FECAS - ECSVS Forum

Seychelles sign loan accords with development partners

14-October-2014
Seychelles has signed a number of loan agreements with development partners.
This took place on the sidelines of the 2014 IMF/World Bank annual meetings in Washington D.C, USA, where Seychelles is being represented by a high level delegation led by the Minister for Finance, Trade and Investment (MFTI), Pierre Laporte.

First, Minister Laporte (on behalf of the government of Seychelles) signed two agreements with the World Bank – one for the recently approved Development Policy Loan, and a second for the innovative Cat-DDO loan, a contingent facility for natural disasters. Both agreements are for US $7 million each. It is to be noted that Seychelles is the first African country to implement a Cat-DDO.

Minister Laporte also signed a US $4 million loan agreement with the Opec Fund for International Development (OFID) for the Perseverance island infrastructure Phase II project.

The Seychelles delegation also held talks with other bilateral and multilateral partners on other initiatives and infrastructure projects for which Seychelles is seeking support.

On the sidelines of this year's annual meetings, the Seychelles delegation also held talks with the Bretton Woods institutions on various programmes being supported by those institutions, including the recently approved three-year Extended Fund Facility with the IMF, which is due for Board discussions in December, and the next Development Policy Operation with the World Bank.

Minister Laporte also chaired two important initiatives that are being supported by the World Bank, namely the Bank's Small States Forum, and the Accelerated Programme for Economic Integration (APEI), an initiative involving five countries in the region – Seychelles, Mauritius, Mozambique, Malawi, and Zambia -- focusing on reforms in the areas of trade facilitation and investment climate.

Besides Minister Laporte, the Seychelles delegation include Central Bank Governor (CBS) Caroline Abel and officials from the MFTI (Damien Thesee, Fatime Kante) and the CBS (Brian Commettant and Lenny Palit).

World Bank executive director for Japan calls on VP

11-February-2015

Masahiro Kan, the World Bank executive director for Japan who is currently on a familiarisation tour of countries of the region including Seychelles, yesterday morning paid a courtesy call on Vice-President Danny Faure at State House (our photo).
Following his talks with Mr Faure, Mr Kan left Seychelles yesterday afternoon.

http://www.nation.sc/article.html?id=244477

Seychelles signs landmark debt buyback agreement with Paris Club

28-February-2015
Minister Adam signs the agreement on behalf of the government of Seychelles. On the left is former Minister LaporteSeychelles’ efforts to combine marine conservation and liability management objectives through an innovative structure received a major boost on Wednesday night when it secured a landmark debt buyback agreement with the Paris Club and South Africa, during a meeting in Paris.

President James Michel revealed the news during his State-of-the-Nation Address in the National Assembly on Thursday.
President Michel welcomed the agreement of the Paris Club with Seychelles’ proposal as a historic and decisive moment in finding practical, market-based solutions to tackle climate change and support the Blue Economy.

“Our Blue Economy message is being realised through innovation and concrete action to reduce our vulnerability. Last night (Wednesday), Seychelles once again created history. Our proposal for a partial exchange of our debt in return for financing action to mitigate against climate change has been accepted by the Paris Club. This means that about US $30 million of our debt will be transferred in terms of a fund for the protection and development of our marine space – our Blue Economy. In addition, our partners are giving us a further 5% reduction in that debt. Through this debt exchange, we shall be better able to protect our oceans, create opportunities for artisanal fishing, reduce our foreign exchange payments, and keep more money within our economy,” said the President during the State-of-the-Nation Address.

President Michel thanked all of Seychelles’ partners and creditors who made the agreement possible, and who showed their confidence in the country.
“I thank, in particular, France and President Hollande, who expressed his support for the cause of Seychelles when we met in December last year.Once again Seychelles has made history. Seychelles has opened a door that other Small Island States can enter and follow. And today, I renew my commitment to seize every opportunity to ensure that the voice of Seychelles is heard. That the voice of Seychelles resonates. Although we are small, we can make a real difference. A difference that brings the best outcomes for Seychelles. And a difference that offers examples in terms of sustainable development, in terms of innovation, and in terms of options for all small island states.”

The unprecedented agreement means that Seychelles will become only the third country to buy back its Paris Club claims at below par through its market-based window, and the first to do so with funds provided by third parties. The agreed transaction will enable Seychelles to buy back over 90% of the debt maturities falling due to the Paris Club between 2015 and 2021 at a discount to face value. This represents the highest rate of creditor participation ever achieved in a market-based debt buyback transaction involving Paris Club debt.

http://www.nation.sc/article.html?id=244662

Understanding the financial statements of government

09-March-2015
The government of Seychelles is required by Article 154 (8) of the Constitution to produce annual financial statements (AFS) in respect of each financial year and submit them to the National Assembly. The Public Finance Management Act (PFMA), 2012 enlarges on these requirements so as to provide a framework for the production of the statements. The provisions in the new PFMA are modern and significant, particularly those in Section 28 -33. For example, for the first time the Act requires the government AFS to be prepared in accordance with the internationally accepted public sector accounting standards, i.e. IPSAS.

Secondly, the Act makes provisions for the auditing of the said statements to be completed within a timeframe of six months after the end of each financial year that is to say by the end of June. On the whole, the Act provides a more accountable and transparent framework for the public finance management across government.

Under these requirements, the government has prepared and published the AFS for 2013 with the opinion of the Auditor General thereon. In view that the AFS have been prepared under a new financial reporting framework (IPSAS), it is important to analyse these statements to gain a better understanding of the contents and the improvements they reflect. In general, the AFS for 2013 provide much more information than in previous years and thus are more useful to the readers, users and the public at large.

Cash flow statement (page 5)
The AFS 2013 include a new statement namely, a ‘cash flow statement’ which shows the cash position of the government at the end of the financial year. As a first step, the statement has been prepared for the government only, but in the years to come it will consolidate the cash position of all state enterprises as well and will render a comprehensive picture of the government body at the end of each year. The cash flow statement shows cash inflows and outflows in respect of various operations and activities of the government during the year and the net cash in hand and bank balances at the end of the year. From this statement, one can gain an understanding of the cash movements and the cash position of the government. The cash flow statement, taken together with other statements, ensures the integrity of the accounting system and accuracy of account balances.

Revenue and Expenditure – comparison of budget and actual (page 6)
The other new statement is the ‘comparison of budget and actual of revenue and expenditure’ showing, in summary form, the revenue and expenditure budgets and the actual realised for the year 2013. In this statement, the revenue is broken down into tax and non-tax sources and the expenditure as current outlays, interest payments, transfers to other governmental entities, capital expenditure, net lending and contingency. The primary balance (surplus) shown therein is the operational results of the government for 2013, before financing activities, which is akin to the gross profit in a private enterprise. The net surplus for the year is the balance credited to the Consolidated Fund.

Notes to Accounts (pages 7-21)
The notes are an integral part of and should be read in conjunction with the statements to gain a better understanding of the accounts. The notes in 2013 have been modified and expanded on to explain the adopted financial reporting framework, accounting policies and the account balances contained in the statements. One of the important notes in 2013 is the detailed ‘explanation of material differences between the budget and actual amounts’ on Page 13, prepared for the first time under the IPSAS. Unlike in previous years, in a comparison of budget and actual figures, the Ministry of Finance has explained the reasons for material differences in revenue collection, expenditure heads, contingency, etc. The information provided goes a long way to improve public transparency with regard to the fiscal policies connected to and management of the budget for the year 2013.

http://www.nation.sc/article.html?id=244739

Seychelles can now access contingent line of credit for disasters

09-March-2015


Seychelles can now access funds from a US $7 million contingent line of credit for immediate relief in the event that a national emergency is declared after a disaster.

Funds in the Catastrophe Deferred Drawdown Option (Cat DDO) will be available through a loan from the World Bank.
The main objective of the Cat DDO is to secure a country’s budget balance through the immediate availability of liquidity during natural disasters.
This would help reduce the impact of the disasters on affected people.

The line of credit will provide DDO as liquidity support for the government in the case of a natural disaster.

Preparations to put in place the necessary structure and facilities for Seychelles to access the loan started last year with the Ministry of Finance and Division of Risk and Disaster Management (DRDM) and became effective end of December last year but to date no drawdown has been made as there has been no disasters and therefore no state of emergency declared.

A senior disaster risk management specialist from the World Bank Group in Washington, Doekle Wielinga, is in the country since March 4 to help DRDM finalise its loan policy to bring it in line with the required norms.

Mr Wielinga also held talks with the Minister for Finance, Trade and The Blue Economy and the Minister for Environment and Climate Change.
On Friday he met again with the management of DRDM and the principal secretary for Finance Patrick Payet to finalise details of the policy.

“Once a national emergency has been declared the Ministry of Finance will be able to withdraw from the contingent line of credit the amount of funds it would deem necessary to address the emergency,” Mr Wielinga said.

Mr Wielinga also pointed out that having such a project in place will also help strengthen the disaster risk management framework.

Meanwhile the director general of DRDM, Paul Labaleine, has said the DRDM and the Ministry of Finance are working on various targets to continue to strengthen the country’s risk and disaster management programme.

http://www.nation.sc/article.html?id=244743

WTO congratulates Seychelles on conclusion of accession negotiation

25-March-2015


The World Trade Organisation (WTO) has congratulated President James Michel on the conclusion of accession negotiation of Seychelles to the world trade body, describing it as a “historic achievement”.

This was said by the chairperson of the Working Party of WTO, Hilda Al Hinai, when speaking to the press on the discussion they had after she and her delegation had paid a courtesy call on President Michel at State House yesterday.

“We congratulated him on this historic achievement and we are just waiting for the ratification by the parliament of the country’s package,” she said.

In its session yesterday, the parliament did ratify the legal instrument for Seychelles’ accession to the WTO.

The WTO chairperson also said they talked about the future involvement of Seychelles in WTO negotiations.
She said this year is going to be an important one for WTO as the organisation is going to have a ministerial conference in Nairobi.

“As an African country we expect Seychelles to be active and taking part in the Nairobi ministerial conference of the WTO,” she said.
Ms Al Hinai also paid a courtesy call on Vice-President Danny Faure.

http://www.nation.sc/article.html?id=244903

President Michel welcomes IMF delegation at State House

25-March-2015

A visiting International Monetary Fund (IMF) delegation paid a courtesy call on President James Michel yesterday at State House.

Also present at the meeting was the new Minister for Finance, Trade and The Blue Economy, Jean-Paul Adam.

The delegation, who were headed by Marshall Mills as chief of mission to Seychelles, also paid a courtesy call on Vice-President Danny Faure.

The delegation is expected to give a press conference during the course of its visit to Seychelles.

http://www.nation.sc/article.html?id=244902

WTO accession opens up new chapter for Seychelles’ development

26-March-2015


President James Michel yesterday signed the ratification of the World Trade Organisation (WTO) Accession Protocol on behalf of the Republic of Seychelles.
The signing, which took place at State House, follows the endorsement of the Seychelles National Assembly on Tuesday.

The ceremony was attended by Vice-President Danny Faure; the chairperson of the Working Party of the Accession of Seychelles to the WTO, Hilda Al Hinai; the WTO director of the Accessions Division, Cheidu Osakwe and the Legal Affairs Officer of the Accessions Division, Petra Beslać; Seychelles’ Cabinet of Ministers and the Seychelles chief negotiator for the WTO accession, Charles Morin.

The President said that by joining the WTO, Seychelles as a small island developing state, will bring additional value to the organisation as well as the people of Seychelles.

“The economic reforms that I initiated in 2008, have sought to strengthen our resilience in the face of potential global shocks. Joining WTO ensures that we are not bystanders while global processes are shaped and directed by others. It ensures that we can create more opportunities for our people while also defending their right to development. As a small island developing state, we are reliant on open access to trade in goods and services both to ensure that the basic needs of our people are met, and to ensure that we continue to create opportunities for wealth creation and prosperity,” said the President in his remarks after the signing.

The President added: “It is no secret that it is hard for small states to carve a niche for themselves in the global economy. But our achievements since 2008 show that we can mobilise the global economy to strengthen our position, to build our resilience and create our own opportunities.”

President Michel said that Seychelles is looking forward to working with the WTO secretariat in order to develop its capacity building and in empowering the private sector, especially the small and medium enterprises.


The President also spoke about the Blue Economy concept which he explained will enable the country “to transform our situation from price takers in the global economy to shapers of new models of development”.

“And to develop the Blue Economy we will need to leverage the research and technological support from across the globe. WTO is well placed to facilitate this access to the key drivers of our Blue Economy transformation. As we join this world trading body, we look forward to working with the WTO secretariat to further help us in building our capacity,” he added.

The President assured all its partners in the WTO that Seychelles will continue to bring forward momentum within the organisation and to ensure that trade and development can be linked in a meaningful way.

He said Seychelles would work to ensure through more transparency in international trading rules, that long-term investments are secure.

“I am convinced that WTO accession opens up a new chapter for Seychelles' development. A new chapter whereby even though we know we are still vulnerable to external shocks, we have many more tools with which to cope with these shocks. That we have many more tools to build other opportunities that ensure that our economies are fundamentally sustainable,” he said.

On his part, Mr Osakwe conveyed the organisation’s congratulations to President Michel after accepting the document. He highlighted that membership is a commitment.

“WTO membership is a commitment to reform. Reforms are tough, they are difficult, they are challenging but they are undertaken because governments believe that without pain there will be no gain. The President has spoken eloquently in his statement and there was very little to add except to say to you distinguished guest members of the Cabinet, that accession to the WTO is a commitment to trade integration, to the core values of the WTO which are the values of the market economy, transparency, good governance and the rules of law. This is what you have committed yourself to,” said Mr Osakwe in his remarks.

On behalf of the WTO delegation, he applauded the Seychelles government for this remarkable step which he said “has fired a shot throughout Africa into the trading system”.

“What you have done for your country is not only what has been for your country, but what has been done for Africa and what has been done to update the rules of the multilaterals trading system,” said Mr Osakwe.
President Michel's statement will be circulated today to all 160 WTO members.
Seychelles will become full member of the WTO thirty days after the signing of the ratification.

http://www.nation.sc/article.html?id=244914

Seychelles’ economy becoming more resilient, says IMF

27-March-2015


An International Monetary Fund (IMF) staff mission led by Marshall Mills has declared that the Seychelles’ economy is becoming more resilient.

The mission made the remark after visiting Seychelles from March 11 to 26 to conduct consultation discussions and assess performance under the second review of the Extended Fund Facility (EFF) Arrangement which has been going on with Seychelles since the economic reforms of 2008.

In a press conference held at the Seychelles Trading Company (STC) conference room yesterday afternoon, Mr Mills said the resilience is reflected in an improvement in the external sector, a strong fiscal position which has kept public debt on track to fall below 50 percent of GDP by 2018, tightened monetary policy in response to exchange rate depreciation and the inflationary pressures anticipated as a result.

Mr Mills, who was speaking in the presence of the Minister for Finance, Trade and the Blue Economy Jean-Paul Adam and the Central Bank Governor Caroline Abel, added that the country has met most of its quantitative programme targets for 2014. These included a surplus and increase in foreign exchange reserves which he said has boosted the resilience of the economy, with estimated growth reaching 3.3 percent last year.

He added that the external stabilisation which demonstrates the appropriateness of the authorities’ policy response and the importance of continuing exchange rate flexibility was also helped by positive external developments. Examples of these are a fall in fuel prices and a partial recovery in tourism.

Speaking of the future, Mr Mills said that the outlook for 2015 remains positive. He predicts that the current account deficit will contract as imports fall with lower demand and lower fuel and commodity prices. He added that although a currently weak Euro is putting some pressure on yields, tourism arrivals are rising moderately, and growth is projected at 3.5 percent, higher than previously expected.

In this view, he believes that the primary surplus targeted by the national budget remains attainable and appropriate, with international reserves expected to rise modestly in 2015 and maintaining adequate import coverage.

The IMF chief of mission has however warned that although the medium-term outlook is upbeat following Seychelles’ strides since the 2008 debt crisis, challenges still lie ahead. This is because Seychelles’ highly open economy remains vulnerable to external shocks, while he believes some deep-rooted structural weaknesses have not yet been fully addressed.

“Like many small middle-income economies, sustaining rapid growth and achieving high income status in Seychelles will require continuing structural reforms that enhance competitiveness and reduce risks,” Mr Mills remarked.

In this vein, he added that while he has welcomed measures to foster an environment conductive to private sector growth, he has also noted the weak operating results of certain public enterprises like the Seychelles Public Transport Corporation (SPTC), Seychelles Petroleum Company (Seypec) and Air Seychelles. He has consequently warned of the burden and risks that these public companies can pose to the public finances.

Mr Mills has therefore highlighted that safeguarding the hard-won economic gains of the past six years requires strengthening the governance and oversight of public enterprises. This includes ensuring a focus on their core mandates, preventing government financing of new mandates and preserving the space for private sector development.

During its visit, the IMF mission held discussions with President James Michel, Vice-President Danny Faure, Minister Adam as well as other ministers, the Governor of the Central Bank, members of the National Assembly as well as representatives of the private sector and the civil society.

As a result of the mission, the IMF executive board is now expected to discuss the completion of the review in June.

http://www.nation.sc/article.html?id=244927

SCCI discusses ‘pertinent’ business issues with IMF delegation

27-March-2015


Representatives of the Seychelles Chamber of Commerce and Industry (SCCI) recently met the visiting IMF (International Monetary Fund) delegation to discuss matters that is impacting on the business community.

The topics of discussion included ease of doing business, legal structure for PPPs (public-private partnerships), financial services strategy, increase in welfare cost, implementation of various government schemes, access to finance, government entity competing against private sector, production sector, 5% discount on the US $30 million debt owed to Paris Club members.

The SCCI chairman, Marco Francis, stated that the SCCI gives its support to the PPP schemes being initiated by the government. However, the SCCI felt that information on the projects or potential projects are minimal – and that it will be in the best interest of all if more information could be made available to the private sector in order to allow local investors an opportunity to invest if they wish to do so.

The high cost of doing business was discussed at length and the cost of electricity was determined as a major contributing factor according to the SCCI representatives.

Affordable credit and access to finance by SMEs (small and medium enterprises) were also matters of discussion. The SCCI chairman stated that government has done a lot in that direction, however, more should be done to inform the business community of the different schemes in place.

Bank loans, however, are still out of reach for the SMEs, the IMF delegation was told.
The IMF delegation pointed out that the country has come a long way since 2008 and that Seychelles is now seen as a country that can pay back its debt. And that foreign debt has gone down considerably compared to when the IMF supervised programme was first introduced.

The SCCI chairman assured the IMF delegation that a healthy dialogue is on-going and developing positively between the SCCI and government, and this policy of engagement is serving both the public and private sector well.

http://www.nation.sc/article.html?id=244925