“Despite the previous regime’s gross incompetence and irresponsibility, we must move past this political ping-pong narrative”

Interview: Nita Deerpalsing

* ‘We just cannot allow anyone to use this Constitutional Review commission to become a colorable device…’

* ‘We are totally ill-equipped to cushion external shocks which are bound to happen time and time again’

In this incisive interview, former MP and vocal commentator Nita Deerpalsing cuts through the political noise and official growth optimism. Moving past the predictable “political ping-pong” between successive regimes, she challenges the current administration’s progress on its promises of change. From stagnation in local food production and the lack of concrete economic diplomacy to the lingering opacities of the Mauritius Investment Corporation (MIC), Nita Deerpalsing argues that the nation’s consumption-driven, rent-seeking economic model leaves it completely ill-equipped to weather inevitable external storms. Turning her attention to the upcoming budget and proposed constitutional reforms, she exposes policy contradictions and sounds a fierce warning over a proposed electoral college for the Presidency, sniffing out a potential “anguille sous roche” (something fishy) that recalls the rejected constitutional overhauls of 2014. Read on for a candid, no-holds-barred assessment of public procurement, the Mauritian brain drain, and why true constitutional reform must belong to the people, not a selective elite.

Mauritius Times: The Bank of Mauritius recently raised its inflation forecast for 2026 to 5.5% and increased interest rates to 4.75%, citing external shocks such as geopolitical tensions and rising energy costs. Do you see this inflation mainly as temporary external pressure, or does it reflect a deeper structural vulnerability in Mauritius’ import- and consumption-driven model?

Nita Deerpalsing: The geopolitical tensions and accompanying rise in energy prices definitely represent a significant trigger leading to this hike in repo rate. However, this also exacerbates our pre-existing structural weakness. Therefore, each time we have external shocks like these, our deep-seated structural problems will again and again come to the fore.

What is that deep-seated structural vulnerability from which we suffer and will continue to suffer if this is not addressed? It is that we import almost everything – we have no significant productive manufacturing nor commodity exports that could help to somewhat weather the storms when they come. It means we are totally ill-equipped to cushion external shocks which are bound to happen time and time again.

Thus, while from a purely technical perspective this increase in the repo rate was pretty much inevitable, the larger question must remain: what have we been doing in the last 18 months to address this structural problem?

True it is that no one in their right mind can dispute that the previous regime was highly irresponsible or incompetent – or both – in managing the economy. Other than tourism and financial services, they were betting in an exaggerated manner on consumption, consumption, consumption… So, they thought they would get political popularity by flooding the system with all kinds of cash allocations, an increase in pensions which defies responsible common sense, they didn’t increase the repo rate when it should have been etc. On top of all this, we had the mess with that creature called the MIC and the printing of money.

However, you will note that even 18 months past the new regime being in place, this MIC mess has still not been sorted out. Many questions remain about just why some companies have, or are being spared, why investigations seem to be selective. Why not a full-fledged forensic audit so far? In the absence of answers to these questions, we can only speculate…

Despite the sheer irresponsibility and incompetence of the previous regime, we cannot continue with a political ping pong narrative. 18 months down the line, what exactly are the actions taken to address the deep-seated structural issues?

According to some professionals, the spread between the Bank of Mauritius rates and the Fed Reserve rate is still too low to prevent hoarding of foreign currency and hence to shield the rupee from further depreciation. It is to be hoped that beyond inflation targeting, this issue is also addressed going forward.

* On the other hand, although the government highlights post-pandemic recovery, institutions like the World Bank expect growth to slow to around 2.5%–2.8% in 2026. What structural constraints — such as labour shortages and weak private investment — are holding back long-term growth despite sustained public spending?

Well, we apparently have a top-notch guy who is supposed to be providing ingenious solutions. We are paying an Economic Advisor at the PMO for 15 months of salary annually for what output exactly?

Where is the plan to revamp local production? Where is the plan for food security? All we have heard of are “Assises” of this and that. Where is the implementation plan of all the ideas generated? I would remind you that an implementation plan involves a timeline. Have we seen anything like that?

Unfortunately, today, the biggest disappointment comes from the Ministry of Agriculture. I simply cannot understand the lethargy and lack of bold, dynamic action from that ministry. Other than photo-shoot opportunities, there is little to write home about. Blue economy has turned into something that provides a lot of fodder for speeches, talk, talk, talk and more talk. Where is any concrete, tangible action?

Now on other possibilities for local production. I recently saw an article whereby Jetour which is a Chinese vehicle manufacturer was setting up a production facility in South Africa. They plan to create 3,000 jobs and up to 50,000 vehicles annually for the African market. Is there any reason why as we do a lot of chest thumping about our relationship with India, we cannot do something similar here? Where is our economic diplomacy?

* As regards our energy needs, Mauritius remains heavily dependent on imported energy, making it vulnerable to global price shocks. What major structural shift would you prioritise to strengthen long-term economic resilience over the next decade?

Since last year, even before the crisis if there was truly a patriotic vision for energy security, one would have expected a massive initiative in favour of widespread installation of solar photovolataic. We can only hope that this year’s budget will come up with effective measures to encourage and incentivize a widespread implementation of PV solar installations countrywide.

I speak of a patriotic long-term vision because some cynics say that there will be no incentive to curtail the decrease in petrol imports because all the taxes on petroleum products actually brings in significant revenue!

And I sure hope that this budget will correct the mistake that was made last year regarding hybrid and electric vehicles. On the latter, it would be wise to link solar PV production with the purchase of electric vehicles because there is no point giving incentives to favour electric vehicles if the electricity needed to power these vehicles comes from heavy fuel oil production!

So I would expect the budget to contain measures that will encourage less imported fuel consumption both via Hybrid vehicles and Electric vehicles which would have to be linked to the owner’s own solar PV production. But note that I am not talking of high-end luxury vehicles. If someone has enough disposable income to buy those high-end luxury vehicles, they should pay their fair share of taxes and not benefit from same tax exemptions as everyone else.

I also hope they will correct a terribly unjust anomaly. Do you know that today, someone who buys a luxury vehicle like a Porsche or some other high-end vehicle pays the electricity used to power the Porsche at a lower price than a child from a poor family using electricity to study at night? Where is the sense in that? This was introduced by the previous government together with the incredible refund of Rs 200,000 if one were to buy an electric vehicle! Any electric vehicle – even a high-end luxury vehicle!

I mean honestly, I don’t know what kind of twisted mind can come up with such a policy measure. So, someone from the previous regime thought that if you were to buy an electric Porsche or other high-end vehicle, not only you don’t pay duty, etc., but on top of this, the State – that is the people of Mauritius – should refund you Rs 200,000! I think that was taken out last year, if it hasn’t it should be. Along with that there is the differential in the price of electricity paid by a Porsche owner and a student from a poor family which must be scrapped!

* Public debt remains close to 90% of GDP, while credit rating agencies have warned about fiscal sustainability. How much fiscal space does the government realistically have in the next budget before risking a downgrade?

As many professionals have pointed out, the Moody’s scare has been over exaggerated. What the government should do is to publish exactly how much of our debt is Government to Government debt and how much are commercial debts. That would be a good starting point to have a serious public conversation about the inherent risks in our debt portfolio.

Also, debt in itself may not be a problem per se. The problem is what exactly have we used all this debt for? What enhancement in their day-to-day lives have citizens experienced as a result of this debt burden? Do we have better public hospitals? Do we have better public education? Do we have better public roads?

Today there are people who are undergoing cancer treatment who are waiting months on end to have a CT Scan because there are only a few machines still functioning. So what exactly has the previous regime done with all the debt we have taken?

What is being done by this government to ensure that we have quality control on every single purchase we make? We all know that recurring road works are because there is a lack of quality control and that in fact there is inbuilt into the system some kind of programmed breakdown so that people get repeated contracts. This is the way corruption thrives in this country. Nothing quite illegal because all these contracts – for purchase of hospital equipment, for the purchase of ‘bitume’, etc., go through “proper” tender processes. But do we have any studies showing the lifespan of all the things we buy compared to the lifespan of the same equipment in other countries?

Do we need Moody’s blessing to have a public access to information policy? Why is all the opacity still intact 18 months after we voted for ‘Change’? Does that give you any hope that things will indeed change in matters of public procurement? When will we just copy-paste what Rwanda has done in public procurement? Rwanda has introduced blockchain technology in public procurement to ensure that there is a minimal chance of corruption for public tendering exercises

* The government aims to reduce debt while also protecting living standards and expanding social support. Can these two objectives realistically be achieved simultaneously, or does one inevitably have to be compromised?

As I mentioned before, we cannot just look at one side of the balance sheet! When are we going to take action to increase revenue by revamping local production and exports? Where is at the very least even a timid plan for this? Unless we have some bold ideas about increasing the revenue side, we will keep talking about the expenses side. Debt is always as a percentage of GDP. If you have ideas to increase the GDP, the debt becomes less of a burden.

* With the Central Bank tightening monetary policy to control inflation while government spending pressures remain high, are monetary and fiscal policies working at cross-purposes? How should they be better aligned?

Let us take the increase in the repo rate. This will de facto cause even more pressure on the average household because households are highly indebted. While the repo rate hike was practically inevitable, there are policy issues that can be taken to soften the blow. For example, should there be a cap on onerous banking transactions? We know the banking sector is making super-profits. Should they continue to mint money on every single customer service request in an environment where everyone will feel the pain of the repo rate increase?

While the repo rate increase was technically unavoidable, we must keep in mind that in a country of heavily indebted households, it is a very risky bet. If the dose of the medicine in the form of the repo rate increase is too high, this may backfire because this tool used by the BoM to control inflation could actually trigger a recession precisely because of heavy indebtedness of Mauritian households.

This is where fiscal policy needs to at least attempt to rebalance and provide some breathing room. In a country with dire statistics such as 80% of people having up to only Rs 100,000 in a bank account together with a worrisome household debt profile, it is necessary to find ways and means to soften the blow on the average household.

* Recent tax reforms, including tiered taxation and corporate “fair share” contributions, aim to increase revenue. Are these measures sustainable and equitable, or do they risk discouraging investment and capital formation?

On evidence, the big corporates are doing more than well. They are generating super profits. They are therefore well shielded and less sensitive to interest rate increases than the average citizen. They also, unfortunately, enjoy the power of policy capture. Which is why we saw the U-turn on the infamous “fair share” contribution last year. We will have to see in this budget if the power of the policy-capture lot is still greater than the power of the elected officials to make policy.

As for the argument regarding “discouraging investment and capital formation”, that may have stood a leg in a purely capitalist economy. However, this argument doesn’t even stand scrutiny in a rent-seeking economic model.

* Despite long-standing policy goals, Mauritius remains heavily reliant on tourism and financial services, while sectors like ICT, manufacturing, and the blue economy lag behind. Why has diversification remained so difficult to achieve in practice?

Don’t you have the impression that the policy making machine in this country has been clogged for at least a few decades now? Perhaps it is because the rent-seekers are wielding policy making power over and above what the people express in the ballot box?

* Mauritius is facing both labour shortages requiring foreign workers and a significant brain drain of skilled youth. Why has the economy struggled to generate enough high-value jobs — particularly in emerging sectors like AI and fintech — to retain local talent?

Leadership is always by example! Do you have the feeling we are living in a country of exemplary leadership?

Why do we have so many of our middle class educated professionals fleeing to countries like Canada, Australia or Luxembourg? Because once again, despite all the beautiful speeches we hear at the Laureates ceremonies, the fact is that the middle class educated professionals have a diminishing faith in the possibility of living a decent life, having a decent job, climbing the professional ladder without any political connections.

When you see the signal given by an advisor at the PMO who also happened to obtain the sought-for by-catch fish contract, this is in itself a “leadership” signal which goes the wrong way and completely destroys all those beautiful speeches. And you will notice that despite all the noise that was made, has anything been done? Any corrective action taken? No, no.

It’s almost as if you can hear someone say: Make as much noise as you want, I will continue to operate in this manner. That in itself tells you a lot about the quality of leadership we have.

* One last question. The government’s proposed constitutional reforms introduce welcome democratic updates in relation to party funding, electoral disclosure, etc. From an objective standpoint, how do we ensure these changes genuinely strengthen checks and balances, and what safeguards are needed to keep the final reform package free from political influence?

I do not believe for one second that this government will do anything concrete about political financing. The proof of the pudding is in the eating. Do you have any confidence that these things called ‘baz’ will be legally abolished?

The greater worry comes from these few lines about setting up an electoral college to elect the President? This was indeed in the Government programme. But has anyone heard of this during the 2024 electoral campaign? Was such an important change presented to the electorate during the electoral campaign? Therefore, the question that arises is: did we vote for this important and fundamental change? Or was this surreptitiously slipped into the Government programme *after* the elections?

Why in the first place is there any need for an electoral college to elect the President? Why all of a sudden are we talking about the election of a President? What lies behind what is visible to the eye here? The fact that this was not in the circulated Bill, but was announced in the PM’s speech as an amendment he will bring, is already a cause for concern.

In my opinion, there is some kind of “anguille sous roche” and civil society will have to be very vigilant about what may be concocted behind the scenes.

This takes us back to the infamous attempt in 2014 for the then PM to go to Reduit as a President with more power. Which was rejected by the electorate. I hope this Consitutional Review Commission will not be a side door to try and do what failed in 2014!

In any case, as I said we will all have to be very vigilant, we simply cannot allow this change to materialize. If only because it was NEVER presented to the electorate during the campaign. Not only is it dangerous, there is no basis for such a need unless there is a hidden agenda. We just cannot allow anyone to use this Constitutional Review commission to become a colorable device for some other hidden purpose.

The other major flaw in the Bill is concerning public hearings. Despite the nice-sounding speech, it so happens that the Bill provides that “the Commission MAY hold public sittings as and when it deems necessary and MAY call on any person it desires to hear…”. These “may” doesn’t provide any guarantee that this Constitutional Review will belong to the people of Mauritius contrary to what is being touted in the speeches.

You will note from the podcast series on the “Genesis of the Mauritius Constitution” that I did with Mr Bashir Khan (see: https://www.youtube.com/@dearMoris), when the British were working towards a new Constitution for Mauritius, the British envoys actually held widespread hearings with the public in every corner of the country; where anyone who wished to depone could go and give their views.

Now almost 60 years after independence we are saying that the Constitutional Review Commission “may”…. hear whoever it “desires” to hear from? Are we to understand that they will pick and choose who gets to be heard? Why not say they “shall” conduct hearings open to any citizen who wishes to give their views? I am afraid that all of this only opens the door for speculations…

Mauritius Times ePaper Friday 29 May 2026