Sustainability

Key Sustainability measures announced in National Budget 2024 - 2025

Sustainable finance

• Climate and Sustainability Fund with Rs3.2bn allocation.
• 2% levy on corporate profits to mobilise funds for climate adaptation.

Waste management

Development of two Regional Integrated Waste Processing Facilities through public and private partnerships.

Energy transition

Government Support Agreement to unlock over Rs15bn of private sector investment in renewable energy projects in the upcoming 2 years.

Agriculture

Rs1m for planters purchasing fully equipped container farming facilities

Climate adaptation

• Rs1bn towards  floods management
• Coral reef restoration programme

Overview

The Budget introduces good sustainability initiatives, notably emphasising the need to mobilise Rs300bn towards climate adaptation and mitigation. If effectively utilised, this dedicated revenue stream can support natural resource conservation, economic activities, and cultural heritage preservation. However, a comprehensive climate adaptation strategy is still lacking, missing opportunities for circular economic models, sustainable finance, and blue economy development. 

Also, in the run up to 2025 COP 30, where countries are due to submit their 2nd round of commitments under the Paris Climate Agreement, this Budget falls short in showing concrete direction on how it will align the next generation of the NDCs (Nationally Determined Contributions) to the goals of limiting global temperature rise to 1.5 degrees and increasing resilience to climate impacts.

Below is our analysis of the Budget categorised under themes that we consider relevant to the overall sustainability agenda of the country.

Climate adaptation 

Given Mauritius' status as a Small Island Developing State, climate adaptation should be the nation's top priority. The Budget outlines numerous measures aimed at climate adaptation, which is a positive sign that climate action is gradually taking centre stage in the Budget and the economy. However, there is still no evidence of a comprehensive national climate adaptation strategy that identifies Mauritius' adaptation needs and specifies the necessary regulatory, policy, and financial tools to build resilience. 

A cohesive, cross-cutting plan is urgently needed to map out the range of climate risks, identify adaptation priorities, specify policy and legislative tools, and establish financing channels to build resilience across all critical areas. Without this strategic blueprint, budgetary allocations risk being inadequate, uncoordinated, and unable to enhance Mauritius' adaptive capabilities.

Circular economy

The inclusion of circular economy principles in the Financial Instructions for Disposal of Unserviceable Electrical/Electronic Items is a positive step toward addressing the challenges posed by e-waste. Additionally, the exemption of excise duty on plant-based plastic bottles encourages the use of renewable resources, aligning with circular economy principles.

These measures alone will not fully catalyse a transition to a circular economy. A broader approach is necessary. Regulatory measures discouraging the take-make-dispose model, sustainable product design investments, and policies supporting circular entrepreneurship are essential. Developing a national Circular Economy Roadmap, backed by targeted public investments and innovative financing, is crucial for strategic direction.

Sustainable finance 

Mauritius has been striving to position itself as a Sustainable Finance Hub for Africa, with the goal of addressing the continent’s finance gap and supporting initiatives aligned with the Paris Agreement. Despite these aspirations, the Budget again lacks the necessary policy signals, regulatory structures, and targeted capital market reforms to fully realise this potential. 

A notable measure is the mobilisation of Rs300bn for climate adaptation and mitigation, partly funded through a 2% levy on corporate profits. The establishment of a Climate and Sustainability Fund with an allocation of Rs3.2bn is also commendable, but the absence of a national Green Taxonomy may pose challenges in effectively utilising these funds.  

Also, the 2% levy on corporate profits may dis-incentivise corporates to allocate capital towards climate actions proactively and may lack the required impetus for the private sector to do the needful.

Energy transition 

The Budget again falls short in providing a comprehensive plan to achieve the 60% renewable energy target by 2030. An integrated energy transition masterplan is urgently needed to map out future energy demand, diversify the renewable mix beyond solar, upgrade grid infrastructure, and establish robust policy frameworks. While the Budget announced some new incentives to promote renewable energy adoption by various sectors, it lacks a long-term plan reconciling demand scenarios, optimal energy mix, and exploring alternatives beyond excessive solar reliance. 

A comprehensive master plan is crucial for transitioning Mauritius away from fossil fuels towards cleaner, more affordable, and reliable energy sources. An innovative measure could have been introducing policies enabling investments in waste-to-energy conversion, which provides an alternative energy source while improving waste management and reducing landfill pollution.

Eco-tourism 

With the Tourism Development Bill, the Budget aims to establish a legal framework for sustainable tourism. Positive aspects include support for local artists and efforts to preserve our local heritage. Despite discussions about “Sustainable Re-engineering”, the Budget still lacks the necessary drive to position Mauritius in the high-value eco-tourism segment. Without a comprehensive strategy and inter-ministerial policy reforms, allocations may have limited impact in making Mauritius a competitive eco-destination. Moreover, the stated goal of achieving Green-Certified Destination status by 2030 is not a new initiative. 

Our tourism sector is at a crossroad. The last national tourism strategic plan with a focus on sustainability was done in 2018.  Investing in an eco-tourism integrated master plan with clear indications for policy decisions could have set the foundation to diversify the sector.

Agriculture 

The provisions of various incentives to operators in the agricultural sector is a welcome move. Through grants and subsidies, the Budget continues on its previous efforts to minimise imports by encouraging local production by small farmers. The Budget also has a strong emphasis on revamping sugarcane cultivation through increased cane replantation schemes.

The plans to implement a quarterly monitoring programme to monitor the use of pesticides, and the procurement of Internet of Things sensors to enable real-time monitoring of surface and groundwater quality levels are excellent initiatives.

The Budget does not however articulate an overarching smart agriculture strategy to modernise the sector through technological interventions. In the absence of such a roadmap harmonising policies and financing, Mauritius risks lagging in adopting future-ready, smart agricultural solutions.

Blue economy 

The measures announced towards the blue economy show progress but there is still room for more comprehensive development to enhance resilience. The government’s ambitious goal of increasing the blue economy’s share of GDP to 20% recognizes its potential for growth. Notable steps include coral farming projects, amending sand extraction laws, and an environmental monitoring programme. In addition to these, a strategic framework encompassing emerging sectors like marine biotechnology and renewable ocean energy could strengthen Mauritius’s position as a sustainable blue economy leader.

Waste management 

We welcome the categorisation of recycling as a manufacturing activity, an opportunity for organisations to move into recycling, while benefiting from the various incentives within that sector. In the same breath, we note the announcement of the development of two Regional Integrated Waste Processing Facilities through Public and Private Partnerships (PPP), which aims at converting waste into compost and new materials. 

It should be noted that recycling relies heavily on proper infrastructure being put in place. While the focus on recycling and waste processing facilities is commendable, addressing infrastructure challenges remains crucial and not sufficiently covered in this budget. Ensuring efficient waste collection and segregation is essential for successful circular waste management.

Concluding remarks 

As the global sustainability landscape is rapidly evolving, building resilience as a country is a key imperative and Mauritius cannot be left behind. This Budget has demonstrated some positive intent through the initiatives announced, but mostly piece-meal in nature. The lack of national level strategies and policies towards building that resilience may limit our ability to grow our economy and thereby jeopardise the welfare of our society in the long run.