Mauritius can turn national savings into productive investment – provided borrowing is transparent, disciplined and tied to assets that strengthen the country
Ayoob Rawat
History gives us an important lesson: an empty Treasury does not necessarily mean an empty country. Some of the most important periods of national transformation began when governments had very little money available, but their countries still possessed people, skills, savings, institutions and the capacity to organise capital.
After the American War of Independence, the new United States was deeply indebted and financially weak. Alexander Hamilton did not conclude that nothing could be done. He reorganised public debt, strengthened public credit and helped create the financial institutions needed to build the new nation.
When Singapore became independent in 1965, it had few natural resources, serious unemployment, housing problems and limited financial capacity. Its leaders mobilised savings, attracted foreign capital and built strong institutions. South Korea also emerged from war desperately poor. It used domestic banking capacity and foreign credit to support industries able to produce, export and create employment.
These countries followed different paths, and none offers a perfect model for Mauritius. Their common lesson is simpler: national progress does not begin only after the Treasury is full. It begins when a country organises the resources it already has and directs them towards a clear purpose.
There are also historical examples that teach us what not to do. Germany in the 1930s used unconventional credit mechanisms, including Mefo bills, to finance public works and, increasingly, rearmament while concealing substantial liabilities. I am certainly not suggesting that Mauritius should copy Hitler’s objectives. We have no need to finance the conquest of Reunion or Madagascar, and plundering our neighbours or our own wealthy citizens would probably not do much for our international reputation either.
But behind that extreme example sits a legitimate economic question: if the Treasury has little money, must Government stop investing? I believe the answer is no.
Mauritius Is Not Poor in Capital
Government may face financial constraints, but Mauritius itself is not without capital. Citizens hold substantial savings and deposits. Pension funds, insurance companies, banks, profitable businesses and private families manage important pools of money. Mauritius can also approach international investors, development institutions and friendly countries when credible projects require larger or longer-term financing.
The challenge is therefore not simply to ask where Government can find money. The better question is how Mauritius can mobilise its financial resources to create productive national assets, while protecting savers and taxpayers from poor decisions.
Capital already exists. What is often missing is a trusted structure connecting that capital with well-prepared projects, professional management and measurable national results.
Citizens as Creditors of Their Country
We normally think of citizens as taxpayers. Why not also think of them as creditors of their country? Government could issue clearly identified Mauritius Development Bonds linked to specific productive projects rather than to general expenditure.
A citizen might invest Rs 10,000. A small business might invest
Rs 500,000. A successful company might invest Rs 10 million. Banks, pension funds, insurance companies and major Mauritian families could invest considerably more. Smaller savers could be offered accessible denominations, while larger investors could participate in longer-term issues suited to their needs.
They would not be making donations. They would be investing under clear terms, receiving an agreed return while their capital helped finance the development of their own country. The bonds could have different maturities and risk profiles, but the risks, expected returns and repayment arrangements must be stated honestly. No investment should be presented as safe merely because it carries a national label.
This approach could deepen financial citizenship. People would see not only the tax they pay, but also the energy system, water facility, training centre or productive infrastructure their savings helped to build.
More Than Creditors
For selected projects, the private sector should not simply provide money and leave Government to spend it. Those providing substantial capital should have suitable representation in the governance and oversight arrangements, without allowing private interests to capture public policy.
Government, citizens, banks, businesses, professional institutions and major Mauritian families could become economic partners in national development. Independent boards, professional managers, published accounts, clear targets and regular reporting would help ensure that capital is used for the purpose for which it was raised.
This would bring something extremely valuable into public investment: accountability to the people whose money is being used. It would also allow Mauritian financial and business experience to support project selection, procurement, execution and risk control.
Borrow Only to Build
This model must follow one fundamental rule: borrowing should finance productive investment, not simply postpone difficult financial decisions. Debt used repeatedly for salaries, subsidies, administrative costs or general consumption can become a burden on future taxpayers. Debt used for a sound asset can expand the country’s capacity to produce, save foreign exchange, earn export income and create employment.
National development capital could support renewable energy, water security, food production, transport infrastructure, affordable housing linked to economic activity, digital and artificial intelligence capability, vocational education, SME development, Blue and Green Economy projects, export industries and sensible import substitution.
Before borrowing Rs 10 billion, Government should answer five simple questions: What are we building? What will it cost? What economic or strategic value will it create? Who will be responsible for delivering it? How will the debt be serviced?
There should also be an honest assessment of currency risk, interest-rate risk, construction delays, maintenance costs and the possibility that expected revenues may not materialise. If these questions cannot be answered convincingly, the country should not borrow for that project.
A National Productive Investment Programme
Mauritius could establish a National Productive Investment Programme under which proposed projects are independently assessed before they are offered to investors. The programme should publish selection criteria, feasibility studies, expected costs, funding structures, delivery timetables and measurable outcomes.
Different projects would require different financing. Some could be funded through citizen bonds. Others might suit banks and institutional investors. Some could use public-private partnerships, while development institutions or friendly countries could co-finance projects with wider economic, environmental or social value.
The important point is that the project must come before the borrowing. We should not borrow Rs 10 billion and then decide where to spend it. We should first identify Rs 10 billion of worthwhile national investments and then determine the most suitable, affordable and transparent way of financing them.
A strong programme would also separate political approval from professional execution. Parliament and Government should establish national priorities. Independent specialists should test feasibility and value for money. Qualified managers should deliver the projects, and auditors should report publicly on the use of funds. Where a project falls behind schedule or exceeds its budget, corrective action should be taken early rather than hidden until the debt remains but the promised asset does not.
Mobilising Mauritius’ Financial Strength
Our banks already understand project finance, credit assessment and investment risk. Mauritius also has successful businesses and families that have accumulated capital and knowledge over generations. Instead of seeing them only as taxpayers or sources of Government revenue, why not invite them to become co-investors in the country’s future?
Their contribution need not be limited to money. They can bring financial discipline, management experience, international relationships, governance and commercial knowledge. Government brings something equally important: national strategy, public infrastructure, regulation and the ability to coordinate projects on a scale that individual businesses cannot.
The participation of large institutions must not exclude ordinary citizens. Nor should it grant investors undue influence over national priorities. The purpose is to combine public direction with private discipline under rules that protect the national interest.
Debt Can Leave a Burden or an Inheritance
Every rupee Government borrows belongs to someone who expects repayment. Debt is never free money. Interest and principal will eventually be paid from project revenues, future taxes or other national income.
But there is an enormous difference between leaving the next generation debt without assets and leaving it debt accompanied by productive assets. Borrowing used simply to maintain consumption can become a burden. Borrowing that produces energy, water, food, businesses, exports, infrastructure, skills and employment can increase the country’s ability to repay.
That is why the debate about Mauritius’ public finances should not end with the statement, ‘There is no money.’ History shows that nations have developed even when their governments began with very little. Their deeper assets were their people, institutions, savings, businesses, skills and ability to organise capital. Mauritius possesses all of these.
The opportunity is to bring them together. Let citizens become creditors of their country. Let banks, businesses, institutions and major families become partners in productive national investment. Let Government provide national direction while professional expertise strengthens governance and execution.
Above all, let us borrow with purpose, invest with discipline and build something that remains after the debt has been repaid. An empty Treasury should never become an excuse for an empty national vision.
