Mauritius-OECD: Unleashing new pathways for development
31 Oct 2022
Mauritius-OECD: Unleashing new pathways for development
The two-day conference themed ‘International Conference on Digital Economy & Digital Banking’ was officially launched by the Honourable, Prime Minister, Pravind Kumar Jugnauth this morning, 31st October 2022 at Le Meridien, Pointe aux Piments.
The conference is a joint initiative of the Economic Development Board and the Bank of Mauritius, under the high patronage of the Ministry of Finance, Economic Planning and Development.
The opening ceremony saw the participation of around 250 delegates in the presence of The Honourable Pravind Kumar Jugnauth, Prime Minister, Mr. Mathias Cormann, Secretary-General of the Organization for Economic Cooperation and Development and Dr. The Honourable Renganaden Padayachy, Minister of Finance, Economic Planning and Development, Hon. Herve Ndoba, Minister of Finance of the Central African Republic, Mr. Harvesh Kumar Seegolam, Governor of the Bank of Mauritius, Mr. Hemraj Ramnial, Chairman of the Economic Development Board, Governors and Deputy Governors of African Central Banks as well as key representatives and high officials of the public and private sector.
In his opening remarks, Mr. Ken Poonoosamy, CEO of the Economic Development Board underlined that as our ecosystems become increasingly digital, technology continues to accelerate the pace of change in the way we operate, at all levels including government, business, or civil society. He added that digitalization allows the implementation of more efficient and more productive practices and processes and offers new opportunities specially in Africa and its banking sector.
Delivering the keynote address, the Honourable Prime Minister, Pravind Kumar Jugnauth reiterated Government’s commitment to continue to nurture cooperation with international institutions, especially with the OECD with a view to position Mauritius as a Development Model in Africa. He has highlighted that Mauritius is constantly striving to consolidate the reputation of the jurisdiction as a trusted platform in line with the best international practices and norms for investors. Moreover, the Prime Minister also indicated that according to the Capital Economics Report, Foreign Direct Investment (FDI) to the tune of USD 80 billion into mainland Africa is mediated by Mauritius creating 4.2 million jobs in the continent.
The Honorable Prime Minister stated that Mauritius is proud to be associated with the OECD and emphasized the critical role of the institution in matters pertaining to taxation, anti-money laundering, and terrorist proliferation.
As a partner of Africa, Mauritius has developed and implemented the Africa Strategy to further promote cross-border investment and trade.
The Honorable Prime Minister confirmed the Government’s engagement to conform to OECD principles and standards with a view to reinforce confidence in Mauritius as a reliable and transparent jurisdiction for international finance.
To conclude, the Prime Minister expressed the determination of Mauritius to become a member of the OECD and position itself as a springboard to adopt best practices and policies which will pave the way for deepened collaboration.
In his address, Dr. The Honourable Renganaden Padayachy, Minister of Finance, Economic Planning and Development underscored that Mauritius has made significant strides and progress - since its independence in 1968 and is today a vibrant democracy and an efficient market economy, open to the world. He emphasized that Mauritius and the OECD share the same values and principles which are at the foundation of the development process the country.
The finance minister enumerated the series of structural reforms implemented namely the negative income tax, the minimum wage, the Basic Retirement Pension in a bid to reduce inequalities and support growth.
The Minister expressed his confidence about the positive outlook of the economy and underlined that GDP growth will stand at 7.2% in 2022 and above 5% in 2023. He indicated that GDP will surpass the historic mark of MUR 550 billion rupees in 2022. On the other hand, unemployment will decline from 9.2 percent in 2021 to 7.8 percent in 2022. Investments will be in excess of MUR 105 billion in 2022, recording a 13% compared to 2021. Exports of goods and services will be MUR 292 billion rupees, an increase of more than 80 billion rupees compared to 2020.
The Minister underlined the immense potential of the African continent given that the population is expected to double by 2050 to reach 2.5 billion inhabitants. To that score, the Minister of Finance emphasized the importance for regulation and tax harmonization.
In this regard, he expressed his satisfaction that Mauritius is part of the OECD's two-pillar solution and pointed out that Government is working actively on its implementation pursuant to the 15% minimum global tax.
The special guest for the event, Mr. Mathias Cormann, Secretary-General of the OECD stated that the conference bears testimony to the excellent and close relationship shared between the OECD and Mauritius and underlined that this will further strengthen cooperation in the digital market across the continent.
He underlined the importance of upholding the multilateral spirit of cooperation as it is an essential instrument to advance development of Africa and dwelt upon the Agenda 2063, which is the digital blueprint for transforming Africa into a digital continent by promoting inclusive and sustainable growth.
Mr. Cormann urged African political leaders to ensure there is inclusive growth and that no segments of society are left out in the development process. Moreover, he expressed his confidence in the Mauritian economy and commended the Government for its engagement to align with international fiscal system as a matter of priority.
The conference also provided an excellent platform for intensive panel discussions on digitalization opportunities and challenges for Africa as well as the implementation of the OECD Two-Pillar Solution.
The second day of the conference held on 1st November kickstarted with a dedicated presentation by Dr. Navin Beekarry, Director General of the ICAC on digitalization and challenges of the AML/CFT. The Director General highlighted the risks and benefits of Distributed Ledger Technology (DLT) and blockchain technology. He also addressed the Money Laundering and Terrorist Financing Risk associated with Virtual Asset Service Provider (VASP) and Virtual Assets. In this perspective, Dr. Beekarry underlined the importance of effective screening, KYC and customer profiling for onboarding of clients. He also focused on ongoing monitoring of clients through risk-based assessment and alerts on change of circumstances as well as the importance of transaction monitoring.
The session was followed by a special panel discussion on the Future of Banking which was moderated by Mr. Kevin Njiraini, Regional Director of IFC and comprised the following panelists namely, Mr. Godwin Emefiele, Governor of Central Bank, Nigeria, Mr. Jean-Claude Kassi Brou, Governor of Banque Centrale des États de l'Afrique de l'Ouest (BCEAO) & Mr. Bouazza Abderrrahim, Deputy Governor of Bank Al-Mag Mr. Godwin Emefiele, Governor of Central Bank, Nigeria enumerated the major milestones in the digital transformation of the Nigerian banking sector with a view to unlock the potential of the banking sector. Moreover, he highlighted the series of initiatives such as the cashless policy, importance of improving the infrastructure, bank verification number, and enhancing and improve services and penetration to further consolidate the banking and financial services sector. In his intervention, Mr. Jean-Claude Kassi Brou, Governor of Banque Centrale des États de l'Afrique de l'Ouest (BCEAO) underlined the need for a collaborative strategy and partnerships with key stakeholders with a view to enhance the infrastructure and facilitate digital transformation process. Moreover, he underlined the importance of financial stability and the ecosystem to allow for protection of depositors. Mr. Bouazza Abderrrahim, Deputy Governor of Bank Al-Maghrib highlighted that bank should adapt and partner with fintech companies. Moreover, he underscored the necessity for training the market.
In his concluding remarks, the Governor of the Bank of Mauritius, Mr. Harvesh Seegolam urged the central bank governors and regulators to embrace a more collaborative and knowledge sharing view a view to foster more prosperity in the region.
He underlined that during these challenging times, it is instrumental for regulators and central banks to demonstrate more agility and flexibility in their approach. The Governor also emphasized the importance for central banks and regulators to provide clear cut guidance to all regulatees as well as work together to address the challenges and hurdles. He stated that the role of central banks is to create an enabling framework and set up the right parameters and fundamentals for fostering digitalization in banking. Moreover, he underlined that the key strategic area to focus pertains to the risk associated with cyber attacks and in this regard, the Bank of Mauritius has launched four consultations on the use of risk management with a view to ensure the most appropriate framework is implemented to safeguard the banking system and tackle risks. He enumerated the series of initiatives undertaken by BOM such as the issue of a full-fledged guideline on the use of cloud services, the introduction of a dedicated license to allow digital banks to operate in Mauritius and a clear process for digital onboarding of banks. Furthermore, the Governor added that virtual assets represent a major potential and given the volatility of such asset classes, it is the onus of central banks to provide the relevant guidance. He concluded his address by underlining that the digital shift in banking is sine qua non for the African continent.