Why Mauritius is a Financial Services hub for Africa to Watch

By Mbwana Alliy  |  March 23, 2015


Savannah Fund’s Administrative HQ is not Nairobi, Kenya but Mauritius. And when I say Financial Services, I am NOT talking about “Financial Inclusion”, I am talking about Private Equity, Accounting, Audit, Corporate Governance and things investors care about as a “Gateway into Africa” for business. As such, the 1.2M citizens of Mauritius are obviously not a big market for an Africa startup to tap (although the GDP per capita is pretty high for an African country), but an important hub for corporate services focused on Africa that rival other centers from Johannesburg to Dubai and even London.

Last week, as part of Savannah Fund’s board meeting, I was finally able to spend some time on the Island to better understand its strengths and weaknesses.


  • Excellent Infrastructure– Ebene and its Cybercity business park has essentially become an almost accidental hub for Financial Services- Cybercity, as the name would suggest was initially meant to be an IT hub- Konza city in Kenya, should take note. Or maybe its places like Ebene, Dubai and Sandton that have inspired projects like Konza. A key hallmark of these hubs is superb infrascture- you’re not sitting in traffic all the time and you can go straight from board meeting to lunch to the airport (newly built by Chinese) in an hour.
  •  Double Taxation Agreements (DTAs) with most African Countries. Mauritius  has signed a number of tax treaties to avoid double taxation for investors coming into Africa. These also help any scaling company growing in multiple African countries, one example is Bharti-Airtel- the Africa telecom giant.
  • Most Accountants per Capita in the world points to trained labor force. Even a CTO of a startup I met had was a Chartered Financial Accountant (CFA)- to become a hub, you also need a lot of great talent specializing in something. Mauritius accounting is well accustomed to dealing with emerging markets including Africa and India.
  • Multi-ethnic and close ties to India and rest of Asia (inc. China): Mauritius has already built close ties with India and China which makes the influence a more balance South/South partnership when it comes to Africa vs a western centric view on Africa. Many investors targeting India have in past used the tax treaties to invest there and there are renewed efforts to strengthen these partnerships. Mauritius may expose more Indian investors into Africa.
  • Relative Political Stability and No.1 in Doing Business in Africa ranking: Being able to get a meeting with the Financial Services Commission in less than a day and the pace to which business happens was evident everywhere. Whilst a degree of corruption exists at the highest levels like many countries, at the business level it was highly efficient.


 Key weaknesses 

  • Distance to Africa: Its really far and expensive to get there and you might as well go to London, Dubai, Cape Town or Johannesburg which will always challenge the islands status as a financial hub to Africa. Air Mauritius needs to step up their flight links in a similar way Turkey Airlines, Emirates and even Kenya airways try act as hubs. South Africa is possibly the most affordable way to get there right now via South Africa Airlines.
  • Reputation as an offshore “Tax Haven” is increasingly scaring some traditional Development Finance Institutions to invest through there given the recent fiascoes with HSBC and even possible haven for politically exposed persons to stash their money. As such Mauritius has some of the strictest KYC/AML compliance policies anywhere- but they are there for good reason. And in past, the double taxation treaty Mauritius had with India came under scrutiny as many Indian residents were using it to stash money away. Werksman, a law firm affiliated with the African Legal Network explains in this post one comparison of investing through South Africa vs Mauritius.


What about for Startups?

A number of startups focused on Africa are starting to recognize the potential of Mauritius. BuyRentKenya, part of Africa One Media has a presence there and more recently, Sleepout relocated to Mauritius from Nairobi. There are no hubs as of yet but we can expect some to launch. The main advantages for a startup is when they become serious about pan Africa growth to optimize the tax exposure but also improve corporate governance and enhanced investor protection that they might not be able to get from their country of origin. At least one of the startups in our portfolio will be setting up Mauritius as an HQ- 3 of the startups in our portfolio have US Delaware structures due to American investor links and legal familiarity.

The newly elected government promised a focus on startups and SME sector and when I met with the Financial Services Commission, they were excited of the prospect investing more in SMEs in Africa and in Mauritius.