Budget Highlights 2021 - 2022

Budget Highlights 2021 - 2022

The COVID-19 pandemic struck the Mauritian economy hard in 2020. With a contraction rate of 14.7% in 2020, Mauritius was one of the most affected economies in Africa due to its relatively high degree of openness and its reliance on Eurocentric tourism. And the sequels have not yet withered away as of yet. The hospitality industry is suffering from the worst meltdown in its history. Outside the hospitality sector, businesses have curtailed their operations and have furloughed their employees. Unemployment peaked up in 2020 to 9.2%. Without the panoply of bold measures taken by the authorities, the economic calamity would have been much more pronounced. And most of our macroeconomic indicators, including public finances, have been flashing red lights in 2020.

Against a backdrop of such a challenging environment, the Honorable Minister of Finance was confronted to a very delicate balancing act: to help our economy embark on a new boulevard of economic recovery, and maintain our economic resilience through recession-proof socio-economic mechanisms, while continuing to channel support measures into the most affected sectors.

Meeting daily exigencies has become difficult for many households, especially the vulnerable ones. The budget 2021-2022 contained schemes designed to ensure that the vulnerable population is financially endowed to meet the everyday challenges posed by the COVID-19 environment.

As such, the financial breathing space that has been provided to first-time home buyers through the reimbursement of 5 % of loan taken will provide a welcome fillip to the construction sector. New social housing units will also add to that momentum. Emphasis on welfare of the younger segments of the population cannot go unnoticed. Rising unemployment remains a source of concern. In addition to strong growth-enhancing projects (to be enunciated later), the Minister proposed to introduce a national training scheme to address the mismatch problem that currently plagues the labour market. The Digital Industries Academy to be set up by the EDB is a step in that direction.

Mindful of the need to engage in social re-engineering, the Honorable Minister made sure that he extended his purse to stakeholders in key sectors of the economy. As such, sugar planters are set to receive enhanced grants. This measure will help maintain the integrity of the social fabric of the rural regions. In a similar spirit, fishermen are to receive enhanced allocations, amnesties over their past overdue debt and incentives to migrate from artisanal to semiindustrial fishing. Finally, the extension of the Wage Assistance Schemes for those working in tourism sector up to September 2021 is very much needed to preserve real purchasing power. The re-opening of our borders in mid-July will offer a welcome respite to tourism activity.