Mauritius, a small island nation known for its vibrant economy and diverse culture, is facing a demographic crisis that could reshape its future. According to a 2024 report from Statistics Mauritius, the country’s population is declining for the first time in nearly a century, driven by a low birth rate, increasing mortality, and significant emigration. This demographic shift, coupled with a rapidly aging population, poses serious challenges for the labour workforce and the broader economy in the long term.
A Declining and Aging Population
In 2024, Mauritius recorded 12,853 births against 12,507 deaths, resulting in a natural population increase of just 346 people—the lowest in recent history. This near-stagnation is compounded by a negative migratory balance, with 3,186 Mauritians, primarily young and skilled professionals, leaving the country for better opportunities abroad. The report highlights a significant drop in the birth rate to 9.8 per 1,000 inhabitants, down from 10.2 in 2023, while the mortality rate has risen to 10.1 per 1,000, reflecting an aging population and a concerning uptick in infant mortality (14.4 per 1,000 live births in 2024, up from 13.1 in 2023).
The aging demographic, often referred to as the “Grey Tsunami,” is a critical factor. The proportion of elderly citizens is growing as fewer children are born, and life expectancy increases. This shift is already evident in the population pyramids from 1972 to 2024, which show a narrowing base of younger individuals and a bulging older age group. If current trends continue, Mauritius risks mirroring nations like Japan or Italy, where aging populations have strained economic systems.
Impact on the Labour Workforce
The aging population and declining workforce present several long-term challenges for Mauritius’ labour market, particularly in key sectors like finance, IT, and engineering, which rely heavily on skilled labour.
- Shrinking Workforce: A declining birth rate and high emigration of young, educated Mauritians are reducing the pool of available workers. In 2024, the net loss of 3,186 emigrants, many of whom were skilled professionals, exacerbated the brain drain. This trend weakens critical industries, as companies struggle to recruit talent to replace retiring workers. The loss of young graduates to countries like Australia, Canada, and Europe further limits innovation and growth in sectors vital to Mauritius’ economy.
- Increased Dependency Ratio: An aging population means a higher dependency ratio, with fewer working-age individuals supporting a growing number of retirees. This places pressure on social welfare systems, particularly pensions. The International Monetary Fund has recommended raising the retirement age from 60 to 65 to mitigate this, but such reforms face political resistance. Without action, the government may need to divert funds from productive investments like infrastructure and education to sustain pension payouts, stifling economic growth.
- Skills Shortage and Economic Strain: The emigration of skilled workers, combined with a declining birth rate, creates a skills shortage that hampers industries like technology and finance, which account for significant portions of Mauritius’ GDP. For instance, the financial services sector, contributing 13.3% to gross value added, requires a robust ecosystem of skilled labour to remain competitive. A dwindling workforce could lead to reduced productivity and innovation, making it harder for Mauritius to attract foreign investment.
- Rising Healthcare and Social Costs: An older population demands more healthcare and social services, straining public resources. The increase in mortality, including a rise in infant mortality, also raises concerns about the state of neonatal care and public health systems. These challenges could divert resources from workforce development programs, further limiting opportunities for upskilling younger workers to fill gaps left by retirees.
Potential Solutions and Policy Recommendations
To address the challenges posed by an aging population and shrinking workforce, Mauritius must adopt proactive measures:
- Boosting Birth Rates: The government could introduce financial incentives, such as tax breaks or subsidies for families, to encourage higher birth rates. Improving access to childcare and promoting work-life balance could also make parenthood more appealing to younger generations.
- Retaining Talent: To curb emigration, Mauritius needs to enhance job opportunities and quality of life for young professionals. This could include investing in high-growth sectors like fintech and renewable energy, offering competitive salaries, and addressing wage stagnation. Creating an ecosystem that supports innovation and entrepreneurship could also incentivize skilled workers to stay.
- Reforming Pension Systems: Gradually increasing the retirement age and redirecting pension funds toward productive investments, as suggested by the IMF, could alleviate fiscal pressures. However, such reforms must be paired with public awareness campaigns to gain political and social buy-in.
- Upskilling and Education Reform: Strengthening the education system to produce graduates with skills aligned with market needs is critical. Partnerships with private sectors to offer training in high-demand fields like IT and engineering could help retain talent and fill gaps in the workforce.
- Encouraging Immigration: Attracting skilled immigrants to offset the loss of local talent could bolster the workforce. Streamlined visa processes and incentives for foreign professionals in key sectors could help Mauritius remain competitive.
A Critical Juncture
Mauritius stands at a demographic crossroads. The combination of an aging population, declining birth rates, and emigration of skilled workers threatens the long-term sustainability of its labour workforce and economy. Without bold policy interventions, the island risks economic stagnation, increased fiscal burdens, and a weakened social fabric. By prioritizing measures to boost birth rates, retain talent, and reform social systems, Mauritius can navigate this demographic challenge and ensure a resilient workforce for the future. The time to act is now—delaying could make the path to recovery far more difficult.
