Our Minister of Finance, present at the 16th General assembly of MEXA, wanted to show his support to the sector “ et saluer leur performance et leur contribution positive par rapport à tout ce qu'ils ont fait pour rattraper le retard occasionné par les effets de la pandémie sur leurs operations “
Notre Pada avance que "le chiffre d'exportation de 2021 a dépassé celui de 2019. ……. it est prévu que les chiffres pour 2022, seront encore meilleurs “.
….And his colleague, the “Bholah” even talks about the resilience of the export sector.
Non, mon Cher , Pada, that’s in nominal terms ; a better comparison of our performance since 2014 taking into consideration the export price index which stood at 128.2 in 2021 , 117.7 in 2020 , 97.9 in 2018 and 95.8 in 2014 , shows, as in the table below, that we are still far from the level of exports, in volume terms, of past years, even that of 2019.
There is very little sign of the resilience of the sector; on the contrary we have every reason to worry about the declining strength of our export sector reflected in declining market share of our traditional exports and our exports of goods as a % of GDP which now stands at only 17% of GDP compared to 27% in 2014.
“Between 2009 and 2019, exports (of goods and services) dropped from 57 to 40 percent of GDP. Over the same period, the country lost market share in all of its six largest export sectors. This includes tourism, where before COVID-19 Mauritius showed solid growth but still performed below regional competitors, as well as as apparel and business services, where Mauritius’ export growth was negative. Mauritius gained market share in some non-traditional manufacturing activities, including fertilizer, medical devices, and optical glasses but these remain relatively small. Generally, Mauritius lost significant export volume in less sophisticated traditional products but was unable to scale up more complex new exports at a sufficient scale to compensate the decline .’ WORLD BANK: Mauritius Systematic Country Diagnostic (SCD) Update , January 2022.
Contemptuously critical of those who are claiming that “le pire est derrière la porte”, he displays conspicuously his treasure chest of foreign reserves amounting to some $ 8.1 billion .
With Moody’s breathing down his neck, and the deteriorating current account balance and the BOP deficit, our Pada had no choice but to lean on foreign borrowings to boost up the level of external reserves.
To supplement reserves govt had recourse to exceptional foreign financing(since March 2020) which included
-the loans taken by Govt from the African Development Bank (AfDB), the Agence Francaise de Development (AFD), the Japan International Cooperation Agency (JICA),
-the foreign investments in Govt securities,
-the allocation of SDRs by the IMF,
-the external borrowing by the Bank of Mauritius (BoM), currently amounting to over USD 1 bn
If reserves are already at such a comfortable level, as our Pada is claiming, where was the need for BoM to borrow so heavily?
Still, a shortage of foreign currency continues to prevail. Why is he having so much pains to stabilise the rupee, which has already lost a quarter of its value over the last 3 years?
Non, Mr Pada, L’economie va mal, même très mal…
"The efforts to window-dress the external situation through more foreign borrowings are largely cosmetic. Foreign exchange remains scarce in spite of excess forex liquidity held at banks. The domestic onshore economy reflects a large balance of payments deficit, which is increasingly vulnerable to capital outflows. Even with a modest growth recovery, steeper price increases and an elevated debt burden are not conducive to an improved economic outlook."
Indeed, a grim outllook….
