The Bank of Mauritius Saga: Power, Politics, and the Limits of Authority

Editorial

The recent developments at the Bank of Mauritius (BoM) highlight both institutional challenges and the delicate balance of political authority within the current government. At the centre of the storm are Prime Minister Navin Ramgoolam, his deputy Paul Bérenger, the Governor of the central bank Rama Sithanen, and the now-departed Second Deputy Governor Gérard Sanspeur. What might at first appear to be a purely internal dispute within the BoM has, in fact, revealed much more: the enduring tension between political authority and institutional autonomy, and the subtle chess game between the two heavyweights who lead the governing Alliance du Changement.

The proximate cause of the crisis was Sanspeur’s dismissal, confirmed today, Friday 29 August after he announced that the Prime Minister had asked him to resign. Sanspeur, never one to leave quietly, revealed at his press conference that he held a “compromising audio recording” of Governor Sithanen, suggesting that if released, it would leave Sithanen with no choice but to resign. The allegation was explosive enough, but Sanspeur went further, accusing the Governor of lying and of tampering with minutes of meetings at the central bank.

This was no mere bureaucratic spat. For weeks, speculation had mounted about an open rift between Sithanen and Sanspeur. The Prime Minister, visibly disturbed by the breakdown, publicly described the situation as “unacceptable.” Yet his ultimate decision was not to remove the Governor — who is himself a former Finance Minister — but instead to cut loose Sanspeur. In doing so, Ramgoolam signalled clearly that he would not be pressured into sacrificing a figure he might regard as too valuable, especially not on the public urging of his deputy.

The Bérenger Factor

Paul Bérenger, never shy of confronting allies in public, had urged Ramgoolam to dismiss Sithanen. That choice of strategy proved decisive. Ramgoolam has long abhorred attempts at public pressure, particularly when they come from within his own camp. Those close to him were not surprised that he resisted. By asking Sanspeur to step down instead, the Prime Minister reminded both his Cabinet and the wider political establishment that he remains captain of the ship.

This move, however, does not resolve the deeper question: how will Bérenger react? The Deputy Prime Minister has invested political capital in criticising Sithanen and calling for change at the BoM. His authority within the Alliance du Changement risks being undermined if he is seen to have been overruled. For now, he faces a choice between escalation, which could destabilise the alliance, and restraint, which might project weakness.

The Unresolved Controversies

Even with Sanspeur’s departure, the central bank remains beset by multiple unresolved controversies:
– The Menlo Park affair, tied to Pulse Analytics and its director Stéphane Adam, has raised allegations of political collusion, financial mismanagement, and dubious loans from the Mauritius Investment Corporation (MIC).
– MIC’s broader portfolio of loans to distressed firms continues to cast a shadow, with accusations of bad loans and politically motivated decisions.
– The suspension of the BoM trade union president has been denounced as illegal by the Labour Minister Reza Uteem, further eroding trust in the institution’s handling of internal dissent.
– Sithanen’s dual chairmanship of both the BoM and the Financial Services Commission raises questions about concentration of power and conflict of interest.
– The blocking of Manou Bheenick’s nomination as chairman of the State Bank of Mauritius on “fit and proper” grounds reflects an unresolved institutional tug-of-war.

These issues are not technical details but core concerns about governance, transparency, and accountability. Leaving them unresolved for too long risks undermining public confidence not only in the central bank but also in the government’s economic stewardship.

The governor himself has been under scrutiny. He has denied any wrongdoing in relation to Pulse Analytics, dismissing allegations of collusion with Stéphane Adam as “harassment.” He admits to having met Adam but maintains that those encounters were innocuous and unrelated to his appointment. Moreover, Sithanen’s attempts at rebuttal have not silenced critics. Stéphane Adam, in turn, has confirmed at least one meeting with him, contradicting Sithanen’s efforts to minimize their ties. The public is left with a classic case of conflicting accounts, which deepens uncertainty rather than resolves it. Against this backdrop, Sanspeur’s claim of holding an incriminating audio recording is all the more destabilizing.

Ramgoolam’s Calculus

The Prime Minister’s calculus appears clear: in his eyes, Sithanen’s expertise and political experience may outweigh the risks, despite the controversies. Sanspeur, though combative and occasionally useful as a counterweight, was ultimately expendable. Ramgoolam’s decision to protect the Governor while cutting off the deputy is thus less about the central bank’s integrity and more about maintaining political equilibrium on his own terms.

The message to Bérenger could not be clearer: the Prime Minister will not be dictated to, not in public, and certainly not on a matter as sensitive as the leadership of the BoM. But this stance comes with costs. By allowing controversies to fester, Ramgoolam risks a slow drip of scandal that could erode both institutional credibility and his own government’s standing.

At its heart, this saga raises fundamental questions about institutional independence. The central bank of any country is expected to stand above partisan struggles, safeguarding monetary stability and the financial system. When its top officials are embroiled in personal feuds, political intrigue, and allegations of manipulation, the credibility of the institution suffers.

The fact that the Prime Minister could so directly intervene to secure Sanspeur’s dismissal underlines how blurred the lines have become between political authority and institutional independence. While political oversight is inevitable in a small country like Mauritius, the danger lies in the perception that decisions are being driven by political expediency rather than by the best interests of the economy.

Bérenger’s Next Move

Attention now turns to Bérenger. Will he choose to bide his time, perhaps extracting concessions elsewhere in government policy, or will he push harder, risking open confrontation? His long political career suggests a keen instinct for timing. He may decide that provoking a crisis now, so soon into the life of the Alliance du Changement, is unwise. But he will not simply retreat quietly. How he recalibrates his position in the weeks ahead may well determine the future stability of the governing alliance.

The dismissal of Gérard Sanspeur may have brought temporary calm, but it has not solved the deeper problems. The Bank of Mauritius remains mired in controversy, its leadership questioned, and its independence compromised. Prime Minister Ramgoolam has asserted his authority, but at the cost of postponing hard decisions on unresolved issues.

For Mauritius, the stakes are high. At a time when global economic headwinds threaten growth, and when investor confidence depends on credible institutions, the last thing the country can afford is prolonged uncertainty at the very heart of its financial system. Political manoeuvring may settle scores in the short term, but unless the underlying issues at the BoM are addressed decisively and transparently, the credibility of both the institution and the government itself will continue to erode.

The Prime Minister may believe he has time on his side, but time has a way of magnifying, rather than diminishing, institutional crises. How Navin Ramgoolam and Paul Bérenger manage this crisis will not only determine the fate of Rama Sithanen and the central bank, but also the stability of the Alliance du Changement and the broader trust of the Mauritian public in its institutions.

Mauritius Times ePaper Friday 29 August 2025