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Country profile - Mauritius

Mauritius is a small, but densely populated island situated in the Indian Ocean, about 500 miles (800km) east of Madagascar. The island consists of a series of volcanic hills rising to a height of between 2000 and 2600 ft (600 - 800m) with a fringing coastal plain. The country has a tropical maritime climate generally dominated by the south-east trade winds and enjoys a warm moist summer during the months of December to May and a cool dry winter from June to November. During the wettest months tropical cyclones occasionally strike the island or pass near enough to give very heavy rainfall and violent damaging winds.

On the discovery of the island in 1598, the land was covered with dense vegetation with a variety of trees. These began to decline under the three successive colonisations by the Dutch (1638-1710), French (1715-1810) and the British (1810-1968). Large areas of forest were cleared to make room for agriculture when the Dutch Governor, Van der Stel, introduced various seeds and fruits to the island. Thus, vegetables, rice, indigo, tobacco and sugar cane were cultivated to feed the population and for export.

Until the 1970s, Mauritius had a predominantly agricultural economic system, based on a mono-crop - sugar cane. With the advent of industrialisation in the '80s and diversification of agriculture, the Mauritian economy rested on a broader base. However, sugar cane still remains the most important agricultural export followed by flowers and vegetables.

Statistics suggest that sugar cane covers about 88% of the cultivable land, 7.5% is under vegetables, fruits and flowers, 3.6% under tea and 0.6% under tobacco. With the implementation of the agricultural diversification policy, sugar cane is intercropped with bean, potato, groundnut, tomato and maize. The results have proved encouraging with the country producing 67% of its needs in potato, 40% in onion, 17% in garlic and 5% in maize. However the contribution of agriculture, the national economy has registered a significant decline with a reduction of the GDP from 23% in 1970 to 9% in 1994, mainly as a result of the rapid expansion of manufacturing, tourism and services. Nevertheless, the sugar industry is the second most important net foreign-exchange earner partly because it requires few imports.

The wind, however, looks set to change in the near future. The success of the island's sugar cane industry and subsequent development has been built on the preferential access to the European market granted under the Lomé Convention's sugar protocol. However, in the new global environment, in which the WTO is gradually expanding the boundaries of free trade, the Sugar Protocol is up for revision in the year 2000. The assumption is that prices and quotas will both come under pressure in the process. To guarantee its productivity and competitive edge, the only choice for the Mauritian economy is to diversify into new sectors.

Street market in Port Louis

Cabbages, carrots, ginger, strawberries, papaya and other crops are yielding encouraging results, though this does not mean that the future is completely rosy. Apart from the tourist industry, which requires quality produce, the domestic market is still very small and there is strong competition in the regional export market. Comparative advantages therefore have to be developed and this cannot take place overnight.

As far as agriculture is concerned the main emphasis must be on diversifying within the sugar sector. One option, for example, is the further processing of certain sugar cane by-products, such as bagasse (left-over fibrous material) which is used as a fuel in power stations. FUEL, one of the country's biggest sugar plantations, has a power-generating plant, the first of its kind, which covers its own electricity needs and then sells its surplus to the grid, meeting almost a third of the electricity demand in the locality. The Chamber of Agriculture estimates that by 2000, the sugar industry will be supplying 40% of domestic electricity on Mauritius, a considerable achievement when one considers that, until now, almost all the island's energy has been imported.

Another source of optimism for the sugar industry is the prospect of investing in the wider region. The local market in Mozambique is more than 100,000 tonnes of sugar a year, and the country currently produces only 15,000 to 20,000 tonnes. A number of sugar factories in Mozambique are currently being overhauled and, as the Diversification Officer at the Mauritian Chamber of Agriculture says, "There is a market there, ripe for the taking." On the other hand, new competition is emerging, particularly from South Africa.

More than in most countries, the future of Mauritius is tied to the wider region in which is situated. The free port operation was set up in 1992 for the transhipment of goods as an extension of the free zone. Goods are imported from many parts of Asia and the majority are then re-exported, after processing, to Africa. Between 1996 and 1997, the number of transactions almost tripled in value from US$ 90m to US$ 240m. Trade is expected to increase by a further 10% over the next few years and this will require considerable expansion. Mauritius is making no secret of the fact that it wants to become the region's biggest transhipment centre and the regular stopping off point on the sea routes between Africa, Asia and Australia.

Date published: November 1998

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