IMF reports progress in Reform Program in Seychelles

Posted in International Organisations, International relations at 1:54 pm by Robert Klien

On August 4-15, 2009, a mission from the International Monetary Fund was held in Victoria in order to assess performance at end-June under the Stand-By Arrangement with the Seychelles.

The IMF mission was led by Paul Mathieu. It met with President James Michel, Minister of Finance Danny Faure, and Governor of the Central Bank of Seychelles Pierre Laporte. Also, the mission met with representatives of the private sector, parliamentarians, and civil society.

The statement was issued by the IMF delegation at the conclusion of the Mission that said that strong progress is being made by the authorities of the Seychelles in their reform program. The IMF announced that “the program is on track and is achieving its economic stabilization and reform objectives”. According to the statement, “ Aprudent and well-balanced monetary and fiscal stance has been effective in rapidly reducing inflation to the low single digits. All end-June 2009 quantitative targets under the program were met with margins and structural reforms are being implemented with determination. The economic downturn, reflecting primarily a sharp drop in tourism earnings, is easing and the decline in real GDP is likely to be somewhat less than earlier feared.”

The following was noted in the statement: “Looking ahead, the key objectives are to consolidate macroeconomic stability by maintaining tight fiscal policy, and progressively putting in place supporting structural reforms to remove constraints to growth and improve the performance of the public sector. Strong progress on inflation reduction and the appreciation of the rupee has permitted a gradual easing of monetary policy. The preparation of a fundamental reform of the tax system, a major reinforcement of control over parastatal performance, and strengthening of the financial system are proceeding. The tax reform aims to harmonize rates, broaden the tax base, and raise self-compliance, while maintaining the overall tax take.”

USD 12.3 million out of the USD 24 million IMF arrangement approved on November 14, 2008, has been disbursed. About USD 1.4 million is available with confirmation that the end-June performance criteria have been observed.

It is worth mentioning that the 3rd program review mission is expected in October 2009.


Pan-African festival to enrich Seychelles

Posted in Seychelles Culture at 1:36 pm by Robert Klien

In July, 37 people from Seychelles took part in the 2nd Pan-African Cultural Festival in Algeria. Recently, they have met to review what their enriching experience. The group of 37 people included musicians, painters and choreographers.

The meeting was held at the International Conference Centre on August 14. It was attended by Minister for Community Development, Youth Sports and Culture Vincent Meriton and principal secretary for Youth, Sports and Culture Denis Rose.

Minister Meriton said that the festival held after a gap of 40 years was one of the biggest cultural activities on the continent. According to him, the festival is a platform to expose local artists as well as encourage people from the continent to buy Seychellois products and use Seychellois services.


Seychelles’ Economy doing better than IMF predicted

Posted in Business and Economy, International Organisations at 10:08 am by Robert Klien

The economy of Seychelles is doing better than it was predicted by the International Monetary Fund (IMF), so GDP for 2009 should fall by about 8% instead of the 11% forecast.

In December 2008, the International Monetary Fund announced that the Seychelles’ heavily-indebted economy will contract 0.5% in 2009 while inflation will rise until the 2nd quarter of 2009. The IMF said that

On August 14, 2009, Paul Mathieu, the head of an IMF economic performance evaluation team, spoke at a press conference attended by Finance Minister Danny Faure, principal secretary in the ministry Ahmed Afif and Central Bank governor Pierre Laporte.

He said that the revised forecast is based on a better performance by the tourism industry, and now visitor arrivals were expected to drop by only 15% (not by 25% predicted earlier). Also, he noted that fishing is doing better because it was threatened by piracy earlier but the problem is being addressed now.

According to Mathieu, Seychelles is making a strong progress in its economic reform programme. He announced that the International Monetary Fund will now disburse USD 1.4 million as part of the USD 24 million arrangement approved when the reforms were launched in Seychelles in November. It should be noted that USD 12.3 million has already been received.

He said, “The economy is gaining strength and the decline in the real GDP that we forecast earlier at 11% will now be somewhat less than it appeared in May”. “We do not have a final figure yet, but the decline will probably be between 8% and 9%”.

The 3rd IMF review mission, based on end-September performance, is expected in October 2009. The mission will coincide with talks on a medium-term structural reform programme to be supported by a 3-year arrangement under the Extended Fund Facility.


Suez Energy to manage PUC

Posted in Business and Economy at 11:04 am by Robert Klien

The private Suez Energy company is to manage electricity and water supplies. But electricity and water supplies will still be owned by the government. This was announced by Minister Joel Morgan on August 12.

According to the Minister for Environment, Natural Resources and Transport, with a view to improve Public Utilities Corporation (PUC) operation, its management will be placed under Suez Energy. He made this announcement at a press conference that was held in the presence of the PUC’s deputy chief executive Joel Valmont and the Seychelles Energy Commission’s chairman and chief executive Philippe Morin. The transfer of the corporation to the ministry and the appointment of the new commission followed the announcement.

Morgan added that “The government has decided to reinforce the PUC’s management with the help of the Suez company for a 2-year period to improve the operational efficiency of the corporation and eventually to hand over full responsibility for the company to Seychellois”. He suggested that the management of the PUC is doing a good job but it is meeting constraints in human resources and materials and this affects production costs and efficiency.


Seychelles discusses rejoining WTO

Posted in International Organisations, International relations, Seychelles offshore jurisdiction at 12:55 pm by Robert Klien

According to assistant registrar general Brassel Adeline, Seychelles is making its deciding on the best possible agreement under which it might join the World Trade Organisation (WTO). The jurisdiction’s intention to join the WTO has been discussed here last year.

During the 3-day workshop on intellectual property rights that is currently being held at the Coco D’Or Hotel, Beau Vallon, assistant registrar general said, “We must see how we would negotiate to get the best possible deal so that as a small nation we benefit to the maximum through the WTO”. According to him, after the workshop, it will be better known what advantages Seychelles will have under a treaty it might sign.

Attorney-General Ronny Govinden said that there will be fresh negotiations on an economic partnership agreement with the EU when the talks about joining the WTO will be reopened. He informed the delegates that the jurisdiction is seeking help from the World Intellectual Property Organisation (Wipo) in order to draft new intellectual property rights laws that would cover geographical indications, layout designs of integrated circuits and undisclosed information. He said, “Seychelles respects intellectual property rights and regards laws and other measures to protect them as important aspects of long-term economic development”.

It should be noted that customs, police and trade officers, economists and other staff from the ministries of Finance and Foreign Affairs attended the workshop.


Budget support and economic governance reform program approved for Seychelles

Posted in Business and Economy, Foreign investments at 12:12 pm by Robert Klien

The African Development Bank has approved 15 million loan for Economic Governance Reform Program in Seychelles (EGRP), which will facilitate reform implementation, macroeconomic stability and growth, rebalance the economy and improve economic and financial governance.

This is the first budget support operation of the Bank in the Seychelles, which is expected to give the following results: improved budget formulation process and execution; reinforced budget oversight and transparency; improved efficiency and transparency in public procurement; improved public debt management and business climate. It will support government’s macroeconomic and financial reform program for years 2009-2010, in particular, the public finance management changes which will provide for the transparent and efficient management of public resources.

One of the purposes of the program is to increase the role of the private sector as a driver for development, and to create growth and employment opportunities within it. 

The Bank Group’s budget support program and the loan is guided by a number of studies, among them the 2009-2010 Seychelles Interim Strategy Note, the 2008 Country Project Portfolio Review Report (CPPR) for Seychelles, the IMF Article IV Consultation and a Standby Arrangement Staff Report (2008), the IMF report “A Strategy for Strengthening Budget Management (2008), the EC-financed 2008 “Seychelles Public Financial Management Performance Report”, and UNECA 2007 report on the “State of Good Governance in the Republic of Seychelles”.