The world is changing fast and to keep up you need local knowledge with global context.
CAs make great Finance Ministers – ask Mauritius as it keeps overtaking SA
My memories of Mauritius are mostly fond. A clear, warm sea; friendly people; great horseracing – and my TV interview with Sol Kerzner on the beach in front of Le Touessrok. Where he lied, barefaced, about bribing Kaizer Matanzima. Another Mauritian memory will be made today. This time, I’m not expecting any trickery.
Star attraction of today’s CNBC Power Lunch is Africa’s 2012 Finance Minister of the Year, Mauritian Xavier-Luc Duval (55).
Like Kerzner, Duval is a chartered accountant. But that’s where most similarities end. While the hugely wealthy hotelier opted for the murky underworld of casinos, Duval has lived his entire life in public. Even his Facebook page is available to all. Both he and Kerzner, however, provide proof that if you want to understand business, you must understand its language. And, as CAs, they are experts in their knowledge of accounting, commerce’s lingua franca.
Because Finance is such a powerful portfolio, Governments often use the position as a reward for party loyalists. With mixed results. South Africa under the ANC has been competently served by a draughtsman (Trevor Manuel) and a pharmacist (Pravin Gordhan). Both lost little in the translation, learnt quickly, listened to the support staff and adapted well to the role. But they are exceptions. Economic history is full of examples where ignorance in financial matters has brought their nations avoidable poverty and hardship.
But when a nation appoints a numerate individual to the post, results can be transformational. Which seems to be happening right now in Mauritius. The tiny island republic just 65km long and 45km across, has overtaken South Africa in a number of areas global investors regard as critical. Among them the World Bank’s “Ease of Doing Business” index and the Heritage Foundation’s “Economic Freedom” index where Mauritius is comfortably on top of Africa’s table, ranking among the Top 10 globally.
Duval is the mastermind behind his country’s Africa Strategy, the latest move in this business-friendly direction. It outlines the ambition of this nation of 1,4m souls to be for Africa what Hong Kong is to China. To become the preferred conduit for foreign investment now flooding into the world’s last frontier market. Which, inter alia, means developing a financial sector to match South Africa’s.
The Mauritian will be only the second chartered accountant turned Finance Minister I’ll have interviewed on television. The other is Derek Keys, a business genius co-opted into South Africa’s Government during the country’s transition to democracy. He proved to be exactly the right man at the right time.
Having followed Keys’ career from the low profile chairmanship of packaging group Malbak through to creating the base for what is today BHPBilliton is among many privileges afforded by this job. A man with deep spiritual and emotional maturity, Keys came first in the chartered accountancy exam of his year. The nation was well served by his brilliance in managing Treasury through its most difficult stretch – and his role in helping mentor successor Manuel who, after a rocky start, ended as being universally admired.
Mauritius’s Duval looks like being his country’s version of Keys. Son of a leading politician, he was in Britain, graduating at the University of Leeds. After securing his CA, he returned home as founding partner of Coopers & Lybrand’s first office on the island. At 29, Duval was elected to the Mauritius Parliament and while still in his mid-40s became Tourism Minister and Vice Prime Minister. Duval moved over to the Finance portfolio three years ago.
He has put that time to excellent use, managing the country to its lowest Budget Deficit and Debt to GDP ratio in a decade, and clearing up long running diplomatic problems with key partners India and South Africa. The Indian Government was unhappy that Mauritius had become a haven for money launderers. After re-engineering of the Double Tax Treaty, SA-based businesses can no longer use the island as a tax convenience.
Duval’s focus now is for Mauritius to beat Rwanda, SA and Botswana and become the premier investment hub for Africa. Presumably using not only Hong Kong, but also Singapore and Switzerland as models, whose rational approach will appeal to his numerate mind. With his spreadsheets proving the benefits of following their path are both obvious and achievable. Numbers don’t lie. Sometimes they even give you courage to do bold things. As Mauritius is seeing to advantage.
* Alec Hogg co-anchors Power Lunch on CNBC Africa (DSTV channel 410) weekdays from noon to 1pm.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.