SPEECH of Alexia Schmiliver, Head of Trade Section – European Networking Event & launching of the Investment Guide
Dr the Honourable Renganaden Padayachy, Minister of Finance, Economic Planning and Development
Mr Ken Poonosamy, CEO of EDB,
Business Operators from both Mauritius and Europe,
Distinguished Guests,
Ladies and Gentlemen,
Good afternoon,
It is an honour for me to be here this afternoon for the European Networking event and launching of the Investment Guide, the EU being the first source of Foreign Direct Investment flows in Mauritius.
At the outset, I would like to inform you that my ambassador, Mr Vincent Degert, is currently in Rodrigues, therefore I have been entrusted to represent the EU Delegation.
As you are aware, we celebrated the Europe Day on 9 May and the collaboration between Mauritius and the European Union has been ongoing for more than 50 years. During those years, the European Union and the Republic of Mauritius have built a solid commercial partnership around common values, starting from the Multifibre Agreement and the Sugar Protocol to cover a wide range of areas today such as:
- trade and investment,
- the fight against climate change,
- sustainable agriculture,
- sustainable tourism,
- the blue economy,
- the health sector,
- the fight against cybercrime,
- as well as governance and human rights.
These supports have played a key role in the economic development of the country and the EU is present alongside Mauritius as the island addresses global challenges. The EU is keen to assist Mauritius in its regional integration strategy as well.
The European Union is the first trading partner of Mauritius as well as its first investor. This does not happen by chance. Mauritius is recognized as a premium investment destination, not only for doing business in the country but also as a regional investment platform to service Africa and Asia.
Please allow me to seize this opportunity to congratulate the Government of Mauritius for the impressive progress made in recent years on further improving the ease of doing business in and through Mauritius.
The European Union attaches great importance to its partnership with the Republic of Mauritius and has supported Mauritius in achieving the goals set under the Government Programme for an inclusive, high income and green Mauritius.
The EU provided technical assistance of EUR 10 million under the dedicated envelope to support the implementation of the interim Economic Partnership Agreement, in place since 2012. Under the project, a series of administrative reforms, undertaken by Ministries and Public Sector Agencies, were subject to a business process re-engineering exercise. Legislative amendments were also adopted under the Business Facilitation Act.
Another component of the project was the development and operationalisation of the National E- Licencing System – the NELS.
Applying for licenses can be seen as a daunting task for businesses. Liaising with multiple agencies poses considerable administrative burdens not only for businesses but also to the public agency whose decision is dependent on the views of another agency. There are also inconsistencies in the interpretation and implementation of regulations related to licensing which adds time and cost to the licensing process.
Through the NELS, Mauritius is able to process business permits applications through a single point of entry in a more effective and efficient manner.
NELS is expected to help reduce the hurdles of starting a business, to improve predictability and to reduce uncertainty in the investment decision-making process. NELS will not only reduce the time and cost to the private sector but will improve transparency and decrease possibilities for red-tape and corruption. According to feedback received from the business operators, the NELS is working well.
Decreasing administrative burdens for businesses and removing barriers to investment are key determinants to unleashing economic growth potential as they offer the opportunity to achieve an overall more efficient allocation of resources and reduced business transaction costs.
As Mauritius has the right aspiration to be among the best performers and the model for the region and beyond, reducing the barriers for investments will have to include reforms in a number of areas as it is opportune to highlight the important role played by investment and trade in shaping the economic growth and social development of the country.
First, I would like to encourage the reform process under way to streamlining the business licensing process that requires improved interaction among public sector agencies and administrative readiness of regulators.
The EU would like to encourage other business licences to be on-boarded on NELS and to ultimately reach a virtual one-stop shop. Easy access to up to date information is crucial in building trust in the investment regime of a country.
Second: Given the challenges to implement reforms, the EPA programme includes a strong component of technical assistance to improve the Business Regulatory reform programme in the following key sectors:
- Land Use and Construction
- Tourism
- Trade and Logistics and
- Healthcare and Life Sciences.
Let me commend the decision of the Inter-Ministerial Committee that met on 14 March to approve to a large extent the recommendations of the experts on undertaking regulatory reforms in the four key sectors.
The focus should now be on implementation of those recommendations.
However, quite a few challenges still remain and in particular:
- on the need to avoid overlapping legislations that impact negatively on business development and sustainable development,
- the reform of the mechanism and framework for regulations and
- the need to set up new regulatory framework in emerging sectors such as life sciences amongst others.
Third: EU support has enabled promulgation of the Intellectual Property Act in 2022. And is ongoing to include the operationalisation of the Geographical Indications framework with technical support to Mauritius IP Office and private sector associations with potential GI products. I cannot wait to see the first Mauritian GI !
But it is also important to bear in mind the need to improve the enforcement of the Intellectual Property framework to avoid trading of illegal goods, and facilitate investment through the effective protection of intellectual property!
Fourth and finally, there is little point in reforming business licenses if positive results are eroded by creeping re-regulation and the re-emergence of inappropriate licenses and regulatory practices.
It is therefore important to assess the economic effects of specific changes in legislation or public policy.
For this reason, the project delivered recommendations for undertaking Regulatory Impact Assessments based on the expert services of the OECD as an immediate and integral part of the licensing reform process to improve policy formulation. We would like to reiterate the need to implement the OECD recommendations on RIA for business development as it is a key tool for policy makers to decide on how to regulate to achieve broader public policy goals.
From my interactions with the business community, people increasingly expect the delivery of government programmes and services to be simple, seamless and connected. And there is growing interest from all stakeholders on the interlinkages between investment and sustainable development and a transparent and inclusive business climate.
Most of you already know that we are currently busy with the deepening of the Economic Partnership Agreement and one of its cornerstone for Mauritius will be the inclusion of trade in services, investment liberalisation and digital trade. Ambitious commitments in the investment liberalisation chapter will doubtlessly increase the attractiveness of Mauritius in the eyes of the EU investors. Those present today will have an edge compared to investors starting their benchmark only after the deepened EPA is promulgated, so I would like to congratulate those bold EU investors present today!
The future agreement will be the EU’s first modern and comprehensive modern free trade agreement (FTA) with the Sub-Saharan Africa, and this will attract a lot of attention!
The comprehensive EPA, under the economic development cooperation chapter, has included technical assistance to further facilitate trade and investment. The support of the EU is here to make a difference. And the EU looks forward to continue the fruitful collaboration with Mauritius in developing a transparent investment regulatory framework to attract and enhance investments and private sector development.
Thank you for your kind attention.