Seychelles begins participating in IMF’s GDDS

Posted in Business and Economy, International Organisations, Seychelles offshore jurisdiction at 1:12 am by Robert Klien

On December 18, 2006, Seychelles began participating in the International Monetary Fund’s (IMF) General Data Dissemination System (GDDS), which is its major step forward in the development of its statistical system.

The Governor of the IMF for Seychelles, and also Minister for Finance, Mr. Danny Faure, considers improvement in the quality and timeliness of economic, financial, and social statistics to be very essential for economic and social policy, as well as for monitoring and assessing the government’s development programs.

The Minister sees the importance of the development and improvement of data-producing agencies’ methodological, compilation, and dissemination practices that make them consistent with international codes and standards, while the Seychelles is undergoing rapid economic and structural changes. It is essential for the country that statistics is going to become more reliable and timely.

Director of the IMF Statistics Department (STA), Mr. Robert Edwards, welcomed Seychelles’ GDDS participation and suggested that it would be a milestone in the country’s statistical development as the Seychelles would be able to enhance its statistical capacity, especially as regards macroeconomic and socio-demographic statistics.

Established by the IMF in 1997, the GDDS is a framework aimed to help countries produce comprehensive and accurate statistics for economic policy. Seychelles is the 88th its participant.


Seychelles’ possible WTO accession workshop

Posted in International Organisations, International relations at 10:26 pm by Robert Klien

Seychelles’ possible accession to the World Trade Organisation (WTO) has already been discussed. New information on this matter has recently emerged – stakeholders considering Seychelles’ possible accession to the WTO completed their 3rd consultation workshop.

With the assistance of experts from the WTO and other organizations, the participants of the workshop looked at various issues including whether accession would be beneficial, faced with possible demands such as the lowering of tariffs in fisheries.

One more question to be resolved was if the accession should be considered in parallel with Seychelles’ role in Common Market for East and Central Africa, Comesa, or separately.

At the opening of the 3rd workshop recently, the director general for the Trade Division, Charles Morin, said that it differed from the previous ones. It considered the findings of 4 independent consultants funded by the European Commission, and 3 of them were present in order to advise on the process of Seychelles accession.

When the Minister for Finance, Danny Faure, opened the WTO accession workshop at the end of October, he emphasized the need to be mindful of the experiences of other countries which either have joined or are planning to join the multilateral trading system. He also said accession to the WTO would have benefits if the Seychelles manages to harness them. At the workshop, the Minister saids that the process would require co-operation, vigorous interaction and exchange of information.


Seychelles participates at ACP Heads of State Summit

Posted in Business and Economy, International Organisations, International relations at 3:45 pm by Robert Klien

The 5th Summit of the Africa, Caribbean, Pacific (ACP) Heads of State and Government took place in Khartoum, Sudan on from December 7-8, 2006. It was preceded by preparatory meetings of the ACP Group on December 3-6, 2006. The Seychelles and its President were represented at the Summit by Patrick Pillay, Minister for Foreign Affairs and International Cooperation.

Besides Minister Pillay, the summit was attended by Barry Faure, the Seychelles Ambassador to Brussels, and 2 officials from the Ministry of Foreign Affairs and International Cooperation, principal economist Audrey Dine and economist Terry Romain.

The theme of the 5th ACP Summit was “United for Peace, Solidarity and Sustainable Development”. This was an opportunity for ACP countries leaders to discuss and undertake resolutions on matters related to the sustainable social, economic, political and environmental development of ACP countries, as well as to talk about the future of the Group.

The Group was especially concerned about the following 5 specific issues:

  • Peace, Security and Stability;
  • Sustainable Development;
  • Multilateralism;
  • External Relations;
  • Future of the ACP Group.

As to the Seychelles, it stood in solidarity with the other ACP countries drawing the attention of the international community on numerous development challenges that ACP countries are faced with.

The Seychelles’ delegation raised 2 issues essential for the sustainable development in many of the Group’s countries as well as in the Seychelles, which received the Group’s unanimous support.

As now the Seychelles has established its diplomatic presence in Brussels where the Secretariat of the ACP Group is situated, the country will be able to participate more actively in the ACP Group’s deliberation and initiatives.


Seychelles has debts with multi-lateral organizations cleared

Posted in Business and Economy, International Organisations, Seychelles offshore jurisdiction at 3:12 pm by Robert Klien

Currently, the Seychelles is known to have a good credit rating in the world because the country is not in arrears regarding any debts with multi-lateral organizations. The Seychelles standard of living continues to improve – however, it is out of earnings, not out of debts.

In the end of November, Andrew Bainbridge, the managing director of Barclays Bank for Africa and the Indian Ocean, commented on Seychelles current economic status at State House. Coming to this country over the last 7 years, he has seen new improvements to the economy progressing.

At announcing the Appropriation Bill 2007, Lekha Nair, the principal secretary for Finance, made a confirmation that the Seychelles had cleared all its debts to multi-lateral organizations, which improved its international profile. As a result, financial organizations are willingly studying areas to finance projects in the Seychelles.

African Development Bank (ADB) is one of such organizations – and it has already dispatched a delegation here. The Seychelles does not owe ADB anything now.

Also, the state has cleared its arrears with the International Monetary Fund (IMF).


Seychellois Budget 2007 Framed. Part 2

Posted in Business and Economy, Seychelles offshore jurisdiction at 10:05 am by Robert Klien

As it has already been discussed, on December 5, 2006 the Minister for Finance, Danny Faure, delivered his Budget Address for 2007, which was his first budget address. Framing the national budget 2007 provides new opportunities of growth and success of the country and its people.

It goes without saying that in his Budget Address the Minister touched discussed the budget outcome for 2006. So, according to him, the budget outcome for 2006 is a surplus of 5% of GDP or around SR 186.9 million, which about SR 9 million above estimates for the year of SR 177.9 million.

The Minister also indicated that this was the 4th surplus Budget since 2002. So, this is the longest unbroken string of surpluses since the establishment of the 3rd republic.

Mr. Faure discussed the government’s expectations to collect SR 2.32 billion in revenue this year, exceeding the projected revenue by over SR 389 million, or a 20% increase.

The 4 main areas where the collections exceeded the budget were in lease of land, dividends from parastatals, indirect tax and trades tax.

As to 2007 fiscal objectives, in accordance with the Minister’s address, the aim of the 2007 budget is to achieve a surplus of 7% of GDP in order to improve the fiscal position of government and to further sustain the debt reduction program.

The Minister said that for 2007, total revenue was budgeted at SR 2.42 billion, an increase of SR 105 million on the revised estimate for the current year. As to total outlays for 2007, they are estimated at SR 2.095 billion, a decrease of SR 32 million over the revised estimate of SR 2.13 billion for 2006, a 1.5% cut. According to Mr. Faure, the surplus for 2007 is estimated to be SR327.066 million, or 7% of GDP.

The 2007 Budget is based on several medium term assumptions, which are GDP growth of 4.5% for 2006 and 5% for 2007 (as per IMF estimates); tax revenue to be not more than 30% of GDP; Ministries/Departments outlays to be around 30% of total budget; Capital expenditure capped at SR 200 million; recurrent expenditure to be not more than 40% of GDP; primary surplus (surplus without interest) should be at least 12%; and overall surplus should be at least 5% of GDP to service all loans.

To conclude, the Budget Address was not just informative – Minister Faure really also addressed the numerous challenges which the Seychelles needs to confront to succeed with economic growth.


Seychellois Budget 2007 Framed. Part 1

Posted in Business and Economy, International Organisations, Seychelles offshore jurisdiction at 3:19 pm by Robert Klien

The national budget 2007 framed for the future provides new opportunities of steady growth and success of the Seychelles and its people.

Minister for Finance, Danny Faure, delivered his Budget Address to the National Assembly on December 5, 2006. Not only members of the National Assembly, but also an important delegation representing the private sector was listening listen to his Budget Address.

The Minister for Finance considers that the economy of the Seychelles is doing fine and it is on the right track, which, by the way, has been endorsed by the visiting the International Monetary Fund and African Development Bank delegations.

The Minister is cautious and realistic enough to realize that there is more to fine-tune as the country continues to improve internal conditions of doing business as well as of harnessing the new role of the private sector. So, submitting his 2007 Budget was made with a realistic approach to realistic issues, understanding the government’s responsibility for the well-being of the country and its people.

In accordance with the Minister, 2006 is experiencing a continuation of the economic recovery for Seychelles which started in 2005, and this is a result of government policies implemented in the past three years.

Real GDP growth for the year 2006 is forecast at 4.5%, from an expansion of 1.5% in 2005. Danny Faure considers that this growth is underpinned by a general expansion in aggregate demand, mainly coming from strong increases in investments and private consumption. This reflected households, and has been available because of a wider variety of commodities on the market and the recent increase in salaries.

Mr. Faure also discussed the improvement of net external position of the banking sector, which improved by a remarkable R212 million from December 2005 to September 2006.

Following the rapid changes in the economic landscape given the implementation of reforms, the government and the Central Bank are monitoring the situation in order to make sure that the transition to a more liberalized economic environment is smooth.

According to Mr. Faure, the level of foreign direct investment (FDI) inflows into Seychelles in 2006 is projected at USD 114 million, and indicators point to further growth in at least the next 3 years. These inflows are mainly directed to the tourism sector, more particularly the high yield establishments, involving also internationally known companies.

The Minister for Finance announced that services sector remained the most important for the economy of the Seychelles.


Seychelles economy improvement

Posted in Business and Economy, International Organisations, Seychelles offshore jurisdiction at 2:20 am by Robert Klien

After year 2005 that was quite hard for the Seychelles, the country has been experiencing an essential economic growth of 4.5% this year. The economic recovery can be explained not only by a successfully growing tourism industry, but also by reforms of the previous years.

The economic outlook of the situation in the Seychelles was presented by the International Monetary Fund (IMF) mission after its 2-week visit (November 8-21, 2006)as concluding statements.

It is worth noting that the Seychelles’ people were delighted with and proud of the Statement by IMF Staff at the Conclusion of the 2006 Article IV Consultation Discussions with Seychelles. The IMF said that “the economic situation is improving, with strong tourism arrivals and construction activity driving the recovery”.

But, as it has been mentioned above, economic reforms are by no means of less significance. “Following the July 2006 presidential election, the authorities are implementing a package of policy reforms aimed at addressing Seychelles’ key macroeconomic imbalances.” These policies meant by the IMF are mainly new currency exchange guidelines, repayment of external debt and banking reforms. However, the IMF considers the recent reforms not enough to secure long-term growth. Therefore, the International Monetary Fund suggests implementing further structural reforms regarding employment, infrastructure, further privatisation, and price controls.”

Also, the IMF considers that record inflows of foreign direct investment (FDI) in the country indicate renewed confidence in the country’s economy.

So, currently, the Seychelles has something to boast of – it has one of the strongest economies in Africa; but its economy is still continuing to improve, to enhance its competitiveness, to maintain its growth.