{"id":1479,"date":"2023-10-26T10:46:44","date_gmt":"2023-10-26T10:46:44","guid":{"rendered":"https:\/\/www.innov8fs.co.za\/blog\/?p=1479"},"modified":"2026-03-18T11:46:24","modified_gmt":"2026-03-18T11:46:24","slug":"how-mauritians-became-richer-than-south-africans","status":"publish","type":"post","link":"https:\/\/www.innov8fs.co.za\/blog\/2023\/10\/26\/how-mauritians-became-richer-than-south-africans\/","title":{"rendered":"How Mauritians became richer than South Africans"},"content":{"rendered":"

\"\"<\/p>\n

Mauritius\u2019 gross domestic product (GDP) per capita is much higher than South Africa\u2019s, which shows the value of business-friendly policies and low taxes.<\/p>\n

Mauritius is a small island state off the southeast coast of Africa with a population of 1.3 million and few natural resources.<\/p>\n

Despite its location and size, the country\u2019s economy has shown tremendous growth over the last few decades, making it an upper-middle-income economy.<\/p>\n

It raises the question of why Mauritius excelled while South Africa has been moving in the opposite direction over the last decade.<\/p>\n

The main reason is that Mauritius\u2019 business-friendly policies, stable political environment, and low tax rates make it attractive for businesses to set up shop on the island.<\/p>\n

The business-friendly environment results from the Mauritian government\u2019s drive to grow the services sector of the economy.<\/p>\n

Mauritius implemented a prudent development plan backed by political stability, solid institutional frameworks, and low levels of corruption.<\/p>\n

The government slashed taxes to a maximum of 15% for individuals and companies. In some instances, taxes as low as 3% are possible.<\/p>\n

There are also no capital gains taxes, no dividend taxes, no donation duties and no exchange controls in Mauritius.<\/p>\n

The development plans worked exceptionally well. Mauritius\u2019 economic growth rate far outpaced its peers in Southern Africa.<\/p>\n

South Africa, in comparison, created a hostile business environment with high taxes, onerous requirements like BEE and affirmative action, and failing infrastructure.<\/p>\n

Many large South African businesses have headquarters in Mauritius because of the more business-friendly environment.<\/p>\n

Money has been flooding out of South Africa as businesses and individuals look to safeguard their wealth against the government.<\/p>\n

International investors are also dumping the country. The JSE\u2019s latest data showed a R103 billion net sale of shares from foreign traders in 2023.<\/p>\n

The differences between the South African and Mauritian economies are clearly illustrated by the GDP per capita over the last three decades.<\/p>\n

Between 1996 and 2011, South Africa and Mauritius\u2019 GDP per capita in US dollars essentially tracked each other.<\/p>\n

However, over the last decade, South Africa\u2019s GDP per capita declined while Mauritius performed much better.<\/p>\n

It created a growing gap between the two countries, illustrated in the chart below.<\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

Mauritius\u2019 gross domestic product (GDP) per capita is much higher than South Africa\u2019s, which shows the value of business-friendly policies and low taxes. Mauritius is…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1479","post","type-post","status-publish","format-standard","hentry","category-innov8ions"],"_links":{"self":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/1479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/comments?post=1479"}],"version-history":[{"count":1,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/1479\/revisions"}],"predecessor-version":[{"id":1482,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/1479\/revisions\/1482"}],"wp:attachment":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/media?parent=1479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/categories?post=1479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/tags?post=1479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}