Afsar Azize Abdulla Ebrahim “A turnaround exercise gives the company a chance of survival”
Immunization campaigns around the world play a huge role in restoring confidence in the global economy, observes the Director and Founding Partner of Kick Advisory Services. For Afsar Ebrahim, given its small size which limits its growth, the Mauritian economy is in dire need of foreign capital and investment. Likewise, we need to expand our market by refocusing on Africa. He also insists on the need to strengthen the partnership between the public and private sectors.
After contracting 15.2% in 2020, the Mauritian economy will begin a slow recovery. The latest estimates from MCB Focus show growth of 6.3% this year. Do you fall into the category of optimists or pessimists?
Of course I am and remain optimistic! The whole world has come to a standstill, but there are now signs that the health crisis will most likely be brought under control in the coming months. Vaccination campaigns launched around the world are playing a huge role in restoring confidence in the global economy. Regarding Mauritius, 25% of the economy has literally stopped. However, thanks to the combined efforts of the authorities, the private sector and the people of Mauritius, our country has remained ‘Covid Safe’ to this day.
This bodes well for the recovery. Once the vaccination protocol is established, I think that the confidence and the tourists will return, even though we are far from our traditional markets and our recovery depends on how these markets cope with the health crisis as well as the desire of their citizens to travel long distances.
The other challenge relates to access to air transport and the willingness of airlines to come to us. There is no such thing as a post-Covid period, but the risk management and trade-off we are willing to accept should show signs of recovery, but 2021 looks like another lost year, much worse than 2020, which has seen an aggressive first trimester. Our other traditional sectors, such as the textile industry, are expected to experience positive developments and the depreciation of the rupee will give the export sector a big boost.
The construction sector will remain, I think, difficult unless massive investments are made in infrastructure. Financial services remain our bright spot, even though the blacklist is a major problem. So far, this sector has shown resilience and has continued to persevere. In my humble opinion, it can provide the necessary boost to the economy by becoming the engine of growth.
“The Covid-19 caused all savings to press the reset button” – Afsar Azize Abdulla Ebrahim.
What shapes should the stimulus curve take: U, L or saw-shaped?
It is difficult to give a definitive answer because there are so many things and variables that need to be considered at the same time. I call with all my vow for hockey stick curve growth over the next five years, but right now our small economy seems to be blocking growth. For real growth, we need capital, foreign investment and foreign investors to settle in Mauritius. We should also expand our market by refocusing on Africa and see how to get the most out of a new strategy.
Covid-19 caused all savings to hit the reset button. There are many advantages that we must take full advantage of. One of them is the fact that the private and public sectors have traditionally worked together to move the country forward. We must continue to build on it. As we move forward towards our future, we cannot do things like in the past. I believe that a clear vision with a well executed strategy should get the economy back on track.
After ten extremely tense months, have you noticed a return of confidence within the business community?
There were indeed problems, but we must realize that the general global context is unprecedented. As I said, since our independence we have seen the country overcome incredible challenges when the public and private sectors worked in tandem. This time around, I believe it is again the key factor in Mauritius’ success.
It is a competitive advantage that we must not allow to erode. Since Independence, we have had so many new entrepreneurs, so many new businesses, so many high value-added jobs created and today we have a growing middle class. In addition, we can rely on a pool of entrepreneurs, business leaders, professionals who work hard; they are fully committed Mauritians. Covid-19 has had a negative impact on everyone, but we need to refocus, realign our common interest and put our efforts at the service of a common goal. All we need is “A few good men,” like in the Tom Cruise movie from the early 1990s (I mean men and women).
“The hotel sites are very well located, the management is world class and the level of service remains legendary” – Afsar Azize Abdulla Ebrahim.
What shapes should the stimulus curve take: U, L or saw-shaped?
It is difficult to give a definitive answer because there are so many things and variables that need to be considered at the same time. I call with all my vow for hockey stick curve growth over the next five years, but right now our small economy seems to be blocking growth. For real growth, we need capital, foreign investment and foreign investors to settle in Mauritius. We should also expand our market by refocusing on Africa and see how to get the most out of a new strategy. Covid-19 caused all savings to hit the reset button.
There are many advantages that we must take full advantage of. One of them is the fact that the private and public sectors have traditionally worked together to move the country forward. We must continue to build on it. As we move forward towards our future, we cannot do things like in the past. I believe that a clear vision with a well executed strategy should get the economy back on track.
As of October 1, Mauritius is on the European Union’s blacklist. So far, the impact on the banking and non-banking financial sector has been able to withstand the shock. While waiting for the “delisting” which will not take place before 2022, will the solution for the financial sector lie in its ability to move upmarket and offer products and services with higher added value?
Don’t get me started on this topic! Considering all the policies and rules that have been implemented, the inclusion of Mauritius on the European Union’s blacklist is beyond my understanding. We are all familiar with the hypocrisy surrounding high-level politics around this particular blacklist issue. No one will dare to call the Netherlands or Delaware a tax haven, or even the UK, and I will not comment on the possible geopolitical reasons for this listing.
But the truth is, the Mauritius International Financial Services Center is well regulated, run by top notch professionals (except, I admit, for a handful of cowboys, but these exist in all jurisdictions) and that it is supported by our independent judiciary through a business-friendly legal framework.
The new companies in the offshore sector were incorporated during the period of closure. That says a lot about the resilience of this sector. In fact, I firmly believe that the financial services industry remains our asset. It has all the ingredients to pull the whole country out of its current predicament. Its ability to create jobs and add value to the economy is phenomenal. We have already put in place the right legislation. All it really takes is some coordination of our offers in the market, light regulation, while continuing to comply with all money laundering and terrorist financing standards, and a clear “Go-to-Market” strategy. –Afsar Azize Abdulla Ebrahim