Ahead of the UK-Africa Investment Summit on 20 January and as the UK seeks to boost economic links with Africa after Brexit, Directors John Félicité and Raju Jaddoo take a timely look at the role of Mauritius alongside other established financial centres such as Jersey and London in facilitating investments into Africa.
Positioned for cross-border finance and investment
Mauritius is an active member of the Commonwealth and is a founding member of the African Union. Furthermore, it's a signatory to the South African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the African Continental Free Trade Area (AfCFTA). It also boasts a growing number of double taxation avoidance agreements and investment promotion and protection agreements with mainland counterparts. Importantly, despite being a distance of over 2,500 kilometres from the east coast of the continent, Mauritius is regarded as a competitive, efficient and well-regulated financial centre for investment into the emerging markets of mainland Africa (and beyond).
As of June 2018, the total value of investments structured through Mauritius into Africa stood at USD 36.4 billion1, with South Africa, Nigeria, Democratic Republic of Congo, Mozambique and Kenya among the continent's top five recipients. These figures include flows invested through private equity and impact funds with the participation of several development finance institutions as investors.
Mauritius is not used exclusively for inbound investments to Africa however. Many African investors view Mauritius alongside Jersey, Dubai and London as one of their financial centres of choice when it comes to structuring their cross-border investments on the continent or when investing overseas.
A strong case as an Africa-focused financial centre
In addition to a long history of working with the continent, Mauritius offers stability, security and reliability, firmly grounded in good governance and rule of law within an open and liberal economy. Additionally, the country's bilingual labour force provides an efficient, competitive and comprehensive service for the administration of a full range of investment vehicles and funds.
As a reputable financial centre, Mauritius is served by a well-developed banking system, underpinned by the absence of exchange control and the unrestricted movement of capital. Several international banks have a presence locally, whilst many local banks operate subsidiaries on mainland Africa too.
Africa's appeal here to stay
The AfCFTA could herald new impetus to Africa's economic growth. With a target market exceeding 1.5 billion people and an estimated USD 4 trillion in investment and consumer spending, it will provide a platform for intra-African as well as cross-border trade and investment. Furthermore, it is hoped that many countries will intensify their efforts as traditional or new investors on the continent. As an investment facilitator, Mauritius can play an important part in helping the UK achieve its ambition of being the largest G7 investor in Africa by 2022.
How we can help?
For over two decades, we have been helping companies and funds structure and administer their investments across Africa. We have also assisted African investors to expand their business across the continent and venture into new markets overseas. With local offices in Africa and a presence in London, Jersey, Dubai and Mauritius suitable for structuring inbound and outbound African investments, we bring our expertise to bear on your investment decisions, mitigating risks and helping you maximise your investment value.
1 Source: Financial Services Commission of Mauritius
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