In his intervention at “la reunion plénière du groupe des superviseurs bancaires francophones” our Pada was all in raptures about the economy. “ L’économie mauricienne est aujourd’hui en pleine expansion....Et alors que de nombreux pays entrent ou craignent une récession, Maurice affiche une croissance du PIB ….……supérieure à 8%.....C’est dire si la reprise est là. ....
....Sur le plan des investissements, nous avons atteint la barre historique des 110 milliards de roupies mauriciennes pour l'année 2022 soit environ 2,4 milliards d’euros. De même, les exportations ont dépassé le seuil des 314 milliards mauriciens en 2022, en augmentation de 48,3% par rapport à 2021.
....Enfin, nous avons enregistré une nette augmentation de 23% dans la collecte des recettes entre le second semestre de 2021 et celui de 2022. Plus précisément, les recettes fiscales collectées ont bondi de 51,38 milliards de roupies pour la période juillet 2021-décembre 2021 à 62,97 milliards de roupies pour la période juillet 2022-décembre 2022.........La crise est aujourd’hui derrière nous.”
Please note there was no mention about the exceptional use of massive monetary deficit financing for the “réponse historique à hauteur de 32% de notre PIB” which has landed us with one of the highest inflation rate in sub-Saharan Africa and our BoM , despite ratcheting up interest rates to tame our runaway inflation, is having recourse to threats and a limited form of FX control to gain back some of its lost credibility and independence.
We did it last time, trying our best to correct Pada’s failure to separate the signal from the noise; he does not seem to have learnt anything, he is persisting in cheering at the nominal buoyancy.
1. Pada’s 1st Illusion: With accelerating inflation, nominal variables have little informational value about underlying real quantities. Our nominal GDPmp in 2022 is 11.3 higher than in 2019. Despite the 8.7 % growth in 2022, the level of real GDP in 2022 is still about 96% of the pre-pandemic 2019 real GDP .
2. Pada’s 2nd illusion: As the Mauritian economy is recovering and struggling to tackle the new challenges of "permacrisis", not all of the sectors have returned to pre-pandemic levels of economic activity; some of our activities still remain below the pre-pandemic path. Our exports of goods in real terms in 2022 were 95 % of that of 2019. Moreover, there is very little sign of the resilience of the exports 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 exports of goods which as a % of GDP now stands at only 18% of GDP compared to 27% in 2014.
Exports of goods and services grew by 38% in real terms in 2022 boosted by the 53% growth in services. Many of the earnings arising from the provision of a factor of production: labor, financial assets, etc which were previously included in Primary Income have now been re-classified under exports of services. A better comparison is the Current Account figures ( which includes both exports of goods and services and primary income ) of 2022 and 2019. The CA deficit in 2022 is around some 12% of GDP whereas it was only 5% in 2019.
Mr Pada , in front of an international audience of distinguished central bankers, economists , colleagues and the press , one cannot accept such vacuities from a Minister of Finance(MoF) - “les exportations ont dépassé le seuil des 314 milliards mauriciens en 2022, en augmentation de 48,3% par rapport à 2021” -especially when we , as well as our invited guests, know very well that we are suffering from a shortage of FX because of the enormous gap in our Current Account that is not being offset by capital and other inflows.
3. Pada’s 3rd illusion : Real investment which was Rs 90 billion in 2019 sunk to Rs 86 billion in 2022- 91% of the 2019 figure. Pre 2014, the investment rate (nominal GFCF /GDPmp) was higher than 20% of GDP for some seven consecutive years peaking at around 26%. Since 2014, it has averaged a mere 18% .
We have become used to the usual hyperboles of our Pada- “La barre historique des investissements”! You recall the BBB
Big Budget Bluff (BBB) on Public Sector Investment. In his 2021/22 Budget he claimed to set a new strategy with a key pillar, namely “Giving an Exceptional Boost to Investment”. The budget document, at Para 32, highlights the “launching an unprecedented investment drive in the economy”, and at para 132, we are supposed to expect a “ surge in public sector investment over the next three years”.
Instead of the“exceptional” or “unprecedented” public investment , Statistics Mauritius NA publication shows that public investment as % of GDP fell from 5.2 % in 2019 to 3.9% in 2022 and Public investment as a % of total investment dropped to 20% in 2022 from 27.2 % in 2019. What a bluffer, he should de sacked for that, an underperformer MoF!
On Fiscal revenue, Pada was so eager to brag about that “les recettes fiscales collectées ont bondi “ that he ended up confirming what many bloggers and analysts had been saying at budget time - “it is a budget that collects billions in taxes, especailly on the inflated value of our .consumption but throws out only a few crumbs to the retired and those hard-working families who have seen their spending power melt away by hikes in inflation “
We , taxpayers feel that we have been conned ; the billions collected, instead of being passed on to consumers in terms of sustainable, inclusive and broad-based growth that would have made a difference in the welfare of the common citizen, went to finance populist measures and prestige projects like the Metro , the Cote d’or stadium, Safe City or wasted on such blunders/scams like Betamax, and as the Audit Report now reports, on Pack & Blister and on the STC contracts to “quincailleries” and on Molnupiravir .
The Audit Report enn reklam sa ! Why about the other cases where they were been misusing taxpayers’ money - the Mayhem at Dubai, Liverpoolgate , MICgate and the inflated expenditures on security, gardiennage, drains…
Notre Cher Pada, so satisfied of his delivery “devant ce parterre de personnalités distinguées,” who would be flying back home convinced that Mts is on the right track; unless they dare or happen to wend their way to our remaining but still democratic space where they may come across a totally different and more critical perspective and narrative- of an uncomfortable and unpalatable truth that are rarely heard or listened to in the other Mts , like this request from one of our taxpayers-
“ Our dear, MOF , please spend our money to accelerate development, not to arrest it”
