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Insight

Africa & India 2021 outlook

Insight 3 February 2021

Africa & India 2021 outlook

Recovery on the horizon in India and Africa

2020 was a very profound year. We faced a new disruption which will go down in history as the pandemic that took a huge strain on all people, businesses and the global economy. However, the future looks brighter.

Dr Rama Sithanen, Chairman of Sanne Mauritius comments:

With the roll out of several vaccines across continents, we expect a recovery in investment activities across India and Africa in 2021. Private equity will unlock great opportunities as the pandemic retreats and countries continue to open. While economic conditions improve, the business environment will become more conducive and reforms will be accelerated. Growth will be robust not only in Covid resilient sectors such as information technology, digital, internet and financial services, electronic payments and health care but also in priority sectors such as infrastructure, real estate, manufacturing, agrobusiness, education and insurance that will be key drivers of economic reconstruction and recovery.”

Dr Rama Sithanen
Chairman of Sanne Mauritius

Rubina Toorawa, Head of Sanne Mauritius, sees a possible return to normality as from the second half of the year:

Economic growth is hard to predict even in a normal year; infinitely harder with a pandemic still raging. The availability of effective vaccines has brought hope that the global economy can expect to return to normality, potentially in Q3 of 2021 and on the basis that any mutation remains under control. India, by far the largest producer and provider of COVID-19 vaccines globally, one of Sanne’s main market, has started to bounce back, recovery momentum is expected to continue with a forecast to be the fastest growing Asian economy in 2021, pegging it to grow at a median of 9%. Some more bullish in the debt market would suggest a growth as high as 13%. The Mauritius IFC, in the face of challenges, continues with high resolve and determination to address the remaining OECD recommendations and positioning itself to capture expected opportunities resulting from optimistic investor sentiment. At Sanne, we remain focused on cost efficient solutions and high quality deliverables. We keep moving in the face of change and challenges and have aligned to our business partners’ needs and are geared up to the opportunities coming in 2021 in the Asian and African market.”

Rubina Toorawa
Head of Sanne Mauritius

On the Private Equity Market, Rama remains positive:

The disruptions have been a good time for the private equity industry to revisit and build better portfolios. Both India and Africa will remain very attractive markets for the global private equity industry and they will also continue to be fast growing economies over the next decade. DFI’s and institutional players will likely play a leading role in mobilising funds and also in increasing direct investments and mobilising third party capital. As a major platform for cross border investments into India and Africa, Mauritius will redouble its efforts to sharpen its competitiveness and enhance its attractiveness for private equity and institutional players looking for an efficient and an effective international financial centre of substance and repute to conduct their businesses.”

Rama Sithanen
Chairman of Sanne Mauritius

Mauritius, as an IFC of choice for the African Market

From a regulatory perspective, Yash Beeharee, Director Compliance and Control at Sanne is confident that Mauritius is in a good position to make it out of the EU blacklist this year:

2020 was challenging. Mauritius was classified by the FATF under its ‘Grey list’ of jurisdictions under increased monitoring, causing the European Commission to add Mauritius to its list of jurisdictions having strategic deficiencies in their AML/CFT regimes. However, the local authorities left no stone unturned to bring out the jurisdiction from these lists with several changes in the local AML/CFT legislations and regulations, increased supervision and inspections by local regulatory bodies, taking enforcement actions against defaulters where required and increasing sensitisation through outreach programmes. Following progress reports submitted to the FATF by the authorities, we expect that Mauritius will have a chance to present its case at the next FATF plenary session in February and make its way out of the 'Grey list'. We understand that following removal from the FATF ‘Grey list’, Mauritius will also be removed from the EU list within a given period of time. At Sanne, we look forward to what 2021 holds for Mauritius as we are determined to bring the country back to its correct position and reflect the tremendous amount of work that both authorities and industry operators have achieved within a short span of time to not only reinforce our AML/CFT Framework but bring more effectiveness in implementation of related measures”

Yash Beeharee
Director Compliance and Control at Sanne Mauritius

Varounen Goinden, Director and Head of Business Development for Mauritius and India sees Mauritius as an IFC of choice for the African continent:

Looking back, 2020 has marked a series of in-depth reforms throughout the Mauritius IFC to further strengthen the status of Mauritius as the platform of choice for the African continent. With the expected retreat of the pandemic in the coming year, we are confident that there would be an uptick in the level of investment activities by the global VC-PE players throughout the high-growth countries on the continent with a focus on fintech and e-commerce related activities and tech-oriented enterprises. With a strengthened ecosystem and renewed confidence from investors, Mauritius is well poised to remain an essential element to the foreign fund flows onto the continent in the forthcoming years.”

Varounen Goinden
Director and Head of Business Development ‑ Mauritius & India

An outlook on India for 2021

Khushboo Chopra, Head of Business Development, India comments:

2021 could be a big year for India. The Indian Government has been speeding up decisions and easing existing processes which is considered a step-up for India to attract a lot of interest globally and bringing India more in line with competing financial centres. As seen in as early as January 2021, several multinational fund houses have been studying scenarios to move their subsidiaries to GIFT city. Financial technology has become a new conviction, even the Government is providing a strong push for financial inclusions and digitization with the introduction of policies and new initiatives. 2020 is fairly considered as the year of crisis and opportunities for multiple Indian Sectors. Irrespective of the global slowdown and the Covid-19 pandemic, FDI Into India recorded a significant jump. The high growth story will go well in India as attracting foreign flows has been sounded from the top. A strong pitch is given by the Prime Minister to foreign companies to take advantage of the stable tax regime and attractive FDI policies into India. 2020 saw a significant amount of FDI coming through the Mauritius, Singapore, US, Netherlands, Japan and UK routes with big investors also coming from Germany, Cyprus, France & Cayman Islands, and we expect to see even more coming in this year.”

Khushboo Chopra
Head of Business Development, India