On the occasion of the MMM's end of the year reception at Domaine Anna, the DPM delivered a short but quite sharp and fiery speech , taking stock of 2025 challenges and achievements and earmarking 2026 as a pivotal year for Mauritius, for several key institutions in the country , for the fight against corruption (no more of by-catch deals !) and for the MMM. He also emphasised that his Govt has succeeded in putting the economy back on track.
Yes , we believe that 2026 will be a crucial year for testing the solidity of Allianz du Sanzman and we have our reservations about that because the gist of DPM’s speech was that he will continue pressuring NCR to ensure that some of our key institutions like Air Mts, the Prisons, the EDB and Law and Order - institutions primarily led or populated by PTR nominees -are performing .
Coalitions can only be ruled by discussion, debate and consensus not by one-man show, neither by NCR nor by PRB but the questions as to who is going to have a better grip on the tiller will remain. Please note that the DPM did hint that 2026 will be pivotal for the MMM not for Allianz du Sanzman .
However, we differ on the claim that they have put the economy back on track. While we have managed to find our way back up from the abyss, rebuilding the bridge to the future remains a long way off. We still have a long way to go before the economy is truly back on track . Redressing the economy is a process that demands time, rigour and effective communication.
Our verdict is that we have already wasted one year . We have to be more consistent, rigorous and committed to a realistic fiscal consolidation plan backed by effective communication which is crucial for successfully implementing reforms, not from above , not via decrees in Budget speeches or press conferences , not by blindly applying the recommendations of the IMF, but “lor terrain”, repeatedly engaging with "le ti pep", the trade unions , the NGOs, the businesses, …building broad public consensus and participation on the different reform options like what they have announced for Vision 2050- engaging with various groups, including businesses, labor unions, and civil society organizations to understand concerns and build support. Policy decisions are taken in consultation with LePep rather than for LePep .
This Govt owes its rapid loss of popularity and the explosion of discontent to their failure to communicate effectively and engage in discussions with LePep continuously over the past one year on the different reform options and the needed fiscal adjustment efforts.
“La caisse vide” and there is a genuine attempt at implementing a policy of fiscal consolidation in a situation of shrinking growth to reverse large fiscal deficits and bring down the debt/GDP ratio but there seems to be a persistent inability or unwillingness to communicate with and convince LePep that everyone has to make an effort to “𝒔𝒆𝒓𝒓 𝒔𝒊𝒏𝒕𝒊𝒓” if we want to succeed in redressing the economy within the next three to four years.
Why do we believe that the economy is still off track and that there are many inconsistencies in some of the measures taken (with a display of some arrogance especially the Me-knows-Everything mindset) and some double standards on “𝒔𝒆𝒓𝒓 𝒔𝒊𝒏𝒕𝒊𝒓” ?
1. LePep has been highlighting the inconsistencies between calls for fiscal discipline and ongoing government lifestyle costs. Critics have pointed to high-end vehicle purchases for officials (e.g., new BMWs), ministerial allowances, and frequent official travel as evidence that "government lifestyle" has not curtailed despite the threat of a downgrade. But our representatives tend to rationalise that a cut in these benefits may have negative consequences on their performance/representation and may lead to unethical practices.
2. The fair share contribution for certain corporates is not fair in the context of “𝒔𝒆𝒓𝒓 𝒔𝒊𝒏𝒕𝒊𝒓” for even lower-income groups -a temporary windfall gains tax especially for the companies which had been making record profits and have benefited from the rupee depreciation would have been fairer From June 2014-June 2023, the rupee has depreciated by 48%. 19 companies which were generating profits amounting to Rs 13 bn in 2019 registered profits totalling Rs 24 bn in 2022 and a jackpot of Rs 42 bn in 2023.
3. The government programme for 2025-2029 includes a commitment to reform the expenditure side of the national budget based on the principle of the "judicious use of every rupee”.To address the issue of inefficiency and wastage and generate budgetary savings, Govt committed itself to undertake a series of reorganization.(including rationalising Parastatals) and thus save Rs 5 billion over a 3-year period.
They were to start with the MIC. One year has gone by, we have kicked out one governor and replaced him by a more promising one but BoM is still struggling to load off the MIC, raising concerns about its governance, transparency, potential financial losses, and the central bank's independence. Despite a capital injection of Rs 3 bn in June 25, BoM’s capital and reserves would be significantly affected. The perception that BoM’s capital is significantly impaired will weigh down heavily on the central bank’s effectiveness in achieving monetary policy and financial stability objectives.
4. State-owned enterprises (SOEs) continue to represent a massive burden, with recurrent capital injections required to sustain their operations despite poor performance.
5. Efforts to implement structural reforms in the Energy , Tourism (including Air Mauritius) and the Port sectors and set up the foundation for new growth pillars can be described as "sluggish" and insufficient to help in lifting the growth potential beyond 3%.
6. The new economic Model is defined in budget speech 2025-26 as building growth through transformative investment, i.e replacing the inherited consumption-driven approach with an investment-led growth model. The latest National Accounts figures show that we are still struggling with the old model . Final consumption expenditure as a % of GDP is still around 83% of GDP and Household consumption is still growing as high as 3% while the investment rate has dropped from 21.0% to 19.9 %. (not surprising as non-targeted social spending is still being privileged over capital investment ). One of the worrying signs is another dismal performance of exports of goods this year registering a negative growth of -0.8% after a mere 0.5% growth in 2024.
7. The lack of consistency and effective communication have led to the inability of Govt in convincing LePep about the inevitability of some reforms which they consider now to be far removed from their ground reality and the absurd realities of an outdated growth model. Let us take the case of the recent PRB awards . It reflects some outrageous inconsistencies . For the 14th month bonus, Govt cannot afford to give it to everyone, bizain "𝒔𝒆𝒓𝒓 𝒔𝒊𝒏𝒕𝒊𝒓”. For the cost of living allowance, the same logic applies, bizain "𝒔𝒆𝒓𝒓 𝒔𝒊𝒏𝒕𝒊𝒓” . But not for the PRB awards, top civil servants were awarded an average monthly salary increase of Rs 40,000 -𝙥𝙤𝙪 𝙯𝙤𝙩 𝙡𝙖 𝙘𝙖𝙞𝙨𝙨𝙚 𝙥𝙖 𝙫𝙞𝙙…
Is it an attempt to buy them in to implement their reform programme ,given that Govt has lost the trust of LePep and the rank and file of the civil service ?
As I have highlighted in my previous post , the PRB report is a national dupery , a total rip off orchestrated by bureaucrats and administrators for their own benefit.
Paul Lismore rightly points out ”𝑻𝒉𝒊𝒔 𝒊𝒔 𝒘𝒉𝒂𝒕 𝒕𝒉𝒆 𝑷𝑹𝑩 𝒊𝒔: 𝒂𝒏 𝒆𝒙𝒆𝒓𝒄𝒊𝒔𝒆 𝒓𝒖𝒏 𝒃𝒚 𝒂 𝑺𝒆𝒏𝒊𝒐𝒓 𝒄𝒊𝒗𝒊𝒍 𝒔𝒆𝒓𝒗𝒂𝒏𝒕 𝒕𝒐 𝒆𝒏𝒔𝒖𝒓𝒆 𝒕𝒉𝒂𝒕 𝒕𝒉𝒆 𝒖𝒔𝒆𝒍𝒆𝒔𝒔 𝒐𝒏𝒆𝒔 𝒂𝒕 𝒕𝒉𝒆 𝒕𝒐𝒑 𝒓𝒆𝒄𝒆𝒊𝒗𝒆 𝒕𝒉𝒆 𝒍𝒂𝒓𝒈𝒆𝒔𝒕 𝒄𝒉𝒖𝒏𝒌 𝒐𝒇 𝒕𝒉𝒆 𝒄𝒂𝒌𝒆 𝒂𝒔 𝒑𝒐𝒔𝒔𝒊𝒃𝒍𝒆, 𝒘𝒉𝒆𝒏 𝒕𝒉𝒆𝒚 𝒔𝒉𝒐𝒖𝒍𝒅 𝒃𝒆 𝒓𝒆𝒄𝒆𝒊𝒗𝒊𝒏𝒈 𝒇.... 𝒂𝒍𝒍. 𝑰𝒏𝒄𝒐𝒎𝒑𝒆𝒕𝒆𝒏𝒄𝒆 𝒊𝒏 𝒕𝒉𝒆 𝒑𝒖𝒃𝒍𝒊𝒄 𝒔𝒆𝒄𝒕𝒐𝒓 𝒊𝒔 𝒃𝒆𝒊𝒏𝒈 𝒎𝒂𝒔𝒔𝒊𝒗𝒆𝒍𝒚 𝒓𝒆𝒘𝒂𝒓𝒅𝒆𝒅 𝒘𝒊𝒕𝒉 𝒆𝒗𝒆𝒓𝒚 𝑷𝑹𝑩.𝑶𝒖𝒓 𝒈𝒐𝒗𝒆𝒓𝒏𝒎𝒆𝒏𝒕𝒔? 𝑶𝒖𝒓 𝒑𝒐𝒍𝒊𝒕𝒊𝒄𝒊𝒂𝒏𝒔? 𝑻𝒉𝒆𝒚 𝒅𝒐𝒏'𝒕 𝒈𝒊𝒗𝒆 𝒂 𝒇... 𝑰𝒕 𝒊𝒔 𝒏𝒐𝒕 𝒕𝒉𝒆𝒊𝒓 𝒎𝒐𝒏𝒆𝒚. 𝑰𝒕 𝒊𝒔 𝒕𝒉𝒆 𝒗𝒐𝒕𝒆𝒔 𝒕𝒉𝒂𝒕 𝒄𝒐𝒖𝒏𝒕…”
Is that how we will bring the economy back on track ? Is that how we will convince LePep that bizain "𝒔𝒆𝒓𝒓 𝒔𝒊𝒏𝒕𝒊𝒓” ?
𝙀𝙣𝙖 𝙙𝙚 𝙦𝙪𝙤𝙞 𝙇𝙚𝙋𝙚𝙥 𝙥é 𝙖𝙠𝙞𝙯 𝙯𝙤𝙩 𝙙𝙚 “𝙫𝙤𝙡𝙚𝙪𝙧 𝙥𝙚𝙣𝙨𝙞𝙤𝙣” !
