2018 Index of Economic Freedom

Mauritius

overall score75.1
world rank21
Rule of Law

Property Rights68.7

Government Integrity52.1

Judicial Effectiveness69.6

Government Size

Government Spending80.7

Tax Burden91.0

Fiscal Health73.7

Regulatory Efficiency

Business Freedom77.5

Labor Freedom66.8

Monetary Freedom82.9

Open Markets

Trade Freedom88.7

Investment Freedom80.0

Financial Freedom70.0

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Quick Facts
  • Population:
    • 1.3 million
  • GDP (PPP):
    • $25.9 billion
    • 3.4% growth
    • 3.4% 5-year compound annual growth
    • $20,422 per capita
  • Unemployment:
    • 7.8%
  • Inflation (CPI):
    • 1.0%
  • FDI Inflow:
    • $349.4 million
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Mauritius’s economic freedom score is 75.1, making its economy the 21st freest in the 2018 Index. Its overall score has increased by 0.4 point, with improvements in scores for the government integrity and property rights indicators offsetting a decline in judicial effectiveness. Mauritius is ranked 1st among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional and world averages.

Solid economic policies and prudent banking practices helped business-friendly Mauritius survive the global financial crisis. Its trade and investment outreach around the globe since then has increased exports of goods and services, including tourism, and lower oil prices have kept inflation low. An efficient and transparent regulatory regime supports broad-based economic development, and competitive tax rates and a flexible labor code facilitate private-sector growth. A sound legal framework protects property rights. The pace of reform has slipped, suggesting a deterioration in competitiveness.

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Background

Mauritius gained independence from the U.K. in 1968. Former president Sir Anerood Jugnauth became prime minister for the third time in 2014. In January 2017, Jugnauth resigned as prime minister and appointed his son to succeed him, creating resentment within both the ruling coalition and the opposition. Mauritius has undergone a remarkable economic transformation from a low-income, agriculturally based economy to a diversified, upper-middle-income country that has attracted considerable foreign investment and has one of Africa’s highest per capita GDPs. The government is trying to modernize the sugar and textile industries while promoting diversification into such areas as information technology and financial and business services. Services and tourism remain important economic drivers, and maritime security is a priority.

Rule of LawView Methodology

Property Rights 68.7 Create a Graph using this measurement

Government Integrity 52.1 Create a Graph using this measurement

Judicial Effectiveness 69.6 Create a Graph using this measurement

Mauritius has made property registration easier by digitizing its land records. Real property rights are respected, but enforcement of intellectual property laws is relatively weak. The judiciary continues to be independent, and the legal system is generally nondiscriminatory and transparent. Anticorruption laws are not enforced effectively. Officials sometimes engage in corrupt practices with impunity.

Government SizeView Methodology

The personal income and corporate tax rates are a flat 15 percent. Other taxes include a value-added tax. The overall tax burden equals 21.2 percent of total domestic income. Over the past three years, government spending has amounted to 25.4 percent of total output (GDP), and budget deficits have averaged 3.4 percent of GDP. Public debt is equivalent to 62.7 percent of GDP.

Regulatory EfficiencyView Methodology

Mauritius ranks first in Africa and 49th worldwide in the World Bank’s 2017 Ease of Doing Business Index. Despite a relatively flexible labor market, there is a skills mismatch between supply and demand, with a shortage of skilled labor at the technical and middle-management levels. Transfers to state-owned enterprises and poorly targeted welfare benefits consume considerable fiscal resources, and no significant reforms were implemented in 2016–2017.

Open MarketsView Methodology

Trade is extremely important to Mauritius’s economy; the combined value of exports and imports equals 108 percent of GDP. The average applied tariff rate is 0.6 percent. Nontariff barriers impede some trade. In general, government policies do not significantly interfere with foreign investment. The growing financial sector, dominated by private commercial banks, is competitive. The number of nonperforming loans is declining, and banks are well capitalized and resilient.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius75.10.4
2Botswana69.9-0.2
3Rwanda69.11.5
4South Africa630.7
5Uganda621.1
6Côte d'Ivoire 62-1.0
7Seychelles61.6-0.2
8Burkina Faso600.4
9Cabo Verde603.1
10Tanzania59.91.3
11Namibia58.5-4.0
12Nigeria58.51.4
13Gabon58-0.6
14Mali57.6-1.0
15Guinea-Bissau56.90.8
16Madagascar56.8-0.6
17Benin56.7-2.5
18Comoros56.20.4
19Ghana56-0.2
20Swaziland55.9-5.2
21Senegal55.7-0.2
22Kenya54.71.2
23Zambia54.3-1.5
24Mauritania54-0.4
25Lesotho53.90.0
26São Tomé and Príncipe 53.6-1.8
27Ethiopia52.80.1
28The Gambia52.3-1.1
29Guinea52.24.6
30Democratic Republic of Congo52.1-4.3
31Malawi52-0.2
32Cameroon51.90.1
33Sierra Leone51.8-0.8
34Burundi50.9-2.3
35Liberia50.91.8
36Niger49.5-1.3
37Sudan49.40.6
38Chad49.30.3
39Central African Republic49.2-2.6
40Angola48.60.1
41Togo47.8-5.4
42Mozambique 46.3-3.6
43Djibouti45.1-1.6
44Zimbabwe440.0
45Equatorial Guinea42-3.0
46Eritrea41.7-0.5
47Republic of Congo 38.9-1.1
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