World Bank: Mauritius is running out of growth. Eight reforms to restart it
The World Bank's 2026 Growth and Jobs report says the model that made Mauritius rich is fading: growth could slide to 1.2% a year by 2050. Who is held back today, what the eight proposed reforms would change, and what it means for your job and your pension.
In short
The warning: without reforms, the World Bank expects Mauritius's potential growth to fall from about 3.2% in 2025 to 1.2% a year by 2050, as the population ages and productivity stalls.
Why: growth now rests on consumption and debt-financed transfers. Pensions and social benefits cost about 11% of GDP against 1.9% raised in contributions, and investment goes mostly into real estate (35%).
Who is held back: 51% of young graduates are neither working nor studying, only 51% of women take part in the job market (78% of men), and Port Louis ranks 369th of 405 container ports.
The fix proposed: eight cheap reforms (competition, labour rules, childcare, digital skills, ports and electricity, SME digitalisation, e-government) would lift GDP by 6.68% by 2050 and real wages by 5.7%, for about US$22.5 million in 2027.
For you: these are recommendations, not decisions. Some are already in the 2026-27 Budget (a second container-handling licence, 220 MW of solar bids, micro-credentials); the harder ones touch severance pay and pensions.
What the World Bank says
Mauritius grew rich through two waves: the sugar boom of the 1970s, then export factories and tourism from the 1980s. Since the 1990s it has tried a third wave built on finance, ICT and outsourcing, but the World Bank's Country Growth and Jobs Report 2026 finds it has not yet delivered at scale.
Its central projection is sobering: if trends continue, potential growth slips from about 3.2% in 2025 to 1.2% a year by 2050. Mauritius should still regain high-income status within about five years, but catching up with Estonia or Singapore would take decades.
Three numbers sum up the problem. Investment adds only 0.3 percentage points a year to growth (0.8 in 2000-2011). Digitally delivered service exports grew about 10% since 2020, against 60% or more in peer countries. And finance makes 13% of GDP but only 3% of jobs.
Why growth is slowing
Public money: transfers take about 68% of government revenue. The universal Basic Retirement Pension, worth about 56% of median income, is far more generous than any other non-contributory pension, while the contributory National Pension Fund was abolished in 2020. Public debt is about 26 points above the upper-middle-income average.
Competition: about 20% of firms belong to conglomerates, and 69% of the 672 business activities studied were highly concentrated in 2019. Firms of 20 to 49 people are 46% more productive than the smallest, but those with 500 or more only 3.4%: the biggest firms face little pressure. State-linked businesses had revenues worth over a quarter of GDP.
Infrastructure: Port Louis suffers berth congestion and ranks 369th of 405 ports; the Ports Authority is at once regulator, landlord, operator and shareholder of the only container handler. Electricity tariffs are set by the CEB with ministerial approval, as the regulator is not fully working. And the country is short of about 5,000 IT professionals a year.
Who is held back today
The most striking finding concerns young graduates: 51% of 16-24 year olds with tertiary education are neither in work, education nor training, about twice the rate of those with less schooling. Youth unemployment was 17.1% in late 2025 (20.5% for young women). Meanwhile 55% of firms say lack of skills is why they do not hire, and many skilled Mauritians leave, mostly for France, the UK and Australia.
Women are the second group: 58% of women outside the job market cite household and family duties, and the private-sector gender pay gap is about 15%, mostly unexplained by education or job.
The eight reforms and what they would deliver
The World Bank groups its proposals in three blocks it says can be done within 1 to 3 years: institutions (an SOE ownership policy, a stronger Competition Commission with mandatory merger notification, faster labour disputes, lower severance and simpler wage orders, childcare), infrastructure (digital and soft skills, splitting the CEB's accounts, separating the Ports Authority's regulator role from its business) and incentives (performance-based SME digital grants, an upgraded KOREK super-app and data sharing through the InfoHighway).
Its model estimates the package lifts GDP by 5.15% by 2035 and 6.68% by 2050 compared with doing nothing, raises real wages by 5.7%, adds about 4,400 jobs (mostly women joining the workforce) and lowers public debt by 6.4 points of GDP. The cost is about US$22.5 million in 2027, which the Bank says pension and tax-exemption reform could easily pay for.
What to keep in mind
These are estimates from a World Bank model, not Government policy, and the Bank itself says the gains depend on implementation, which it finds has weakened since the days of Vision 2020. Some steps are already under way in the 2026-27 Budget: a second container-handling licence, bids for 220 MW of solar power, micro-credentials in the National Qualifications Framework, a Start-Up Act and an SOE Health Check.
The sensitive proposals are the ones that touch people directly: lower severance pay for unjustified dismissal (today up to three months' pay per year of service), a reformed pension, and opening State-dominated sectors. Expect those to be debated before anything changes.