A hybrid system combining English law and French law
Mauritius prides itself on having a strong model of adherence to the rule of law (ranking 1 from 2020 among the leaders of the African continent), and of being a beacon of access to justice. In addition to the principle of an intrinsic adherence to the rule of law, Mauritius benefits from a strong judicial system with the particularity of its final court of appeal being the Judicial Committee of the Privy Council which sits in London, UK.
In order to remain one of the “fastest growing” 2 economies in sub-Saharan Africa, the consistent economic trend has been for Mauritius to rely vitally on its service sector to support its economy. Its strategic geographical location in the Indian Ocean has allowed diversification far beyond the tourism sector.
Indeed, its financial services and offshore business sector openly represents a significant contribution to GDP, with far-reaching prospects in Asia. Indispensable, the legal sector and its players remain an immediate driver of the growth of the country’s financial services.
In general, the AfCFTA which is part of Agenda 2063 is presented in an ambitious way by the African Union as part of its flagship project for the next 50 years in order to defend the principles of rules-based governance and achieve more sustainable growth of the continent on a global scale for both goods3 and services. From the perspective of Mauritius’ economic development, “… we hope that the implementation of the Free Trade Agreement will bring new impetus to the region. It will create an African single market with a total GDP of $ 3 trillion. … The elimination of tariff barriers, the standardization of new processes will be beneficial for Mauritian exports. These products will have a competitive edge and a diverse African market. This will stimulate Mauritian exports to Africa, which represents only 20% of total annual exports… ”4
The representation of inclusiveness envisioned is to “stimulate intra-African trade by providing a comprehensive and mutually beneficial trade agreement between member states, covering trade in goods and services, investment, intellectual property rights and competition policy. “5
The rhetoric echoes the same opportunities that have been transformed into economic growth offered to Mauritius by similar types of multilateral agreements; and DTAs which are often enforceable with generous tax relief eligibility gateways, as partially listed below:
• Generalized System of Preferences (GSP),
• Africa Growth and Opportunities Act (AGOA),
• Southern African Development Community (SADC),
• Common Market for Eastern and Southern Africa (COMESA),
• Indian Ocean Rim Association (IORA),
• Indian Ocean Commission (IOC), EU Economic Partnership Agreement (EU-EPA),
Contextually, and in addition to the ease of doing business, the imprint of Mauritius’ existing trade agreements with countries such as the United States, China, India and Turkey has remained. Certainly, the opportunities for foreign business ideas channeled through Mauritius continue to be an incentive worth exploring. In view of the AfCFTA, it is relevant that Mauritius does not impose any restrictions on foreign ownership of companies, so that a company incorporated under the national laws of Mauritius is allowed to have a stake of 100 %. The same incentive applies to several aspects of the existing national tax regime, which aims to attract various types of international investors. For example, since Mauritian laws do not withhold withholding tax on dividends, capital gains from non-resident entities, and estates, Mauritius has the potential to attract more investment in Africa without hampering the ability of other African countries to collect their own income.
When the AfCFTA came into effect in Mauritius on January 1, 2021, the landscape of economic depression had grown to such an extent that all expectations were thwarted by the effects of the COVID-19 pandemic. At the time of ratification, it could not be expected that Mauritius, like many countries around the world, would face the financial burden of what would be consecutive periods of national lockdowns.
This has only been exacerbated by border restrictions in Mauritius which have resulted in a complete drop in visitor traffic to the island. Coupled with the impossibility of an absolute shift to remote work in the manufacturing sectors of the economy, the circumstances of the entry into force of the AfCFTA will almost certainly not give the desired result to date. The shutdown caused by the pandemic meant that companies operating from Mauritius to Africa offering services oriented towards import and export, processing, manufacturing and the free port sector generally suffered the same unfavorable fate. , many companies being forced to liquidate. The consequence is a feeling of uncertainty and gloom which in turn triggers an excessively risk averse attitude towards investing. This is ultimately symptomatic of the resulting increase in unemployment.
At this stage, the immediate aspirations for an abundant influx of commercial activities generated around the AfCFTA are therefore unfortunately to be considered as delayed. This does not mean, however, that economic operators 6 have lost sight of the formidable attributes of integration which the AfCFTA represents and which is very necessary. For example, it is expected over a prescribed period of five years that the removal of tariffs on 90% of goods “will boost intra-continental trade by 52% per year”. 7
Finally, the AfCFTA anticipated that there might be a fear that states actually prefer to opt for a “tendency to protect their own interests”. 8 Any form of abuse of a treaty or dispute shall be dealt with in accordance with the customary rules of public international law by the dispute settlement mechanism established under Article 6 of the Protocol on the Rules and Procedure for the Settlement of Disputes . The additional level of scrutiny provided by the Appellate Body to a dissatisfied party is intended to promote fairness in a speedy manner. By adding the layer of an appeal process, greater transparency is achieved in the dispute resolution process. Alternatively, states can mutually opt for arbitration.
To conclude, the incorporation of a dispute settlement mechanism into the AfCFTA makes the instrument comprehensive and capable of consistently promoting the incentive for cooperation in Africa and resolving disputes as they arise. arise. Mauritius and the States participating in the AfCFTA stand to gain from making the appropriate changes in their economic policies, so that trade in the African region becomes the priority of their national agenda. Only time will tell if the cultural disparities between African countries can be triumphantly dismissed in favor of a self-sufficient and autonomous union.