To take the bull by the horns : a host of bold measures in a volatile  and uncertain environment 

“The government budget is a reflection of the social contract: what we choose to do  together.” Paul Samuelson (Nobel laureate economist) 

Dr The Honourable NAVINCHANDRA RAMGOOLAM, Prime Minister, Minister of Defence,  Home Affairs and External Communications, Minister of Finance, Minister for Rodrigues and  Outer Islands, delivered his Budget Speech for year 2025/2026 against the backdrop of  challenging local economic key indicators already in the red zone coupled with a world  situation mired in uncertainty in so far as economic as well as geopolitical matters are  concerned. The thrust of the present budget revolves around the three pillars, namely,  economic renewal, a new social order and fiscal consolidation. There is a clear shift in the  economic paradigm with structural reforms being brought about to our economic fabric, with  the objective of unlocking growth, containing external deficits, boosting productivity and  creating the necessary medium for investments to be channelled towards job creation and  raising of the standard of living. As the Minister of Finance puts it, “ A new bridge built  together with the people of this country on solid foundation with solid railings to protect the  more vulnerable with a solid platform to withstand the storm and with a clear pathway to a brighter future for the common good of this and future generations.” With this in mind, it  seems the present budget is putting a lot of focus on Artificial Intelligence, digitalisation and  Blockchain & allied technologies. 

There is a new philosophy built around the concept of “repurposing”, for instance, Resource  Repurposing towards more productive use of our labour, land and capital. There is definitely  in this budget a focus on empowering more women to start their own business and setting  up of the necessary steps to address the acute shortage of labour and skills which is impacting on investment and economic growth. The recruitment of foreign labour and skills will be  tackled through a fast-track and simplified rules-based work permit system to be managed by  the Economic Development Board (EDB). The third pillar of the New Economic Model is about  building growth through transformative investment with inherited consumption-driven  approach being replaced by an investment-led growth model. Also, the future of tourism will  focus on quality, value addition, sustainability, inclusion and resilience. In partnership with  the private sector and other stakeholders, the Government will work on a blueprint to rethink the future of tourism in the light of both challenges and opportunities. Actions to embrace  innovative agriculture include the setting up of a food resilience scheme to incentivize  controlled environment agriculture. 

While government’s strategy for the financial services sector focusses mainly on promoting  higher value-added offerings and consolidating financial stability, there is a string of policies  to stimulate investment in the banking sector. An important measure to protect the  purchasing power of the population is the creation of a Price Stabilisation Fund of Rs 10 billion, starting with an initial Rs 2 billion contribution in this budget. Equally important is focussing  on environmental considerations as part of the New Social Order as enunciated in this budget  with the aim of the reaffirmation of the commitment to help safeguard the natural world for  present and future generations. Last but not least, a zero-tolerance approach to combat drug  abuse. 

The Minister of Finance is forecasting a real GDP growth path of 4% to 5%, a primary budget  surplus and a lower public sector debt of 75% of GDP with a commitment to reduce the latter to 60% in the long term. The above projections are inclusive of the revenue from Chagos  which will be used for debt repayment for the first 3 years. The projected reduction in 

inefficiencies, waste, and the rationalization of parastatals is expected to make the country  register a saving of Rs 5 billion over a 3-year period. There will be a reform of the various  pillars of our pension system including the revamping of the National Pension Fund which will  replace the CSG. The age eligibility for Basic Retirement Pension is being increased to 65 years  with a phasing out period of 5 years of the current scheme (60 years). 

“The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled  high with difficulty, and we must rise with the occasion.” – Abraham Lincoln 

Shamin A. Sookia 

Managing Director