Although severe poverty is rare 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 increasing, and those who are already disadvantaged are sinking into deeper poverty.
Inequality is growing in Mauritius and relative poverty increased from 8.5% in 2007 to 9.8% in 2012. Income growth of the bottom 40% increased at an annual rate of 1.8% compared to 3.1% for the population at large over the same period. As a result, the middle class has shrunk in the last 5 years and vulnerability to falling back into poverty has increased. Efforts are needed to raise the quality of the education system, including the vocational sub-system to cater to private sector development needs and reduce skills mismatches. Furthermore, a better coordination between sectors such as education, health, and active labour market programs could better tackle chronic poverty and facilitate labour market reintegration of those left behind.
A person or household is deemed ‘poor’ if its resources fall below a threshold or cut off line known as the poverty line. Statistics Mauritius (SM) uses the relative poverty line set at half of the median monthly household income per adult equivalent. In 2012, the relative poverty line was Rs 5,652 for a 1-adult member household and Rs 13,310 for a household comprising 2 adults and 2 children.
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 a total 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 percent 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. For food and income, they depend on subsistence agriculture, livestock-rearing, small-scale fishing and microenterprises.
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.
The average income of households in relative poverty was Rs 9,800 per month, ten times less than that of the richest 10% of households (Rs 97,400).
The average monthly consumption expenditure of households in relative poverty was Rs 8,300, seven times less than that of the richest 10% of households (Rs 53,600).
Mauritius’ main challenges include: increasing competitiveness through greater regional integration, creating a stronger 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 terms of climbing the value chain and reorienting exports toward emerging markets. Reforms with regards to 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, in order to cope with the impacts of a potential economic downturn.