Log In

Reset Password

<Bz31>Mauritius considering sale of state insurance company

MAURITIUS(Bloomberg) — Mauritius may sell stakes in several state-owned companies, including Mauritius Telecom and the State Insurance Company Ltd., and use the proceeds to retire debt or build new infrastructure, Finance Minister Rama Sithanen said."As part of its policy to develop the equity market and to widen and democratise share ownership, government will encourage Mauritius Telecom and Sicom Ltd. to be listed on the Stock Exchange of Mauritius," Sithanen said in his budget speech last Friday, which was published on his ministry's Internet site. "In the same vein, government will sell some of its shares in other state-owned companies."

The Indian Ocean island's government has been trying to reposition the economy and make it more competitive after changes to global trading terms and rules slashed earnings from sugar and textiles, its main exports. The economic growth rate for the fiscal year that ends June 30 will probably rise to almost 5.5 percent, from almost five percent in the prior 12 months.

"The signs of economic growth are vivid," Sithanen said. "Growth is on a rising path. Foreign direct investment is flowing in at an unprecedented rapid pace. The textile industry is no longer in recession. Construction and tourism are booming."

Last year, Mauritius attracted about 7.2 billion rupees ($231 million) in foreign direct investment, more than the cumulative total for the prior four years. This year the government anticipates attracting investment worth 10 billion rupees.

Sithanen projected a fiscal deficit of 3.8 percent from fiscal 2008, down from 4.3 percent the year before. Higher oil prices and the depreciation of the rupee are expected to push the average inflation rate to 10.7 percent in the year than ends June 30, from 5.1 percent the year before, he said.

The government expects inflation to fall in fiscal 2008 and will set up a new competition regulator this year to encourage competition and bring down prices. It also plans to review its labour laws with a view to reducing input costs.

The fiscal 2008 budget allocates 7.5 billion rupees toward building new infrastructure, a fifth more than the previous year. A new airport terminal will be constructed at a cost of four billion rupees, while 752 million rupees will be spent on road projects, 201 million rupees on electricity projects and 208 million rupees on improving the water supply.