The Finance Minister, Dr the Honourable Renganaden Padayachy, has delivered his maiden Budget Speech, in an unprecedented economic and social environment marked by limited visibility and livelihood challenges. He has charted an ambitious project for the Mauritian economy to bounce back from the COVID-19 crisis, with a key role for construction activities, while maintaining due focus on inclusiveness and social cohesion.
The authorities have been pursuing a number of so-called unconventional policies to support corporates as well as workers. They have also approached international institutions for financial assistance, to counter expected severe economic contraction. With a view to safeguard financial stability and promote economic development the Bank of Mauritius (BOM) has since the start of the crisis, announced several measures − the latest being a USD 2 billion fund targeting investment in systemic corporates and a MUR 60 billion contribution to the government. Financing of the latter would be through issue of BOM securities on the domestic market and may, by mopping up excess liquidity of nearly MUR 50 billion, at least partially reconnect remarkably low market yields to the Key Repo Rate (KRR). Importantly, these two specific initiatives have the potential to be game changers in the prevailing circumstances, provided the right infrastructure and mechanism are set up for operationalisation, performance assessment, and governance.