March 30, 2012 / 7:28 AM / in 7 years

UPDATE 2-Mauritius president says to quit, re-enter politics

(Adds PM comment, analyst, economic forecast)

By Jean Paul Arouff

PORT LOUIS, March 30 (Reuters) - Mauritian President Anerood Jugnauth said on Friday he would step down from his ceremonial position and return to party politics to challenge Prime Minister Navinchndra Ramgoolam and his governing coalition.

Jugnauth said his resignation was effective Saturday, and it could rock the usually placid political arena in one of Africa’s most stable countries. Ramgoolam’s coalition has accused Jugnauth of meddling in the running of the Indian Ocean island.

“I have said that if the country needed me I wouldn’t hesitate to leave the State House and to embark on a new fight,” Jugnauth said in a statement. “The future is bleak and the country is waiting for a renewal.”

Jugnauth’s return to party politics has stoked expectations of a political showdown with the coalition.

A prolonged spat risks unsettling investors at a time economic growth is already slowing due mainly to external shocks, even though the row over his alleged interference in governance has so far left markets unscathed.

Ramgoolam welcomed Jugnauth’s resignation, and said the president had become agitated over a corruption scandal that had tainted his former party.

“Mauritians have noted that sir Anerood Jugnauth had accepted to serve as president for the last seven years under my primeministership. He has started to become agitated since the start of the enquiry on the acquisition of the Medpoint hospital,” Ramgoolam said in a statement.

The Labour Party depends on the support of the small Mauritian Social Democratic Party (PMSD) to stay in power after the president’s son, Pravind Jugnauth, pulled his Militant Socialist Movement (MSM) out of the alliance in August in disgust at corruption charges against some of his lieutenants.

Angered at the coalition’s treatment of his party, Jugnauth resigned as finance minister in outrage at the graft scandal in which he and members of his party were accused of inflating a government tender to acquire the hospital.

He then joined forces with the main opposition Mauritius Militant Movement (MMM) party. In doing so, he re-formed an alliance that his father Anerood had fronted and swept to power with in 2000, before losing at the next poll five years later.

It is widely believed the MSM-MMM alliance wants the president to return to the party to try to reinvigorate the opposition.

“This political instability will create more uncertainties given that the former president also mentioned the possibility of having a motion of no confidence against the government in parliament,” said Jocelyn Chan Low, a political analyst.

“We could expect a wait-and-see attitude from the business community. At the same time, this leaves little room for manoeuvre to a government with a slim majority.”

The Indian Ocean island’s economy, which relies heavily on tourism, said on Friday it had cut its economic growth forecast for 2012 to 3.6 percent from 4.0 percent, citing a bleaker outlook for key sectors of the economy. (Writing by James Macharia)

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