Mauritius: Budget 2020-2021 Places People At the Heart of Economic Strategies, Says PM

press release

The philosophy of Government is to put the people at the heart of economic strategies and Budget 2020-2021 does exactly that. It draws lessons of the Covid-19 episode to invest and shape a more resilient economy and society. The Prime Minister, Minister of Defence, Home Affairs and External Communications, Minister for Rodrigues, Outer Islands and Territorial Integrity, Mr Pravind Kumar Jugnauth, made this statement, yesterday afternoon, at the National Assembly, during debates on the National Budget.

The Prime Minister highlighted that over the last three months more than Rs 25 billion has been disbursed in fighting the pandemic as saving lives and livelihoods cannot be priced. After having managed the health crisis successfully the focus is on putting the economy and society on a stronger footing for recovery and for bouncing back from one of the worst crisis our country has probably ever known, he indicated.

According to him, Government's approach in dealing with the Covid-19 pandemic has since the very beginning been three-fold: protecting lives, protecting livelihoods, protecting the country's future. Indeed, he emphasised, the 2020-2021 Budget aligns fully with Government's approach and even goes beyond the Covid-19 to lay strong foundations for long-term development.

The Prime Minister remarked that international and local institutions have pointed out that this crisis would probably result in our worst GDP contraction in over a century. The way the crisis has been managed has led to a swift and safe reopening of the country's economic activities but Mauritius is still in a situation of deep and unprecedented economic crisis and it will take a lot of efforts to come out of it, he said.

For Mr Jugnauth, it is important to turn around the country's economic situation and put it on a positive growth path and ensure that the economy not only preserves livelihoods but also creates jobs at a fast pace in early post-Covid-19 years especially for the youth. The economy has over the last five years been on a strong footing even as the world was faced with a slowdown in growth. In fact, growth has been sustained for more than 3.5% annually whilst keeping both inflation and unemployment at one of the lowest levels in the country's history. Inflation has been at 0.5% and unemployment at less than 6.7%.

Speaking about lessons learnt, the Prime Minister underscored the need to have a well prepared and well staffed health sector for both public and private healthcare. He recalled that besides offering the necessary resources for the development of the healthcare sector, Budget 2020-2021 has announced a five-year strategic plan for the sector, the setting up of a national centre for disease control and prevention to combat infectious diseases and the promotion of telemedicine that will contribute to the modernisation of the health sector locally while at the same time, opening up new opportunities for export of healthcare services.

The Budget also promotes the development of a pharmaceutical sector to reduce the country's dependence on imports while at the same time creating new and higher value-added activities in the economy.

Another important lesson learnt, the Prime Minister indicated, is the importance of being self-sufficient. The country imports some Rs 50 billion of food and manufactured goods for local consumption. A large part of these imports can actually be produced here to fuel the growth of local production, the agricultural, seafood, manufacturing and local renewable energy sectors, he stated. This Budget thus introduces numerous measures and incentives on the supply side from easing access to agricultural land financing facilities to industrial and technological parks. It also provides the ecosystem throughout the entire spectrum of the value chain to boost local production and reduce imports.

The Prime Minister further pointed out that the construction sector will help Mauritius in its recovery and investment in major public infrastructure will lead to higher economic growth in the long-term. The fruits of economic growth must be more equally shared and there must be wider participation in the economic development of Mauritius and there is a plethora of incentives to protect and support SMEs, small planters and operators in the informal sector, he stated.

As regards the social aspect, Mr Jugnauth emphasised that in spite of the extremely difficult economic situation the livelihoods of the most vulnerable are being protected and some 12 000 families that is 50 000 citizens will be provided with decent and affordable housing units. Significant strides are being made towards reducing poverty, he noted, adding that rice and flour will be subsidised to make these affordable to low income families and free education and healthcare will be maintained and investment made to improve the quality of services.

All this is being done at a time of global recession and deep economic crisis and this year's Budget provides for an increase of 12.4% in the allocations for social protection, the Prime Minister reminded. On the topic of environment protection, he said that financial resources allocated to the sector have increased by 160% since 2017 and 2018. This year, some Rs 3.5 billion has been allocated representing a 29% increase over last year's allocation.

The National Budget, concluded Prime Minister Jugnauth, not only attends to immediate urgencies of the economy but also prepares for the future of Mauritius. In spite of major economic setbacks leading to declining Government revenue and greater pressures on expenditure, the Budget focuses on preserving livelihoods and continuing on the path of greater inclusiveness and sustainability, he highlighted. 'We are not letting the current difficulties blur our vision of a more prosperous, inclusive and greener Mauritius in the future and Government is committed in ensuring a better and more modern tomorrow for all citizens', he assured.

More From: Government of Mauritius

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