Intesh Seebaluck and Navnit Seeburrun: « Mauritius is currently facing significant demographic and labour market challenges. »

The Research Analyst and Investment Analyst of AXYS have been the author, of a well economically and politically commented, report together with Sanjay Goolab having title as »The Hands That Build Mauritius Challenges Opportunities and the Future of Labour_01″ which went public on the 7th March 2025.

Jean Claude Le Roy Why the title: The Hands That Build Mauritius: Challenges, Opportunities, and the Future of Labour?
Intesh Seebaluck and Navnit Seeburrun: The title underscores the fundamental role of human capital in Mauritius, which is the country’s most important and valuable resource. Unlike resource-rich nations, Mauritius relies heavily on its workforce to drive economic growth, innovation, and development. The ‘Hands That Build Mauritius’ symbolizes the skilled and diverse labour force that has shaped the nation’s progress. The subtitle ‘Challenges, Opportunities, and the Future of Labour’ highlights the need to address pressing issues such as brain drain and skills shortages while also exploring ways to harness opportunities for sustainable economic expansion.

Why is your report having so much attention?
The report is gaining significant attention because it addresses one of the most pressing issues facing Mauritius today, that is its labour force. And I believe its the first time that such a detailed report about one of the pressing issues of our economy has been made public. Human capital is the backbone of the Mauritian economy, and any shifts in employment trends, skills availability, workforce migration or drop in Standard I enrolment have far-reaching consequences.

For example,
Enrolling in Standard I lay the foundation of a nation’s future workforce, as these young learners will eventually progress through the education system to become skilled professionals who drive economic growth. Our report highlights that over the past 38 years, Standard I enrolment fell by 40.2% and this raises serious concern for the future workforce. When the foundation itself is on the decline, it’s obvious that down the drain there will be an erosion.

The report presents a data-driven analysis of these challenges, and it also highlights potential solutions to tackle the labour issues.
Also, the relevance of the report extends beyond policymakers to businesses, investors, and the general public, as our findings directly impact the country’s economic resilience and future growth.

The challenges behind coming up with this report?
Producing this report was tough. First, access to accurate and up-to-date data on Mauritius’ labour market, migration trends, and economic indicators was a major hurdle. Yes, a lot of it is available, but it takes a lot of time to collect, manage and organize the data in such a way that makes it easy to analyse.

Official statistics provide some insights into the discrepancies between reported figures and real-world observations required extensive cross-referencing and independent analysis. For example, when it comes to data on migration, Statistics Mauritius says that 1,850 people leave the country annually, but a lot of Mauritians have this notion that a lot more than 1,850 of their peers leave the country to seek better opportunities. For example, I always hear that friends in the audit industry are emigrating to countries such as Luxembourg. And when we dug further into migration data discrepancy, we found data from the UN that suggests that a lot more people leave the country to work abroad. But on the positive side, Statistics Mauritius revised its net migration data to 3,186 people in March. Whether this is an effect of our report or them waking up, I don’t know.

Second, labour issues are complex, it involves involving economic, social, and even political dimensions. Striking a balance between an objective, data-driven approach and the lived experiences of workers, employers, and policymakers was critical. So, there was this ‘scary’ aspect of writing this report and our previous ones, because you have to make sure there is no mistakes in our data and our assumptions to make sure that the authorities do not come after you.

Talk about the Education sector / Education to meet demand!
The education sector plays a critical role in shaping the workforce and meeting the evolving demands of the Mauritian economy. As a small island economy heavily reliant on services, the quality of our workforce determines our competitiveness, resilience, and future prosperity. Education empowers individuals with the skills, adaptability, and knowledge needed to navigate an ever-evolving global landscape, ensuring that they remain productive and innovative in the face of technological advancements and industry shifts.

But for some reason since 2016, expenditure on education has decreased from 14% of the total government expenditure to only 9% in 2024. This trend does not make sense, the country has been consistently working to diversify our economy for decades and while doing so we have become excessively dependent on the service sector, which again is a sector in which humans are the main resource. Considering how our economy evolved, spending on education should have increased rather than decreased. The funny part (in my opinion) is that today we allocate around 36% of the spending budget to social expenditure and this shows us that we have been, and we still find short term social spending more important than long term economic resilience.

When we dive deeper into the education spending statistics, we can notice how inefficient spending is. More than 50% of education expenditure is allocated to the secondary level. Yet there is an enormous dropout rate in our secondary education. For example, in 2010 there were around 17000 students enrolled in Standard I but when that cohort reached HSC level, there were only around 7000 students left and only around 6000 students passed their HSC. The world bank found similar findings in 2023. They said that we invest excessively in secondary education while pre-primary, primary and tertiary levels fall short. Actually, they indirectly advised us to spend more on preprimary level as investment in early childhood yields higher returns and for a knowledge-based economy like ours (which is basically another term for service driven economy), we should spend a lot more on tertiary education as it is the last step to nurture a skilled labour.

Mauritius must also align its education system with industry demands to equip its workforce with the necessary skills for emerging sectors such as fintech, artificial intelligence, and renewable energy. However, education reform must go beyond just academic alignment; it should also address the well-being and potential of every child.

Children who struggle academically, particularly those who fail at Grade 6, should not be forced to remain in school for an additional three years, and doing the same curriculum as their peers. This approach can be discouraging and may even create a deep sense of inferiority among them.
Instead, the government should invest in well-equipped technical schools that cater to students’ diverse talents and interests. These institutions should provide hands-on training in various trades while incorporating essential subjects such as entrepreneurship and basic business management. By doing so, students will not only gain practical skills in fields like carpentry, plumbing, and electrical work among others but also develop the knowledge and confidence to start and run their own businesses.

What about the Wage issues, Workforce breakdown and Population decline!
Mauritius is currently facing significant demographic and labour market challenges. Since 2000, the labour force has grown at a modest average annual rate of just 0.7%, which is far slower than our GDP growth. A key contributing factor is the country’s declining population. Internationally, a fertility rate of approximately 2.1 children per woman is considered necessary to maintain population stability without immigration. In Mauritius, however, our fertility rate has remained below this replacement level since 1997 and in 2022, the country recorded its first-ever population decline.

This downward trend is projected to continue. If current patterns persist, Mauritius’ population could fall to around 920,000 by 2063, representing a -27% decrease. Such a demographic shift has far-reaching implications, particularly for the labour force and the increasing proportion of older citizens.

Signs of these changes are already evident. For instance, fewer children are enrolling in Standard 1, indicating a future decline in labour market entrants. Projections suggest that by 2063, the working-age population could contract by 37%. At the same time, the ageing population is expanding rapidly. Pensioners currently represent around 29% of the working-age population, but this figure could rise to 60.5% by 2063, which will certainly exacerbate the high costs of social spending in the country (around 36% public expenditure is currently attributable to social protections).

Emigration presents another critical challenge. Each year, an estimated 3,500 Mauritians emigrate, and approximately 182,000 citizens, which is about 14.5% of the population, now live abroad. While this trend is concerning, it is also understandable given the relatively low salary levels in the country. Many of these emigrants have invested heavily in higher education, yet local salary levels often make it difficult to recoup that investment.

Our case study brings this issue into sharper focus, particularly the role of the wage structure in discouraging higher education. For example, a graduate who studied abroad and spent roughly Rs 3 million on education may accumulate a net worth of only Rs 800,000 over ten years. By contrast, a worker with no HSC qualification earning the minimum wage could potentially reach a net worth of Rs 3.2 million in the same period. The concern is not that non-degree holders are overcompensated, but rather that the wage system fails to adequately reward educational attainment. This undermines the value of higher education and raises serious concerns about the long-term sustainability and competitiveness of our labour force.

Let’s talk about the 182 k Mauritians living abroad and the need of Immigrant workers.
Since 2010, Mauritius has experienced a consistent increase in emigration, with approximately 3,500 citizens leaving the country each year. By 2020, the total number of Mauritian emigrants had reached 182,000, equivalent to around 14.5% of the national population. This places Mauritius 35th out of 160 countries with populations exceeding one million, in terms of emigration rates. What is particularly striking is that many of the countries ranking higher are either war-torn countries, Eastern European countries, or small island states in the Caribbean. For a peaceful and relatively stable country like Mauritius, this is a very significant’.
Even more concerning is that 16% of our working-age population has emigrated, at a time when the country is already grappling with skills shortages across several key sectors. This trend poses additional challenges to the sustainability of our labour force and the broader economy.

Mauritian emigrants tend to concentrate in a handful of countries. France, UK, Australia, Canada, and South Africa together account for approximately 85% of all Mauritian emigrants. While France continues to be the top destination, its relative share has declined over time, as countries such as the UK, Australia, and particularly Canada have seen increased inflows due to their lax immigration policies. In recent years, we’ve also seen an increase in Mauritians moving to Luxembourg, particularly to work in its financial services sector.

On the other hand, immigration to Mauritius has remained relatively flat since 2015. The number of foreign workers has shown little variation, with the majority originating from India and Bangladesh. Together, they comprise around 60% of the immigrant workforce. These individuals are primarily employed in « blue-collar » industries like manufacturing (especially textiles) and construction.

Budget 2025-2026, what would be the tool to overcome some issues?
To build a strong and resilient workforce while sustaining economic growth, Mauritius needs to rethink its approach to education, wages and immigration.
1. Investing in Education: Aligning Skills with Industry Needs
Our share of spending on education has fallen from 14% to 9% over the past 10 years and has even decreased from USD 606M in FY18 to USD 466M in FY25 in inflation-adjusted USD terms. In the context of Mauritius as a knowledge-based economy, the decline in education spending is an unusual and concerning trend.

The spending is also heavily disproportionate towards Secondary Education. The World Bank has emphasised on the importance to redirect resources to pre-primary education which could enhance learning outcomes and improve efficiency, as early investment in child development yields high returns.
Moreover, despite higher allocation towards Secondary Education (which accounts for more than 50% of total spending on Education), drop-out rates remain high with only around 28%-35% of students completing their HSC.
Better opportunities must be available for drop-out students. One particular opportunity lies within the Agriculture sector, which has long been overlooked. We can offer the following alternatives for students pursuing a career in Agriculture:
Expanding technical schools to offer hands-on training in vocational skills like modern farming, agro-processing, and sustainable agriculture.
Integrating agricultural technology (AgriTech) and digital skills into school curriculums, so students learn how to use AI-driven farming tools, hydroponics, and precision agriculture.

Encouraging entrepreneurship in agriculture, helping students develop agribusiness ventures that create jobs and strengthen the sector.
By modernizing agricultural education, we can attract young people to farming, improve food security, and boost economic sustainability.

2. Wage Reforms: Making Work More Rewarding
One of the biggest challenges Mauritius faces is retaining talent. Wage disparities, limited career growth, and a lack of merit-based promotions push many people, especially skilled workers, to leave the country. Addressing this issue requires:
Fair wage policies and performance-based promotions to encourage professionals to stay.
Tax incentives and support for returning Mauritians who want to contribute to the economy.
A fair and competitive wage structure will help reduce brain drain and a higher salary might even attract skilled immigrant workforce to our country.

3. Immigration: Fixing Labour Shortages Without Bureaucracy
Mauritius depends heavily on migrant workers, especially in agriculture and manufacturing, but complex work permit procedures slow down recruitment.

To solve this, we need to:
Simplify work permit processes for essential industries, including agriculture.
Provide agricultural training for locals to reduce over-reliance on foreign labour.
Encourage skilled Mauritians abroad to return by offering incentives to invest in modern farming and agribusiness.
A balanced immigration strategy can ensure stability in key industries.
A Holistic Strategy for a Sustainable Future

To secure its economic future, Mauritius must address workforce challenges across all industries, especially agriculture. By reforming education, ensuring fair wages and streamlining immigration policies, a, we can build a skilled, resilient workforce while revitalizing a sector that remains key to our food security and economic stability.

Thank you very much Intesh Seebaluck and Navnit Seeburrun.