Min.Max.
Lending rates
Bank of Mauritius
Bank rate12.5512.669.4110.65...11.14...10.12...8.26
Rediscount facilities..................0.00...0.00...
Lombard rate.........11.50...12.00...11.50...10.25
Commercial banks
Mauritius Sugar Syndicate12.0013.509.5012.5010.0011.5010.0016.00......
Sugar industry10.0018.009.6317.5010.2517.5010.0021.008.7519.75
Other agriculture11.2519.5010.0018.5010.5018.7510.0021.008.7521.00
Export processing zone10.0020.0010.0018.5010.0018.509.0021.007.7521.00
Development certificates11.7517.0010.0017.0010.5017.0010.0014.750.000.00
Small-scale industries12.5020.0010.0020.0010.5020.0010.0021.00
Transport11.0019.5011.0019.5011.0019.5010.0021.008.7521.00
Hotels12.5018.5011.0018.0010.5017.509.2521.008.1421.00
Other industries and manufacturers10.7520.5010.0019.5010.5019.508.5021.007.7521.00
Statutory and parastatal bodies12.5016.5011.2515.5011.5016.5010.7521.009.0021.00
Housing12.0020.5010.0020.5010.5020.5010.0020.758.7519.50
Traders10.0020.5010.0020.5010.0020.5010.0021.508.5021.25
Stockbrokers11.0018.5013.7516.5014.5016.5010.7515.50......
Financial institutions12.0018.5012.0017.0011.0016.5010.0021.008.7521.00
Personal and professional10.0024.0010.0020.5010.5020.5010.0021.508.5021.50
Other customers10.0020.5010.0020.5011.0020.5010.0021.008.7521.00
Deposit rates
Savings9.009.006.508.50...7.006.506.505.256.00
Seven days’ notice8.2510.005.759.257.009.006.5010.005.259.75
Fixed deposits
Up to 3 months9.0011.506.509.877.008.756.509.505.258.25
Exceeding 3 and up to 6 months9.0011.256.509.757.139.306.509.505.508.38
Exceeding 6 and up to 12 months9.0012.006.8810.757.2511.406.5011.505.6310.50
Exceeding 12 and up to 18 months9.5012.007.5010.007.3811.006.5011.505.6310.00
Exceeding 18 and up to 24 months9.3811.507.5010.507.5011.007.0012.005.6311.00
Exceeding 24 and up to 36 months9.6312.008.0011.007.6311.256.7513.005.7513.00
Exceeding 36 and up to 48 months9.6312.008.0011.257.7511.507.2513.505.2513.00
Over 48 months9.7511.258.7510.008.0011.507.2513.256.0013.00
Treasury bill rate 1/
3-month12.778.939.448.987.23
6-month12.9810.259.999.547.86
12-month13.1010.5511.6510.618.75
Source: Bank of Mauritius.

Rates quoted are the monthly weighted-average yields on treasury and/or Bank of Mauritius bills auctioned.

Source: Bank of Mauritius.

Rates quoted are the monthly weighted-average yields on treasury and/or Bank of Mauritius bills auctioned.

Table 35.Mauritius: Balance of Payments, 1998/99-2002/03 1/(In millions of Mauritian rupees)
1998/991999/002000/012001/02

Rev. Est.
2002/03

Prov.
Current account-1,620-1,7534,2577,4583,947
Goods-9,071-12,344-6,977-6,177-8,288
Exports, f.o.b.41,70238,84545,22247,93853,450
Sugar9,2265,4467,5298,9507,828
Export processing zone (EPZ)28,17929,87932,47632,89132,497
Other4,2973,5205,2176,09713,125
Imports, f.o.b-50,773-51,189-52,199-54,115-61,738
Imports, c.i.f-54,076-55,049-56,204-58,151-66,087
Rice and flour-1,106-1,245-1,167-1,339-1,512
Petroleum-2,700-4,528-5,891-5,467-6,166
EPZ-16,175-15,836-16,771-16,756-16,226
Other-34,095-33,440-32,375-34,589-42,183
Of which: aircraft and ships-2,7000-398-1,575-1,073
Services (net)5,7719,0379,15911,90810,040
Transportation-1,006-1,095-1,003-517-1,733
Credit5,0605,3356,4017,2388,915
Debit-6,066-6,430-7,404-7,755-10,648
Travel8,1279,60510,69112,37912,587
Credit12,76414,34415,52719,04517,998
Debit-4,637-4,739-4,836-6,666-5,411
Other services-1,350527-52946-814
Credit6,2117,9479,3609,3967,207
Debit-7,561-7,420-9,889-9,350-8,021
Income-589-895336-248-37
Credit9677762,0181,8081,811
Debit-1,556-1,671-1,682-2,056-1,848
Current transfers (net)2,2692,4491,7391,9752,232
Capital and financial account966-4772,488-3673,155
Capital account-16-12-40-30-57
Financial account307-2,631-2,600-7,728-6,636
Direct investment4663235,4431,4581,651
Abroad-292-300-129-4455
In Mauritius7586235,5721,5021,596
Portfolio investment (net)714-590-3,834-600-614
Other investment-198-198919-1,1952,175
Assets-2,7991,499492-3021,553
Liabilities2,601-1,697427-893622
Long-term liabilities552-1,824492-1,121-2,940
Government (net)-372-510-4581,070-76
Other public sector (net)1,354-1,0811,026-1,554-2,341
Other long-term liabilities-430-233-76-637-523
Short-term liabilities2,049127-652283,562
Reserve assets (increase -)-675-2,166-5,128-7,391-9,848
Net errors and omissions6542,230-6,745-7,091-7,102
Sources: Bank of Mauritius; Ministry of Finance; and IMF staff estimates.

Fiscal year from July to June.

Sources: Bank of Mauritius; Ministry of Finance; and IMF staff estimates.

Fiscal year from July to June.

Table 36.Mauritius: Principal Merchandise Trade, Price Indices, and Terms of Trade, 1999-2003
1999200020012002

Rev. Est.
2003

Prov.
(In millions of Mauritian rupees)
Total exports, f.o.b.39,16039,07245,62251,67952,120
Sugar7,6025,5448,5578,8698,430
Export processing zone (EPZ)29,13130,96133,69532,68332,059
Cut flowers (non-EPZ)1241331398873
Chemicals (non-EPZ)242311289590739
Other6066609967921,147
Reexports /11,4551,4631,9468,6579,672
Total imports, c.i.f.53,92954,92857,83564,60866,389
Food and live animals6,7616,9488,23711,28910,311
Beverages and tobacco527369302491620
Crude materials, except fuels1,6671,6541,7871,8131,542
Mineral fuels, lubricants, etc.4,0466,4506,5046,6347,169
Animal and vegetable oils and fats569455472625638
Chemicals3,8824,2604,7805,0125,779
Manufactured goods17,03617,57017,61618,74418,817
Machinery and transport equipment14,44512,42713,00413,54314,865
Miscellaneous manufactures4,8424,7105,0006,3176,507
Other15485133140141
(Index, 1992=100; in Mauritian rupees)
Price indices
Unit value of exports158157160174184
Unit value of imports156161173182195
Terms of trade10197929694
Memorandum items:(In millions of Mauritian rupees)
Ships’ stores and bunkers
Exports, f.o.b.8651,8101,9372,2142,044
Imports, c.i.f.00000
Source: Central Statistics Office.

As from 2002 Mauritian trade statistics include transactions of the Mauritius Freeport under “Other exports.”

Source: Central Statistics Office.

As from 2002 Mauritian trade statistics include transactions of the Mauritius Freeport under “Other exports.”

Table 37.Mauritius: Pattern of Trade and Direction of Exports of the Export Processing Zone (EPZ), 1999-2003(In millions of Mauritian rupees)
1999200020012002

Rev. Est.
2003

Prov.
Total EPZ exports by commodities, f.o.b.29,13130,96133,69532,68332,059
Clothing23,00324,59025,62625,31524,704
Other textiles1,8291,9142,4731,2251,137
Pearls and precious stones6248228531,0471,121
Watches and clocks585498407333395
Optical goods204178186149120
Toys, games, and sporting goods165179177183178
Jewelry, gold, and silver goods361443578850634
Fish and fish preparations9529451,8002,0182,001
Other1,4081,3921,5951,5631,769
Total EPZ exports by direction of exports, f.o.b.29,13130,96133,69532,68332,059
European Union (EU) countries19,21419,84520,94120,53820,273
Belgium833809643727674
France6,9117,5107,8727,6377,315
Germany1,5671,3391,4631,1321,191
Netherlands886602744752757
Sweden10815517311467
United Kingdom6,2896,6227,1697,6357,957
Other2,6202,8082,8772,5412,312
Non-EU countries9,91711,11612,75412,14511,786
Hong Kong S.A.R.981248510966
United States6,8247,7158,8049,4818,785
Other2,9953,2773,8652,5552,935
Total EPZ imports by commodities, c.i.f.15,73516,39917,14016,90915,559
Materials13,89114,70015,63715,25114,061
Yarn and fabrics8,9319,3139,3198,5367,834
Other4,9605,3876,3186,7156,227
Machinery1,8441,6991,5031,6581,498
Source: Central Statistics Office.
Source: Central Statistics Office.
Table 38.Mauritius: Medium- and Long-Term External Debt, June 1999-December 2003 1/(In millions of Mauritian rupees; end of period)
19992000200120022003
JuneJuneDec.JuneDec.JuneDec.JuneDec
Total30,45428,76727,98928,05628,46629,95427,92728,75326,539
Public sector26,93825,48324,68724,84825,64927,38225,62026,70324,602
Central government10,0379,8916,7956,8166,9988,7858,3389,0748,350
International agencies4,2844,1974,1764,1864,1655,8355,4626,0255,390
IMF credit000000000
Other4,2844,1974,1764,1864,1655,8355,4626,0255,390
Governments2,7012,5412,5382,5472,7502,8712,8012,9772,897
Other lenders3,0523,15381838379757263
Parastatal bodies16,90115,59217,89218,03218,65118,59717,28217,62916,252
International agencies1,9531,8991,9401,9961,9781,6651,5371,5131,413
Governments5,8465,1595,2345,0194,9464,9974,9034,2463,742
Other lenders9,1028,53410,71811,01711,72711,93510,84211,87011,097
Private sector3,5163,2843,3023,2082,8172,5722,3072,0501,937
Source: Ministry of Finance.

Disbursed debt outstanding with a maturity exceeding one year.

Source: Ministry of Finance.

Disbursed debt outstanding with a maturity exceeding one year.

Table 39.Mauritius: External Debt–Service Payments, 1998/99-2002/03 1/
1998/991999/002000/012001/022002/03
(In millions of Mauritian rupees)
Government loans (1)2,1471,3854,3519371,035
Principal1,6349203,932708836
Interest and other charges513465419229199
Parastatal bodies (2)2,3183,5742,6594,9455,453
Principal1,5002,6701,7034,0024,627
Interest and other charges818904956943826
Total public debt (1+2)4,4654,9597,0105,8826,488
Principal3,1343,5905,6354,7105,463
Interest and other charges1,3311,3691,3751,1721,025
Private sector debt (3)5052645051,170709
Principal4692564901,152679
Interest and other charges368151830
Debt service, excluding IMF (1+2+3)4,9705,2237,5157,0527,197
Principal3,6033,8466,1255,8626,142
Interest and other charges1,3671,3771,3901,1901,055
International Monetary Fund (4)00000
Principal00000
Interest and other charges00000
Total debt service (1+2+3+4)4,9705,2237,5157,0527,197
Principal3,6033,8466,1255,8626,142
Interest and other charges1,3671,3771,3901,1901,055
(In percent of exports of goods and services)
Debt-service ratios
Total debt service (including IMF)7.67.99.88.48.2
Principal5.55.88.07.07.0
Interest and other charges2.12.11.81.41.2
(In millions of Mauritian rupees)
Memorandum item:
Exports of goods and services65,73766,47176,51083,61787,547
Sources: Ministry of Finance; and Bank of Mauritius.

Service payments on medium- and long-term external debt; fiscal year from July to June.

Sources: Ministry of Finance; and Bank of Mauritius.

Service payments on medium- and long-term external debt; fiscal year from July to June.

Table 40.Mauritius: Effective Exchange Rate Indices, January 1990-December 2003(1990=100; period averages)
Nominal Effective

Exchange Rate

Index
Real Effective

Exchange Rate

Index
Consumer

Price

Index
Relative

Price

Index
1990100.0100.0100.0100.0
199196.798.7107.0102.0
199294.997.0112.0102.2
199389.697.6123.8109.0
199487.298.6132.8113.1
199583.396.7140.8116.1
199677.393.0150.1120.4
199779.099.2160.3125.5
199872.795.5171.2131.5
199970.397.8183.0139.1
200073.2104.0190.7141.9
200169.3101.6201.0146.5
200266.4101.8214.5153.2
200362.798.2223.6156.6
1998 I0.098.7165.7128.1
1998 II0.095.7169.6130.5
1998 III0.095.8172.6132.3
1998 IV98.492.0177.1135.3
1999 I69.394.9179.4136.9
1999 II71.198.5182.0138.6
1999 III70.799.1184.6140.2
1999 IV70.298.8186.2140.7
2000 I71.6101.2188.1141.2
2000 II73.6104.2189.5141.5
2000 III74.2104.6190.1141.0
2000 IV73.4105.8195.3144.0
2001 I70.0101.1197.3144.4
2001 II71.2103.2198.6145.0
2001 III68.5101.2203.1147.6
2001 IV67.6100.9205.0149.1
2002 I69.1104.4210.3151.1
2002 II66.8101.8212.3152.4
2002 III64.9100.1216.3154.2
2002 IV64.9100.7219.1155.1
2003 I65.4101.3220.6154.8
2003 II64.4100.8222.3156.4
2003 III60.895.7224.8157.4
2003 IV60.295.1226.7158.0
2004 I63.2100.5229.7158.9
2002 January68.9103.5208.7150.2
2002 February69.4104.9210.6151.2
2002 March69.0105.0211.6152.0
2002 April68.4104.3212.0152.4
2002 May66.6101.7212.4152.7
2002 June65.499.4212.4152.1
2002 July64.198.5215.4153.6
2002 August65.3100.7216.4154.3
2002 September65.4101.2217.2154.6
2002 October65.5101.9219.3155.4
2002 November65.0100.9219.1155.1
2002 December64.199.3218.9154.9
2003 January64.099.1220.4154.9
2003 February65.7101.8220.8154.8
2003 March66.5102.9220.6154.7
2003 April67.0104.2221.0155.5
2003 May64.3100.8222.5156.8
2003 June62.197.5223.3157.0
2003 July60.094.5224.6157.4
2003 August61.396.4224.3157.1
2003 September61.096.2225.4157.5
2003 October59.994.4226.2157.6
2003 November60.395.3226.4157.9
2003 December60.395.5227.5158.4
Source: IMF, Information Notice System.
Source: IMF, Information Notice System.
Table 41.Mauritius: Summary of the Tax System as of February 29, 2004(All amounts in Mauritian rupees, unless otherwise indicated)
TaxNature of TaxDeductions and ExemptionsTax Rate
1. Taxes on income and profits

(The Income Tax Act)
Income tax for companies and individuals is payable on income derived during the preceding year. A nonresident is liable only on income derived from Mauritius.Income accruing to charitable institutions, various sugar industry funds, local authorities, trade unions, and benevolent associations is exempted.
1.1 CompaniesCorporate tax is applicable to companies, unit trust schemes, trusts, and nonresident sociétés.



Chargeable income includes distributed dividends that are not subject to income tax in the hands of the recipient.



Nonresident sociétés are liable to income tax as if they were companies.



Resident sociétés are not liable to income tax, but the associates are taxable on their share of income from the société, whether the income is distributed or not.
For companies, capital expenditure for agricultural improvement is deductible in full. Companies are also entitled to generous capital allowances: 5-100 percent annual allowance on straight-line method. In addition, there is an investment allowance of 25 percent on the construction of industrial premises or on the acquisition of new plant and machinery, computer software, or a new bus of seating capacity of not less than 30. Previous year’s losses; expenditure on repair of premises or plant; donations to approved charitable institutions up to a certain maximum; contributions to the National Pension Fund and Employee Share Scheme; and 100 percent investment allow ance on the acquisition of new plant and machinery for investments in Rodrigues are all deductible. Additional investment allowance of 25 percent is granted on capital expenditure incurred by manufacturing companies on the acquisition of state-of-the-art technological equipment and by ICT companies on the acquisition of new plant and machinery or computer software. Unrelieved losses of a manufacturing company taken over by another company may under certain conditions be transferred to the acquirer.Item

General rate Incentive rate Incentives rate under the Investment Promotion Act, Financial Services Development Act as well as authorized mutual fund, investment trust companies, trustees of unit trust and companies engaged in agricultural manufacturing, and tourism sectors, which do not hold an incentive certificate. Incentive companies include companies engaged in the provision of preprimary and primary education as well as those licenced under Section 14 of the Financial Services Development Act 2001 to conduct business activity in the financial services sector, other than insurance business. Unit trusts



A trust (a) of which the settler is a nonresident or holds a category 1 Global Business License (GBL) License or a Category 2 GBL License under the Financial Services Development Act 2001 or another trust that qualifies and of which all beneficiaries appointed under the terms of the terms of trust are qualified. Throughout an income year, non-residents or holds a Category 1 GBL or a Category 2 GBL under the Financial Services Development Act 2001 or which is a purpose trust under the Trust Act 2001 and whose purpose is carried out outside Mauritius. Amendment has been brought in the method of taxation of Freeport companies engaged in different type of activities.
Rate

25 percent

15 percent









































































15 percent











15 percent
The following deductions are also available in respect of:



(a) investment in start-up companies for a period of three years;



(b) expenditure incurred by companies in the setting up of approved social infrastructure for the benefit of the community; and



(c) contributions made by companies toward the provision of national ambulance services. Exemptions are granted for



(a) royalties payable to nonresidents by offshore corporations; and



(b) for dividends from resident companies.



(c) income derived by companies engaged in spinning, subject to certain conditions.



(d) annual allowance of 10 percent is granted on capital allowance incurred on the settling up of golf courses.
Less: Special tax credit up to 60 percent of investment in spinning companies.



Less: investment tax credit at 10 percent of the amount subscribed to share capital of tax incentive or stock exchange companies for three years (maximum credit of 300,000 per annum). The credit is limited to such an extent that the tax payable after the credit should not be less than 15 percent of the chargeable income.
1.2 IndividualsIncome tax is payable on income derived from any source. In general, a resident domiciled in Mauritius is liable on income derived domestically or from abroad except for earned income, where only the amounts remitted to the taxpayer enter the tax base. A taxpayer having a foreign domicile but resident in Mauritius is liable to tax in Mauritius in respect of his foreign income, but will be entitled to credit for foreign tax.PAYE exemption threshold is 7,000, for field workers and for non-agricultural workers in the sugar industry the exemption is 5,700 during intercrop season and 9,100 during crop season.



Exemption of severance allowance and retiring allowance is increased to 1.4M.



Exemption of transport allowance is increased to 6,200. Exempt income includes death gratuities; gains from sale of units or securities quoted on the stock exchange; the first 75,000 of bank interest; dividends paid by resident companies; and income from the first 60 tons of sugar produced (i.e., by small planters).

Deductions from income include interest paid on mortgage or secured loans; previous year’s losses; pension contributions; life insurance premiums; premiums on personal pension schemes; and investment relief, which is a deduction of 40 percent (maximum 75,000) of the amount subscribed to share capital of tax incentive or stock exchange companies.
Chargeable income

First 25,000

Remainder

percent
Rate

15 percent

25
Personal and family deductions are the following:

for personal, 75,000; for dependent spouse, 60,000; and for children (maximum of three)

(a) 25,000 per child under 18,

(b) 30,000 per child attending vocational training (local),

(c) maximum 8,000 per dependent child for education,

(d) 50,000 per child at university (local), and extended to a child receiving full time post-secondary instructions of at least two years duration at the Industrial and Vocational Training Board or at a registered training institution.

(e) 100,000 per child at university (abroad), plus

(f) an additional 50,000 per dependent handicapped child.

Additional deductions include: 50 percent of net medical expenses; premiums on life insurance up to 80,000; premiums on personal pension schemes; on retirement annuity and contribution to medical schemes up to 20 percent of net income; interest relief on secured loans for purchase of land for construction or improvement
2. Taxes on property

2.1 Registration duty
The duty is levied upon registration or transfer of immovable property based on value of property transferred.of residence or to finance tertiary ax incentive companies or companies listed on the stock exchange up to 50,000; and donations to charitable institutions up to 20,000.Where value of immovable property transferred does not exceed 100,000, 10 percent plus 10 percent surcharge on value of immovable property transferred is charged.



Where value of immovable property transferred exceeds 100,000, 12 percent plus 10 percent surcharge on value of immovable property transferred is charged.
Under the Sugar Industry Efficiency Act 2001:



on certain conditions:

(a) where land under cane cultivation is transferred, registration duty at

2 percent and no surcharge is payable

(b) where land is transferred by a planter to a metayer, registration duty at 2 percent and no surcharge is payable.

(c) Where land is tranferred to: (i) the Sugar Investment Trust or a body controlled by it; (ii) by the Sugar Investment Trust or a body controlled by it to shareholder of The Trust or a body controlled by it or a cooperative credit society registred under the Cooperative Societies Act. Registration duty at 2 percent and no surcharge is payable.

(d) Where land is transferred: (i) an occupier of a former sugar estate company owned by a planter of a miller; (ii) an employee who has voluntarily terminated his contract of employment in the context of a factory closure taking place after July 1, 1997, pursuant to Section 24 of the Cane Planters and Millers Arbitration and Control Board Act, or the VRS, pursuant to Section 23 of the Act. Total exemption of registration duty.
Any transaction in respect of any sale converstion or acquisition of land pursuant to the Act by a Specified Entity – total exemption of registration duty.
A deed containing the creation of a mortage. An instrument containing creation of a fixed or floating charge or a pledge in accordance with Article 2112 to 2119 of the Code Napoleon.



Document witnessing the creation of fixed and floating charges by a company specified in the Eighth Schedule of The Registration Duty Act or a company registered with the Small and Medium Industries Development Organization. Recording of the renewal of a sûreté fixe ou flottante under Articles 2202-10 and 2203-6 of the Code Napoléon. Recording of Memorandum of Inventory under Article 2202-49 of the Code Napoleon. Registration of a notice under Article 2202-44 of the Code Napoléon. Registration of a document witnessing the creation of a gage sans déplacement in accordance with Article 2112 of the Code Civil Mauricien by a company specified in the Eighth Schedule.
2.475 percent on the amount of loan
Rs 300
RS 300
Rs 50
Rs 300
Rs 300
Registration of a document witnessing the creation of fixed and floating charges by a noncitizen on his assets, property and accounts sited in Mauritius in favor of another noncitizen, a company holding a Category 1 GBL, a company holding a Category 2 GBL or a bank holding a Category 2 Banking Licence.Rs 1,000
Under Act 19-of 1986

On certain conditions specified under the Act:

(a) a deed of transfer, for the construction of a residential building, of a a lot excised from a larger portion of land, or a portion of land on which exists a house, by a partnership or a company registered with the Sugar Insurance Fund to a worker is exempt from registration duty.



Under Act 25 of 1993 as amended by Act 18 of 1999, certain conditions are specified:



(a) where bare land in a residential area is acquired for the construction of a building by an individual not already owner of a residential property, registration duty is reduced by 100,000;
(b) where a right to construct a building on top on an existing building (droit de surélévation) together with a fraction of the ownership of the ground, is acquired by an individual not already owner of residential property, registration duty is reduced by 100,000;



(c) where a residential lot in a building that has been subject to a duly registered and transcribed deed witnessing a réglement de copropriété in accordance with Article 664 and 664–1 to 664–94 of the Code Napoléon is acquired by an individual not already owner of a residential building, registration duty is reduced by 110,000; and



(d) where a portion of land, whether freehold or leasehold with a residential building thereon, is acquired by an individual not already owner of a residential building, registration duty is reduced by 110,000.
Under Act 25 of 1994, where immovable property is transferred to a company holding a housing development certificate, duty is reduced by 75 percent. Registration of a deed witnessing the purchase of an immovable property from a company holding an investment certificate in respect of a project under the Integrated Resort Scheme prescribed under the Investment Promotion Act:
(a) in the case of a noncitizenU.S. $ 70,000
(b) in the case of a citizen or company incorporated under Companies Act of 2001.Equivalent U.S. $70,000
Where property is transferred without consideration between parties other than ascendants and descendants.Property valueRate
Not exceeding 15,00010 percent
Exceeding
15,000 but not exceeding 20,00012.5 percent
20,000 but not exceeding 50,00015 percent
50,000 but not exceeding 150,00018 percent
150,000 but not exceeding 250,00021 percent
250,000 but not exceeding 500,00024 percent
500,000 but not exceeding 700,00027 percent
700,000 but not exceeding 1,000,00030 percent
1,000,000 but not exceeding 2,000,00035 percent
2,000,000 but not exceeding 5,000,00040 percent
5,000,000 Plus surcharge on value of immovable property transferred45 percent 10 percent
No duty is applied where a property is transferred



(a) by an ascendant to a descendant or the latter’s spouse or surviving spouse;



(b) between the heirs of a deceased person when that property was acquired by inheritance from that person;



(c) between spouses;



(d) to a charitable trust under the Trust Act 2001;



(e) to a religious body under the Registration Duty Act; and



(f) by the Sugar Industry Labor Welfare Fund to a worker who is duly certified as such in the deed of transfer.



Under Act 19 of 1986: on certain conditions specified in the Act, transfer of a lot excised from a larger portion of land by a partnership or company registered with the Sugar Insurance Fund to a worker, total exemption of registration duty.
2.2 Land transfer taxThis tax is payable on the transfer of inmovable property based on the value of the property transferred.Where the last transfer was affected prior to July 16, 1984, the value of 75,000 is exempted.On value of immovable property

If held five years or more

If held less than five years
Rate

5 percent

10 percent
Under the Sugar Industry Efficiency Act of 2001 total exemption of land transfer tax is granted, on certain conditions:



(a) where land under cane cultivation is transferred;



(b) where land is transferred by a planter to a metayer;



(c) where land is transferred to the Sugar Investment Trust or a body controlled by it; or by the Sugar Investment Trust or a body controlled by it to a shareholder of the trust or a body controlled by it or a cooperative credit society registered under the Cooperative Societies Act;
Where transfer is made after a period exceeding 5 years of date of acquisition.

5 percent of value of immovable property;

Where tranfer is made after a period not exceeding 5 years of date of acquisition.

10 percent of value of immovable property.
(d) where land is transferred to an occupier of a former sugar estate company owned by a planter or a miller; or an employee who has voluntarily terminated his contract of employment in the context of a factory closure taking place after July 1, 1997, pursuant to section 24 of the Cane Planters and Millers Arbitration and Control Board Act, or the Voluntary Retirement Scheme pursuant to Section 23 of the Act; and



(e) where land is converted by sale or otherwise acquired pursuant to the Act by a Specified Entity, total exemption of land transfer tax.



Under Act 19 of 1986, on certain conditions specified under the Act, transfer of a lot excised from a larger portion of land by a partnership or company registered with the Sugar Insurance Fund to a worker is totally exempt from land transfer tax.



Total exemption of land transfer tax is also granted where property is transferred.



(a) by an ascendant to a descendant or the latter’s spouse or surviving spouse;



(b) to a charitable trust under the Trust Act of 2001;
(c) to a religious body under the Registration Duty Act;



(d) by the Sugar Industry Labor Welfare Fund to a worker who is duly certified as such in the deed of transfer;



(e) by a company holding a housing development certificate;



(f) between spouses;



(g) in respect of a right to construct a building on top of an existing building (droit de surélévation), together with a fraction of the ownership of the ground, and where certain conditions under Section 45 A (2) are fulfilled; and



(h) by a transferor who has acquired the property to be transferred through inheritance from his spouse, an ascendant, a descendant, a brother, or a sister.
2.3 Morcellement feeThis fee is levied on any lot of land parceled out.Exemptions include land under sugar cane cultivation (up to 25 acres).For residential, commercial, or industrial purposes

Per sq. meter
6.00
For agricultural purposes

Per sq. meter
2.50
2.4 Land conversion taxA tax is levied on conversion of agricultural land to other uses.Exemptions are granted for approved housing schemes, agroindustry, and community benefit. A housing development company pays half the rate.Depending on area converted and category of conversion Per hectare0–3.5 million
2.5 Campement site taxThis tax is levied on campement sites.Under the Campement Site Tax (Exemption) Regulations of 1985, certain conditions are specified:



(a) exemption is granted from payment of tax where the site is occupied as a sole residence or used exclusively for agricultural or grazing purposes; and



(b) part of campement site site is exempted from tax where the site is crossed by a public road.
Annual tax according to zone Per sq. meter2.00–6.00
2.6 Campement taxThis tax is levied on campements.Exemption is granted to an owner who uses the campement as his sole residence and the market value of which is less than 5,000,000on value of campement (including value of campement site)0.5 percent less campement site tax and general rate under Local Government Act.
2.7 Capital gains (morcellement) taxThis tax is imposed on the transfer of any lot in land parceled out.The following are exempted:



(a) immovable property within



500 meters from the high-water mark of the seacoast up to 1,000 sq. meters;



(b) immovable property within the limits of a town, up to 2,000 sq. meters; and



(c) other immovable property, up to 4,000 sq. meters.
Surcharge

Between the selling price and the purchase price
Rate

20-30 percent plus 20 percent surcharge
Under the Sugar Industry Efficiency Act 2001 total exemption of capital gain tax On certain conditions:



(a) where land under cane cultivation is transferred;



(b) where land is transferred by a planter to a metayer;



(c) where land is transferred to the Sugar Investment Trust or a body controlled by it, by the Sugar Investment Trust or a body controlled by it to a shareholder of the Sugar Investment Trust or a body controlled by it or a cooperative credit society registered under the Cooperative Societies Act;



(d) where land is transferred to an occupier of a former sugar estate company owned by a planter or a miller; or an employee who has voluntarily terminated his contract of employment in the context of a factory closure taking place after July 1, 1997, pursuant to Section 24 of the Cane Planters and Millers Arbitration and Control Board Act or the Voluntary Retirement Scheme pursuant to Section 23 of the Act; and
(e) where land is converted by sale or otherwise acquired pursuant to the Act by a Specified Entity, total exemption of capital gains Tax.



Under Act 19 of 1986, on certain conditions specified in the Act, the transfer of a lot excised from a larger portion of land by a partnership or company registered with the Sugar Insurance Fund Board to a worker is totally exempt from the capital gains tax.



Total exemption from capital gains tax is also granted where property is transferred



(a) by an ascendant to a descendant or the latter’s spouse or surviving spouse;



(b) by the Sugar Industry Labor Welfare Fund to a worker who is duly certified as such in the deed of transfer; and



(c) by a transferor who has acquired the property to be transferred through inheritance from his spouse, an ascendant, a descendant, a brother, or a sister.
2.7 Taxes on transfer of leasehold rights in state landThis tax is levied on the transfer of lease contracts for state land from one lessee to another.Under Act 9 of 1997 (Tax on Transfer of Leasehold Rights in State Land), no tax is applied where a property is transferredGeneral rate on the value of the leasehold rights being transferred.20 percent
(a) by an ascendant to a descendant or the latter’s spouse or surviving spouse;



(b) between the heirs of a deceased person, when that property was acquired by inheritance from that person;



(c) to a charitable trust under the Trusts Act 1989; or



(d) to a religious body under the Registration Duty Act.
3. Taxes on domestic goods and services
3.1 Value-added tax (VAT)VAT was introduced in Mauritius as from September 7, 1998 in replacement of the sales tax on goods. A broadly based ad valorem tax is chargeable on the supply of goods and services in Mauritius, including the island of Rodrigues, and on the importation of goods and services into Mauritius. Exports are zero rated.VAT borne on inputs is generally allowed to be set off against VAT on outputs, but there are some exceptions, like tax on motor cars, gas oil and fuel oil, and entertainment expenses. No input tax is allowed as credit in respect of goods or services used to make an exempt supply. Goods and services exempted from VAT include basic foodstuffs, unprocessed agricultural products, milk, journals and periodicals, medicines, medical and dental services, fishing vessels and aircrafts, fertilizers, animal feed, transport of passengers and goods by sea or air, educational and training services, the sale of land, and the sale or transfer of buildings for residential purposes, financial services except (a) services provided to merchants accepting a credit card or debit card as payment for the supply of goods or services (merchant discount), (b) services in respect of safe deposit lockers, issue and renewal of credit cards and debit cards; and (c) services for keeping and maintaining customers’ accounts (other than transactions involving the primary dealer system) - these banking services were subject to VAT as from January 1, 2003.Single rate of 15 percent.
Persons in business whose annual turnover of taxable goods and services elow MUR 3 million. As from October 1, 2002, the MUR 3 million registration to the Commisioner of VAT in case the annual turnover is exceed MUR 3 million are required to register for VAT. A person or business may also apply for bthreshold would not apply to any person engaged in profession/business such as: Accountant and/or auditor, advertising agent, adviser, architect and or draughtsman, attorney and/or solicitor, barrister, clearing and forwarding agent, consultant, customs house broker, engineer, estate agent, land surveyor, marine surveyor, motor surveyor, notary, optician, project manager, property valuer, quality surveyor, sworn auctioneer, tour operator, and travel agent. A person dealing exclusively in zero-rated supplies may choose not to register even if his turnover exceeds MUR 3 million. Input VAT allowable is apportioned between taxable and exempt supplies. Since October 2000, electricity and water for household, and for agricultural irrigation are zero rated.
3.2 Excise taxesItemRate
3.2.1 Tobacco & cigarettesCigarettes are taxed ad valorem.Cigarettes

Locally manufactured





Imported
210 percent plus 210 per 1,000 cigarettes

360 percent plus 360 per 1,000 cigarettes
3.2.2 Alcohol and alcoholic beveragesLocally produced alcohol and alcoholic beverages are taxed at different rates, both on a volume basis and ad valorem. Coverage includes products blended and bottled from imported stock.Liquor (final product) imported in bottles is not excisable. Vinegar, nonbrewed condiments, alcohol for heating, and power alcohol are duty free.
Item

Alcohol compounded, spirits, and

rum

Per volume percentage per liter

Wine and country liquor, whichever is higher

Per liter

Ad valorem

Other liquors admixed Spirits, gin, etc.

Per liter

Aperitif, liquor per liter

Spirits (whiskies) per liter Beer and stout per liter

Shandy per liter

Alcohol for perfumes and cosmetics per liter
Rate









1.22







4.40

30 percent





120.00

30.00

200.00



12.10

2.40

5.50
3.2.3 AutomobilesThis tax is chargeable on any car manufactured locally, depending on engine capacity.17-157 percent
3.3 Taxes on betting and gamblingBetting in casinos and gambling houses and on horse races, association football matches, and winnings from betting and sweepstakes is taxed.ItemRate
Casinos and gambling houses, gross takings



Horse racing sweepstakes
Up to 50 percent
Amount collected15 percent
Amount payable as winnings2 percent
BookmakerFixed duty of
Per race meeting9,000–18,000
Amount payable on winnings12 percent
Amount payable on winnings2 percent
Totalizator

Amount collected on win and
14 percent
place bets
Amount collected on other bets16 percent
Pool betting

Pool promoter
Stake money collected15 percent
Amount payable as winnings2 percent
Agent of foreign pool promoter

Amount of stake money
15 percent
3.4 Incorporation feeIncludes search duty for every file; incorporation of private and public companies; registration of Commercial Partnerships; issue of certificates by the Registrar, certifying any copy or extract of any document; photocopy of documents pertaining to:



Incorporation Fees



(a) small private company at time of corporation;



(b) company holding a Category 2 Global Business license at time of corporation;



(c) foreign company at time of registration;



(d) dormant company;



(e) public company at time of incorporation;



(f) any other company at time of incorporation; and



Other fees



(g) commercial partnerships at time of registration.



Annual registration fees for:



(a) small private company;



(b) company holding a Category 2 Global Business licence;



(c) foreign company;
Within due dateAfter due date
2,0003,000
US$65US$100
9,00013,000
2,0003,000
9,00013,000
2,0009,000
6,0009,000
3.5 Company and Annual Registration FeesWith due date



2,000
After due date

3,000
US$65US$100
9,00013,000
(d) dormant company;2,0003,000
(e) public company;9,00013,000
(f) any other company;2,0009,000
(g) commercial partnerships.6,0009,000
Gaming houseAnnual fee
For casino license500,000
For license A400,000
For license B100,000
For license C10,000
Per coin-operated gaming machine20,000
Totalizator (annual)2,000
Pari-mutuel organizer (half yearly)1,000
Local pool promoter (anmud)3,630
Agent for foreign pool pror (annual)noter3,630
Collector (annual)151
3.6 Motor vehicle taxesMotor vehicles are subject to annual road license fees, and special trading license fees are applied to contract cars and buses.Motor vehicles used within the owner’s premises and by embassies are exempt.ItemRate
Private automobiles3,500–8,000
Local authorities, parastatal bodies, and other institutions, by virtue of the Act constituting them, are exempted.Taxis1,800–4,000
Contract cars4,500–10,000
Contract buses3,000–5,000
Lorries1,800–13,200
Motorcycles600–1000
Autocycles1,000
Any motor car belonging tc person on a temporary visit of not less than one week (per month)500
4. Taxes on international trade

4.1 Taxes on imports

4.1.1 Customs tariff










Mauritius maintains a one-column tariff schedule based on the Harmonized System (HS) Nomenclature. Since July 1994, import customs duties, which account for the bulk of customs duty revenue, vary by HS classification. An additional 10 percent of import duties are reliable on all imports from nonpreferential countries and which attract import customs duties at the rate of 55 percent or over, i.e., generally other than from the Commonwealth, the European Union, and the United States. Import customs duties are in general ad valorem on c.i.f. values. Goods originating from the following COMESA member states and covered by a proper certificate of origin are allowed duty free: Djibouti, Egypt, Kenya, Madagascar, Malawi, Sudan, Zambia and Zimbabwe. However, goods originating from the other COMESA member states attract duty at the rate of 10 percent of the national tariff schedule, wherever applicable. Goods originating in Madagascar are allowed 100% remission of import duties under the Protocole sur les

régles d’Origine des Produits Echangés Entre les Etats Membres de la Commission de I’Ocean Indien.










Exemptions include most food items, agricultural capital goods and specialized spare parts, fertilizers, sporting goods, machinery for the textile, leather, furniture, jewelry, and printing industries; most primary and crude products used as raw materials (such as sheets, sections, and profiles of plastics, rubber, or metal) essential oils, plywood and particle boards; medical and laboratory equipment; energy-saving equipment, protective masks, burglar alarm and surveillance systems, fire fighting equipment, lifts and escalators, vending machines, generators, electric drills, automatic data processing machines and their peripheral units, etc. Imports by factories operating under the EPZ, ESZ, or Industrial Expansion Acts are exempt. For non-EPZ firms, duty drawbacks are permitted on raw materials and intermediate goods used to produce goods for export.










Import customs duties consist of nine tax rates: 0, 5, 10, 15, 20, 30, 40, 55, and 80 percent, respectively.
4.1.2 Import excise dutyExcise is levied on alcoholic beverages, spirits, tobacco products, petroleum products, motor cars, and furniture, and payable on customs clearance.Exemptions are granted for returning residents and manufacturers of motor cars; exemptions or concessions are also granted for taxis, tour operators, and civil servants, as well as vegetable growers and religious bodies.On c.i.f. value15-400 percent
5. Other taxes
5.1 Stamp dutyDocuments presented for registration with the Registrar-General or deposited with the Conservator of Mortgages for transcription, inscription, or erasure of inscription are taxed.15 per sheet.
6. Environment protection feeTax is levied on the monthly turnover of hotels and boarding houses. Tax is also levied on monthly turnover of enterprises engaged in stone crushing and in the manufacture or processing of aggregates, concrete, blocks, precast units, coral sand, rocksand, and basalt sand.On monthly turnover0.75 percent
Source: Ministry of Finance.
Source: Ministry of Finance.

Prepared by Jung Yeon Kim and James Y. Yao.

In addition, there are three local operations of large international banks (HSBC, Barclays Bank and Bank of Baroda) holding 20 percent, and 5 small banks that hold 10 percent of total assets.

The number of institutions doubled from 7 to 14 from 1997 to 2002, and assets rose from about US$910 million to US$4.14 billion during the same period The offshore financial sector has developed in Mauritius largely due to the low tax environment, modern business-friendly legislation for global business, and policies favoring open trade, capital flows, and exchange convertibility.

The Category 1 banks represent domestic banks and Category 2 banks represent the offshore banks in Mauritius.

A system of primary dealers (PD) was introduced in 2002. Four banks—SBM, MCB, HSBC, and Barclays—are the primary dealers.

The Development Loan Stock with maturities up to 15 years is issued annually, while the five-year bond is issued quarterly.

Firm size is defined as follows: Small firms as less than MUR 10 million turnover; Medium firms as greater than MUR 10 million and less than MUR 80 million turnover; and Large firms as greater than MUR 80 million turnover.

The basic law governing business activity in Mauritius is the Companies Act of 2001. This is heavily based on the New Zealand Companies Act of 1993, but tailored to suit the legal and commercial context of Mauritius.

Although an empirical study by Jiang et al (2001) indicate that bond issuance and bank lending are usually positively correlated, in both OECD and emerging economies, this positive relationship may take place at the early stage of the corporate bond market development with heavy bank involvement.

It should be noted that opening the market to foreigners may entail foreign exchange rate risk. In the case of Singapore, the government required foreign issuers to convert or swap their Singapore dollar proceeds into a foreign currency before remitting abroad in order to limit Singapore dollars held outside of the country and preventing the possibility of its currency being used to attack the exchange rate. To compensate investors, the Singaporean authorities have opened the door for currency swaps, resulting in a “synthetic” foreign currency loan for foreign issuers.

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