Although it is rare to find severe poverty in Mauritius compared to other parts of Africa, the country contains a minority of very poor households, most of which are located in rural areas. In the wake of the country’s exposure to increased global competition – and a consequent decline in production of sugar and textiles for export – rural poverty is on the rise. Unemployment is rising, and those already disadvantaged are sinking into deeper poverty.

Mauritius has eradicated extreme poverty, and at 2.2 percent in 2017, the incidence of poverty measured at the $3.20 a day line (2011 PPP) is also low. That year, only about one in eight Mauritians were below the upper middle-income class poverty line of $5.5 a day 2011 PPP. About one in two poor in Mauritius are inactive and live off public transfers. In contrast, a substantial share of the working poor is employed in the informal sector in tourism, manufacturing, and household services. The latter is a concern as they will likely lose their jobs or work shorter hours due to COVID-19.

Mauritius has eradicated extreme poverty, and at 2.2 percent in 2017, the incidence of poverty measured at the $3.20 a day line (2011 PPP) is also low. That year, only about one in eight Mauritians were below the upper middle-income class poverty line of $5.5 a day 2011 PPP. About one in two poor in Mauritius are inactive and live off public transfers. In contrast, a substantial share of the working poor is employed in the informal sector in tourism, manufacturing, and household services. The latter is a concern as they will likely lose their jobs or work shorter hours due to COVID-19.

Highlights.

In 2012, around 33,600 households (9.4%) comprising 122,700 persons (9.8%) were in relative poverty.

Children were more prone to poverty than older people. There were an estimated 42,100 children in relative poverty out of 285,900 children.

The following households were more likely to be in relative poverty:

• Households with 3 or more children
• Households headed by divorced/separated persons
• Households headed by persons with a low educational attainment
• Households with one parent and unmarried children only
• Single member households
• Households with 6 or more members (large households)
• Female-headed households

Mauritius also incorporates the island of Rodrigues, which is substantially poorer than the main island. About 40 per cent of the population of Rodrigues lives below the poverty level. The island has no sugar cultivation and little export manufacturing or tourism. The few existing small-scale industries mainly supply the local market. Except in the main town, Port Mathurin, most households are rural. They depend on subsistence agriculture, livestock-rearing, small-scale fishing, and microenterprises for food and income.

People in Rodrigues earn 30 to 50% less than the average national per capita income, and the average landholding is less than 1 hectare. School dropout and unemployment rates are high.

Household income and expenditure.

One in three Mauritian households reported a reduction in their income compared to the time before the pandemic, with half of them seeing it decrease by up to 50 percent. Again, households with a larger share of members were employed in the informal sector or were displaced reported having lost income compared to before the pandemic. In line with these results, up to 40 percent of households reduced food consumption, and 13 percent relied on savings by the end of the first lockdown in July.

Over the decade of the 2000s, the increase in household income inequality was driven by the dynamics of individual earnings, with earnings rising much faster at the top than at the bottom of the distribution. This dynamic was ascribable to the skills shortage associated with structural changes in the economy, from traditional and low-skills sectors toward relatively high-skilled services, which increased the demand for skilled workers while their supply rose more slowly. The rise in total income inequality was mitigated by an extensive system of public transfers, which led to a moderate reduction in the Gini coefficient over the 2012-2017 period from 38.5 to 36.8 percent.

Development challenges.

Mauritius’ main challenges include: increasing competitiveness through greater regional integration, creating a more robust environment for innovation, making growth more inclusive by addressing a scarcity of skilled human resources, and bolstering resilience to natural disasters and climate change.

Mauritius is set to accelerate reforms aimed at diversifying the economy, both in climbing the value chain and reorienting exports toward emerging markets. Reforms concerning trade barriers, education, and infrastructure will be crucial to achieving this. Moreover, the acceleration of fiscal consolidation is essential to achieving substantial efficiency gains in the budget and ensuring effective expenditure in priority areas such as the social safety net system to cope with the impacts of a potential economic downturn.

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