The island of Mauritius, off the east coast of Africa, has become an unlikely destination of choice for film-makers, and its vice-prime minister and finance minister Xavier-Luc Duval is confident that ‘Mauriwood’ will gain traction in coming years. The government has engaged in extensive efforts to develop the country’s nascent film industry, through investing in local talent and creativity and luring film-makers from India, Nigeria and the US to shoot in the country by offering a 30% refund on all costs incurred during filming.

This support has led the film industry to become one of Mauritius’s fastest-growing sectors, and Indian online magazine Media Newsline predicts that it could be worth MRs500m ($16.3m) by 2014.

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In an interview with fDi Magazine during the International Monetary Fund summit, Mr Duval maintained that the government’s promotion of Mauritius as a key film-making location is part of its efforts to diversify the country’s competitive sectors of growth. Highlighting India as a key partner, Mr Duval says the government has focused on boosting Mauritius’s notoriety through attracting Bollywood film-makers.

“We have a film subsidy that is really developing well particularly with India at the moment,” says Mr Duval. “We have been targeting Bollywood, but we also want to attract Hollywood, Nigeria’s Nollywood and also the Chinese film industry.”

Strong headwinds

Mauritius has worked to leverage its scenic environment as an alternative destination for film-makers in order to reduce its reliance on its tourism industry. Mauritius’s GDP growth, which slowed from 3.8% in 2011 to 3.3% in 2012 according to the African Development Bank, was badly affected due to a decline in tourism flows from the troubled EU, which is its major market.

Tourist arrivals from Europe decreased by 3.7% in the first six months of 2013, although tourist inflows from developing regions such as Asia and Africa increased by 25% and 2%, respectively, this year enabling Mauritius's tourism industry as a whole to grow by 1.5% in the first half of 2013, according to data from Statistics Mauritius. But other sectors need to pull their weight. The government’s third National Budget, which was unveiled at the start of November by Mr Duval, also highlighted sea ports, aviation and energy as additional sectors that will boost Mauritius’s growth.

“We have the safest and most efficient port in the [sub-Saharan African] region, which is Port Louis,” says Mr Duval. “We are currently in the process of spending $30bn to deepen it to 16 metres and lengthen the gate.”

Eyes on Africa

But it is the ‘Africa Strategy’, another pillar of growth highlighted in the new National Budget, that has been the most important of Mauritius’s attempts to accelerate its development. The country has worked to position itself as a conduit for foreign investor capital heading into sub-Saharan Africa, and the decision to create its first Mauritius-Africa Investment Fund proves that Africa will play a central role in Mauritius’s efforts to position itself as an offshore financial centre for local and international businesses entering the region.

The investment fund, which will be a hybrid of the International Financial Centre and the China-Africa Development Fund that is designed specifically for Africa, will provide equity investments to support Mauritian enterprises investing in Africa.

“We are really happy to be next to Africa because we see tremendous potential for mutual assistance in growth,” says Mr Duval. “We are looking at importing to Africa and eventually sourcing from Africa, once we get the feeder and shipping lines done. Furthermore, we are on the major sea route between China, Africa and the rest of Europe, and we want to tap into that.”

Small fish, big pond

While the government’s rhetoric has been met with support from Africa’s leaders, Mauritius faces fierce competition from other locations that are also vying for the continent’s attention. Dubai has emerged as Mauritius’s chief rival through its role as a trading post for foreign investors operating in Africa. Dubai, which has a head start from the early 1990s as a centre of commerce for traders who purchased wholesale goods from Asia and then re-exported them in smaller batches to African businessmen across the continent, has become the pre-eminent operational hub for foreign businesses expanding their operations across Africa.

In 2013, Dubai’s trade with Africa was worth $30bn according to the Dubai Chamber of Commerce and Industry. Data from greenfield investment monitor fDi Markets shows that outward FDI from Dubai to Africa in the past 10 years was worth $56bn. In contrast, outward FDI from Mauritius trailed Dubai’s performance, as businesses from the island invested just $8bn across the continent.

Yet Mr Duval maintains that while Mauritius remains a small player when it comes to Africa, its efforts have already yielded significant partnerships. “The work never stops, but we are fairly small so we react much more quickly than many other countries, and we tend to be more effective,” says Mr Duval. “We are now selling more to Africa than we are to the US, particularly with respect to South Africa. This is because there have been a few tariffs liberalised in South Africa, as well as the fact that that our industry has been able to market itself in a much better way.”