Export Crisis: Sounding the Alarm for Radical Revamp

The Mauritius Export Association (MEXA) has submitted a memorandum to the Ministry of Finance, outlining a new export model that aims to transform the sector and overcome the challenges it is facing.

The sector is struggling with difficult economic conditions, persistent geopolitical tensions, and a shortage of labor, which is affecting its operational capacity.

The MEXA’s report highlights four key pillars: long-term sustainable growth, competitiveness, market development, and promotion of emerging export sectors.

Firstly, the MEXA is advocating for the establishment of an Independent Industrial and Export Investment Agency, which would have its own structure and resources.

This is because foreign direct investment in the industry has been low for over a decade, and traditional export sectors are not generating exponential growth.

The agency would be responsible for attracting new investments and promoting industrial development.

Secondly, the MEXA is proposing the creation of a Transformation Expertise Fund of Rs 200 million to finance consultancy services on a co-share basis.

This would enable the sector to acquire new skills and expertise, particularly in areas such as product development, technology, and operational re-engineering.

Thirdly, the MEXA is calling for the improvement of the attractiveness of plans and training programs offered by the HRDC to support the development of new skills that are not currently available in Mauritius.

The association is also proposing an increase in the funding limit for foreign expertise from Rs 200,000 to Rs 500,000.

Fourthly, the MEXA is advocating for the promotion of emerging export sectors by “hand-holding” domestic-oriented enterprises that are ready for export.

This would involve identifying new markets such as Tanzania and Kenya and selecting five to ten DOEs that are ready for export.

Government’s Response

Naveena Ramyad, Minister of Industrial Development, has acknowledged that the manufacturing sector is currently facing numerous challenges, particularly in terms of exports.

She has highlighted the unfavorable economic conditions on main export markets, including the ongoing war between Russia and Ukraine, prolonged geopolitical tensions in the Middle East, and growing competition from online sales platforms.

The minister has also acknowledged the shortage of labor in the sector, which is affecting companies’ ability to meet export delivery deadlines.

However, she has emphasized that the government will continue to play a facilitator role in supporting manufacturing companies during these difficult times.

The minister has announced that existing aid packages will be continued, including exceptional support for the payment of minimum wage and salary compensation until Rs 2,500 per employee.

The Ministry of Finance is also working with the Economic Development Board (EDB) to review the current export promotion model and dynamize its strategy to fully tap new market opportunities.

Overall, the MEXA’s report is highlighting the need for a new export model that addresses the challenges faced by the sector and promoting sustainable growth.

Source: Le Mauricien