Question

Assess the development and performance of the Financial System in Mauritius?

Answer 1

Mauritius is a small multicultural developing island.Initially, Mauritius was a monoagriculture economy depedendent on sugar then gradually shifts to multi sector economy.The country has quality and sound legal, financial and educational institutions in Africa.There are various sectors in which Mauritius has diversified its economy such as tourism, textile and financial sectors.

After shifting of Mauritius economy from agriculture to industrial sector in 1970, government also tries to reduce import and promote export for economic development.With the development of export Mauritius economy flourished. The per capita income in Mauritius is highest in Africa which makes a Mauritius a stable democracy.

There is only one commercial bank in 1983 in the Financial system.But due to economic development in present situation the Financial sector comprises an increase in number of insurance companies,international banks, Non financial banking institutions and various offshore companies.

Initially, Ministry of Finance is regulatory & supervisory authority of Financial services which work under their legal framework. But due to higher wages and increased inflation rates in 1990's the economy faces many challenges in International Market, which give rise to financial sector and offshore banking in Mauritius.

At present financial structure is regulated by -

1. Bank of Mauritius- Regulate Banking Sectore

2. Financial services Commission - Regulate non banking sector such as Offshore Business, Insurance,Capital Market, Pension funds and others.