Figure 1: Merchandise Trade Balance in Mauritius (2015-2018)
Source: UNCTAD 2019, UNCTADStat Database.
Total merchandise imports to Mauritius have increased to USD 5.7 billion in 2018, from an annual average of USD 4.7 billion from 2015 to 2017[1]. Exports also increased to USD 2.4 billion in 2018, from an annual average of USD 2.3 billion from 2015 to 2017[2]. The stronger growth in imports has worsened Mauritius’s merchandise trade balance which deteriorated to a deficit of -USD 3.3 billion in 2018 from a deficit averaging -USD 2.5 billion from 2015 to 2017[3]. The growth in imports has not led to a significant deterioration of gross official reserves supported by growing services trade and financial account surpluses.
Figure 2: Gross Official Reserves in Mauritius (2016-2024)
Sources: IMF 2019, Mauritius 2019 Article IV Report; IMF 2017, Mauritius 2017 Article IV Report. Note: (*) Figures from 2019 onwards are projections from the IMF, 2019.
Gross official foreign exchange reserves increased to USD 6.3 billion in 2018 from an annual average of USD 5.0 billion from 2015 to 2017[4]. During this period, the MUR appreciated by 1.5% in 2018 to MUR 34.0 per USD (2017: 2.9%)[5]. Merchandise imports have grown in 2017 and 2018 due to the MUR appreciation because the appreciation follows significant depreciation in 2015 and 2016. The MUR depreciated by an annual average of -22.6% in 2015 and 2016 from MUR 30.6 per USD in 2014 to MUR 35.5 per USD in 2016[6]. Gross official reserves are projected to increase to USD 6.4 billion in 2019, which is equivalent to 9.2 months’ import cover[7]. In the forward-looking medium-term from 2020 to 2024, gross official reserves are projected to increase to an annual average of USD 7.0 billion (approx. 9.2 months’ import cover)[8]. The slower growth in exports and growing imports has had a short-term negative impact on Mauritius’s current account balance in 2018 but in the forward-looking medium-term the current account balance is projected to return to its medium-term average.
Mauritius’s current account balance deteriorated to a deficit of -USD 892.0 million in 2018, from a deficit averaging -USD 553.7 million from 2015 to 2017[9]. Apart from the growth in merchandise imports, which deteriorated the current account balance, the balance of services trade has improved and Mauritius’s net income from abroad increased which slowed the deterioration of the current account balance. The balance of services trade improved to a surplus of USD 1.1 billion in 2018 from a surplus averaging USD 769.0 million from 2015 to 2017[10]. Mauritius’s net income from Category 1 Global Business Companies increased to USD 1.3 billion in 2018 from an annual average of USD 1.0 billion from 2015 to 2017[11]. The current account balance is projected to deteriorate to a deficit of -USD 1.1 billion (approx. -7.4% of GDP) in 2019[12]. In the forward-looking medium-term from 2020 to 2024, the current account balance is projected to improve to annual average deficit of -USD 1.0.3 billion (approx. -5.6% of GDP)[13].
Figure 3: Current Account Balance in Mauritius (2016-2024)
Sources: IMF 2019, Mauritius 2019 Article IV Report; IMF 2017, Mauritius 2017 Article IV Report. Note: (*) Figures from 2019 onwards are projections from the IMF, 2019.
However, Mauritius is still is still dependent on agricultural exports which have made exports earnings volatile due to exports being vulnerable to the adverse impact of climate change. In addition, Mauritius is dependent on diamonds and clothing and textile exports even though these exports have more domestic value-addition and can diversify away from agricultural exports. Clothing and textiles (28.0%), fish (18.5%), sugar (6.1%) and diamonds (3.6%) constituted 52.6% of Mauritius’s total export earnings in 2018 which has decreased from the average of 59.8% from 2015 to 2017 (2014: 50.1% of exports)[14]. In spite to this concentration of exports, Mauritius is well integrated in terms of regional exports with neighbouring countries in COMESA; Mauritius is poorly integrated due to low levels of intraregional trade in SADC and intraregional imports in COMESA, and all and its trade in SADC is unbalanced.
The top-five exports from Mauritius to COMESA are sugar cane products, woollen fabrics, textiles, clothing and television receivers which constituted 4.8% of total exports in 2018 (2015-‘17: 3.9% of total exports)[15]. The value of the top-five exports from Mauritius to COMESA increased to USD 112.9 million in 2018 from an annual average of USD 86.9 million from 2015 to 2017[16].
The value of total exports from Mauritius to COMESA decreased to USD 137.5 million (approx. 13.6% of total exports) in 2018 from an average of USD 143.5 million (approx. 14.4% of total exports)[17]. These are relatively high or above-average levels of intra-regional trade given that the COMESA average intra-regional exports level was 11.9% of total exports in 2018. The COMESA intra-regional exports, meaning total exports amongst COMESA countries, as a share of total exports to the world increased from an average of 10.5% from 2015 to 2017[18].
Figure 4: Nominal Exchange Rate in Mauritius (2015-2018)
Sources: IMF 2019, Mauritius 2019 Article IV Report; IMF 2017, Mauritius 2017 Article IV Report.
Mauritius’s top-five imports from COMESA are fish, spices, tobacco, food and cotton. Although these imports are diversified they constituted only 2.7% of total imports to Mauritius in 2018 (2015-‘17: 3.2% of total imports)[19]. The value of the top-five imports from COMESA to Mauritius decreased to USD 152.7 million in 2018 from an annual average of USD 155.3 million from 2015 to 2017[20].
The value of Mauritius’s total imports from COMESA decreased to USD 212.6 million (approx. 3.8% of total imports) in 2018 from an annual average of USD 211.5 million (approx. 4.4% of total exports) from 2015 to 2017[21]. These are relatively poor or below-average levels of intra-regional trade given that the COMESA average intra-regional imports level was 6.5% of total imports in 2018[22]. The COMESA intra-regional imports, meaning total imports amongst COMESA countries, as a share of total imports from the world increased only from an average of 5.5% from 2015 to 2017[23].
Table 1: COMESA Regional Trade for Mauritius (2015-2018)
Source: UNCTAD 2019, UNCTADStat Database.
Mauritius maintains a persistent but narrow merchandise trade surplus in COMESA which decreased to USD 21.2 million in 2018 (2015-’17: USD 27.0 million). Hence, there is little room to increase Mauritius’s imports to COMESA countries. This would make Mauritius’s intra-regional trade balance in COMESA more equitable.
The top-five exports from Mauritius to the SADC are all clothing and textile products, which constituted 8.2% of total exports in 2018 (2015-‘17: 7.9% of total exports)[24]. The value of the top-five exports from Mauritius to SADC increased to USD 194.2 million in 2018 from an annual average of USD 177.2 million from 2015 to 2017[25].
The value of total exports from Mauritius to the SADC decreased to USD 398.6 million (approx. 16.8% of total exports) in 2018 from an average of USD 396.2 million (approx. 17.5% of total exports)[26]. These are relatively poor or below-average levels of intra-regional trade given that the SADC average intra-regional exports level was 17.9% of total exports in 2018. The SADC intra-regional exports, meaning total exports amongst SADC countries, as a share of total exports to the world decreased from an average of 20.8% from 2015 to 2017[27].
Table 2: SADC Regional Trade for Mauritius (2015-2018)
Source: UNCTAD 2019, UNCTADStat Database.
Mauritius’s top-five imports from SADC are petroleum, coal, fish, spices and cotton. Although these imports are diversified they constituted only 5.6% of total imports to Mauritius in 2018 (2015-‘17: 4.7% of total imports)[28]. The value of the top-five imports from SADC to Mauritius increased to USD 315.1 million in 2018 from an annual average of USD 227.1 million from 2015 to 2017[29].
The value of Mauritius’s total imports from SADC increased to USD 671.2 million (approx. 11.8% of total imports) in 2018 from an annual average of USD 536.6 million (approx. 11.2% of total exports) from 2015 to 2017[30]. These are poor or below-average levels of intra-regional trade given that the SADC average intra-regional imports level was 20.9% of total imports in 2018[31]. The SADC intra-regional imports, meaning total imports amongst SADC countries, as a share of total imports from the world increased only from an average of 20.7% from 2015 to 2017[32].
Mauritius maintains a persistent and growing merchandise trade deficit in SADC which increased to a deficit of -USD 272.7 million in 2018 (2015-’17: -USD 140.3 million). Mauritius is more reliant on the SADC for its imports but there is significant room to its increase its imports from SADC. Given the balance of merchandise trade in SADC there is significant room to increase and diversify its exports to SADC countries. This would make Mauritius’s intra-regional trade balance in SADC more equitable.
Ultimately, Mauritius’s integration in COMESA and SADC is ongoing. Mauritius is better integrated in terms of its exports in COMESA and there is room to increase its imports from the region. In SADC, Mauritius is poorly integration in terms of its low and below-average levels of intraregional trade which means there is room to increase intraregional trade with other SADC countries. In addition, Mauritius has a persistent and growing trade deficit in SADC which means there is more significant room to increase its exports to the region. Therefore, Mauritius still has a long way to go to improve the levels of intraregional trade in COMESA and SADC.
[1] UNCTAD 2019. UNCTADStat Database, United Nations Conference on Trade and Development: Geneva. Available At: https://unctadstat.unctad.org/ [Last Accessed: 26 September 2019].
[2] UNCTAD 2019. UNCTADStat Database, ibid.
[3] UNCTAD 2019. UNCTADStat Database, ibid.
[4] IMF 2019. Mauritius 2019 Article IV Report, International Monetary Fund: Washington, D. C. Available At: https://www.imf.org/ [Last Accessed: 15 October 2019]; IMF 2017. Mauritius 2017 Article IV Report, International Monetary Fund: Washington, D. C. Available At: https://www.imf.org/ [Last Accessed: 15 October 2019].
[5] IMF 2019. Mauritius 2019 Article IV Report, ibid.
[6] IMF 2019. Mauritius 2019 Article IV Report, ibid.; IMF 2017. Mauritius 2017 Article IV Report, ibid.
[7] IMF 2019. Mauritius 2019 Article IV Report, ibid.
[8] IMF 2019. Mauritius 2019 Article IV Report, ibid.
[9] IMF 2019. Mauritius 2019 Article IV Report, ibid.; IMF 2017. Mauritius 2017 Article IV Report, ibid.
[10] IMF 2019. Mauritius 2019 Article IV Report, ibid.; IMF 2017. Mauritius 2017 Article IV Report, ibid.
[11] UNCTAD 2019. UNCTADStat Database, ibid.
[12] IMF 2019. Mauritius 2019 Article IV Report, ibid.
[13] IMF 2019. Mauritius 2019 Article IV Report, ibid.
[14] UNCTAD 2019. UNCTADStat Database, ibid.
[15] UNCTAD 2019. UNCTADStat Database, ibid.
[16] UNCTAD 2019. UNCTADStat Database, ibid.
[17] UNCTAD 2019. UNCTADStat Database, ibid.
[18] UNCTAD 2019. UNCTADStat Database, ibid.
[19] UNCTAD 2019. UNCTADStat Database, ibid.
[20] UNCTAD 2019. UNCTADStat Database, ibid.
[21] UNCTAD 2019. UNCTADStat Database, ibid.
[22] UNCTAD 2019. UNCTADStat Database, ibid.
[23] UNCTAD 2019. UNCTADStat Database, ibid.
[24] UNCTAD 2019. UNCTADStat Database, ibid.
[25] UNCTAD 2019. UNCTADStat Database, ibid.
[26] UNCTAD 2019. UNCTADStat Database, ibid.
[27] UNCTAD 2019. UNCTADStat Database, ibid.
[28] UNCTAD 2019. UNCTADStat Database, ibid.
[29] UNCTAD 2019. UNCTADStat Database, ibid.
[30] UNCTAD 2019. UNCTADStat Database, ibid.
[31] UNCTAD 2019. UNCTADStat Database, ibid.
[32] UNCTAD 2019. UNCTADStat Database, ibid.
