Jockeying for position to retain superiority
Can the South African financial services sector continue to say that it is at the forefront of innovation when it comes to comparing financial sectors across the African continent? In the past, South Africa had a reputation for excellence in this area setting the trend for many other markets.
But while South Africa has one of the most advanced financial services sectors in Africa, are we open to opportunities to grow our influence on the continent or are we merely happy with consolidating our position?
The island rising
It is interesting to ask this question when looking at growth trends coming out of Mauritius, which is fast becoming one of Africa’s fastest growing financial services sectors. News of a growing Indian and Chinese influence on the island has placed the nation firmly on the map and has opened its doors to international investors.
Mauritius has noticed this and has initiated programmes to position itself as a regional investment destination of choice when it comes to financial services. In his 2015 address, P K Kuriachen, Acting Chief Executive of the Financial Services Commission (FSC) of Mauritius (the organisation that regulates the Mauritian financial services sector), said that in 2016, the commission will play an active role in supporting the objective of policymakers to make Mauritius a regional financial centre.
“Recent trends have confirmed the potential for Mauritius to be a platform for foreign investment in Africa. Indeed, the spread of investments in global business into Africa has increased from 54.43% in 2013 to 56.91% in 2014. This momentum must be consolidated.”
While 1994 may seem long ago, one must not forget that it has only been 22 years since we truly opened our boarders to international investment. At the time, we were the regional investment hub of choice – the launch pad that international companies used as a base when expanding into Africa. If we bear in mind the fact that our unemployment rate is about 25.5%, can we afford to let another country take away our regional investment hub status?
Bring younger skills in
It is important to focus on bringing younger skills in the industry as Kuriachen openly said that the Mauritian jurisdiction needs to develop the financial services sector to create more employment for young people. This needs to be done in an innovative manner and the FSC Mauritius has possibly found a unique way for young professionals to get a taste of the industry without throwing them in the deep end.
“We cannot ignore the increasing number of captive insurers domiciled in the world, and the aim of the FSC Mauritius to position Mauritius as a captive domicile of choice,” he said, “While allowing this type of captive to continue to develop, the main objective is to attract more first party insurance captives from corporations or multinational groups from African and the Indian Ocean region. In addition, the recent Captive Insurance Act has brought international best practice to the current framework for the regulation and supervision of captive insurance business.”
Regional integration
International Monetary Fund MD Christine Lagarde recently said that tighter public spending, economic diversification and greater regional trade are needed to spur growth in central Africa; but is this not an African story? Why is it exclusive to Central Africa?
“The promotion of regional integration is an important component in the developmental strategy of our jurisdiction,” said Kuriachen, “The FSC Mauritius as a member of the Southern African Development Community Committee of Insurance, Securities and Non-banking financial Authorities (CISNA), is actively engaged in its cooperation with regional counterparts. As part of the CISNA Action Plan for the Capital Markets Sub-committee, the FSC Mauritius offered to assist member countries on the drafting of the Model Law for Small and Medium Enterprises.”
He went on to add that the FSC Mauritius will also facilitate bilateral Memorandum of Understanding between exchanges, dual and cross listing, multi-currency listing and trading in line with the CISNA's strategic plan 2016-2020.
“Going forward, we will consolidate our efforts to pursue the Commission's vision to be an internationally recognised Financial Supervisor committed to the sustained development of Mauritius as a sound and competitive Financial Services Centre. The FSC Mauritius will continue to foster a sound environment conducive to the development of the non-bank financial sector and preserve the good repute of Mauritius as an International Financial Centre of substance,” said Kuriachen.
Editor’s Thoughts:
Inspirational author Anthony J D'Angelo once said: Develop a passion for learning. If you do, you will never cease to grow. It is clear that Mauritius is learning from developed markets, but there are lessons we can learn from them to. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
