( CNN ) What is Africa 's most competitive economy ? Is it oil-rich Nigeria ? No . Perhaps South Africa , the continent 's mining powerhouse ? Try again . Benefiting from a long history of political stability , a good governance record and an open and flexible regulatory system , Mauritius overtook South Africa last year to become the continent 's most competitive economy . The tiny island country , located some 500 miles east of Madagascar in the middle of the Indian Ocean , is regularly hailed as one of Africa 's success stories -- since it gained independence in 1968 , Mauritius has had an excellent record of peaceful transition of power with free and fair elections taking place on a regular basis . Surrounded by stunning coral reefs , Mauritius spans less than 800 square miles and is home to over 1.3 million people -- mainly an ethnically and religiously diverse mix of people of Indian , African , French and Chinese heritage . The country , dotted with green sugar cane fields , sparkling lagoons and jagged volcanic mountains , is well known for its perfect palm-fringed beaches and cobalt blue seas , attracting nearly a million tourists annually . Despite the global slowdown in recent years , the Mauritian economy has consistently achieved annual growth rates of more than 3 % , with estimations showing a rise to 3.5 % in 2014 and 4.1 % in 2015 . The country enjoys the best business environment in Africa , according to the World Bank , which ranks it first in the continent for ease of doing business . Over 50 % of the island country 's land is arable , with sugarcane occupying about 90 % of its total cultivation land . In fact , sugarcane is the country 's major export crop -- in 2013 , Mauritius produced an estimated 407,000 tonnes . Yet , despite sugar being a major export for decades , Mauritius has managed to successfully diversify its economy , mainly by investing in the manufacturing sector . Initially , the focus was placed on the production of textiles and clothing , but lately the country has begun setting its sights on exporting jewelry and watch components . Jewelry , watch and diamond production currently make up 10 % of the Mauritian foreign exports , adding more than $ 150 million to the country 's GDP . Overall , the manufacturing sector expanded by 3.0 % in 2013 , up from 2.2 % the year before . Besides agriculture and manufacturing , other areas of rising economic activity include tourism and finance , especially banking and business outsourcing . The infamous flightless Dodo bird was a native here but unfortunately became extinct in the 1600s . Some 600 indigenous vegetation species grow on the volcanic island , which is also home to a wide variety of rare birds and insects . QUICK FACTS . Official name : Republic of Mauritius . Form of government : Republic . Capital : Port Louis . Freedom House status : Free . Reporters Without Borders Press Freedom Index : 70 . More from Africa View . Mauritius , the great melting pot .
Mauritius is Africa 's most competitive economy . Reliant on oil exports for decades , Mauritius has transformed its economy in recent years . The tiny island country is home to more than one million people .