06.20.11
Posted in Business and Economy, International Organisations at 4:33 pm by Robert Klien
The Executive Board of the International Monetary Fund (IMF) has completed the 3rd review under the 3-year Extended Arrangement, which became effective on December 23, 2009 in the amount of SDR 19.8 million.
As the review has been completed, it makes available to disburse SDR 3.52 million, which is about USD 5.6 million.
In 2010, the economy of Seychelles recovered strongly from the debt and balance of payments crisis in 2008 that was followed by global recession of 2009. Economic growth was driven by really high foreign direct investment (FDI) as well as a rebound in tourism. Inflation in the jurisdiction remained near 0. The offshore jurisdiction continued to rebuild its international reserves and reduce public debt. The economic program supported by the Extended Fund Facility (EFF) remains on track and all quantitative performance criteria at end-December 2010 were met.
In 2011, the policy mix under the program has been adjusted, which was in response to the global commodities price shock and the recent financial difficulties of Air Seychelles. The IMF expects that fiscal policy will be slightly looser to accommodate additional priority spending, while maintaining the targeted progress toward external stability and debt sustainability. The Fund stated that structural reforms are expected to concentrate on enhancing the financial sector by means of modernizing its legal and regulatory framework and restructuring and/or privatization of several state-owned financial institutions.
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06.16.11
Posted in Business and Economy, International Organisations at 8:03 am by Robert Klien
A declaration has been signed by the government of Seychelles has signed to launch negotiations for establishing a single integrated market for the 26 countries of the Common Market for East and Southern Africa (Comesa), East African Community (EAC) and the Southern African Development Community (SADC).
The declaration was signed after the conclusion of the 2nd Comesa-EAC-SADC tripartite summit. The summit was held on June 12 in Johannesburg, South Africa, under the theme “Deepening Regional Integration”. A Seychelles delegation lead by Vice-President Danny Faure took part in strategy discussions and endorsed the plan of action at the event.
Mr Faure, who is not only Vice-President but also the Minister for Finance and Trade, said: “This landmark initiative is an important step towards simplifying trade in the region and easing some of the administrative obligations for countries like Seychelles, who are members of more than one of these regional economic communities”.
Setting up a tripartite free trade area will provide a possibility to create a larger, integrated market with a combined population of approximately 700 million people, effectively creating the largest free trade area worldwide. This will encourage intraregional trade by establishing a wider market to increase investment flows, enhance competitiveness as well as develop cross-regional infrastructure.
It should be noted that the initiative is the response to a call from the African Union for regional economic communities to harmonise and better coordinate policies and programmes, which includes contributing to poverty reduction, economic growth and sustainable development for the continent.
Also, the summit adopted a roadmap for the setting up of the free trade area, with phase 1 due to be achieved by 2015.
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04.06.11
Posted in Business and Economy, International Organisations, International relations at 6:51 pm by Robert Klien
A visit to the Seychelles that was aimed to conduct discussions for the 3rd programme review under the Extended Fund Facility (EFF), has just been completed by an International Monetary Fund (IMF) mission.
The delegation that represented the IMF was led by Jean Le Dem. The IMF mission met with President James Michel, Vice President Danny Faure, Governor of the Central Bank of Seychelles Pierre Laporte, Principal Secretary of Finance Ahmed Afif, as well as other senior government officials, private sector representatives and parliamentarians.
According to Mr Le Dem, the Seychelles authorities go on making progress in the reform programme.
The IMF noted that economic recovery in 2010 strengthened – real GDP growth is likely to have exceeded 6% and consumer price index (CPI) inflation was almost 0. So, despite some technical delays in government payments to one parastatal, the programme is on track.
Mr Le Dem indicated that the modernization of the tax system is continuing, which includes important steps toward the launching of a VAT, scheduled for mid-2012. The introduction of the value-added tax is aimed to improve integration in the economy, broadening of the base, elimination of cascading, and increased efficiency and fairness.
The IMF EFF arrangement was approved on December 22, 2009 for SDR 19.8 million or USD 30.9 million. SDR 9.2 million out of this sum has so far been disbursed. SDR 3.52 million should be available upon completion of the 3rd review expected to be carried out in May 2011.
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02.05.11
Posted in International Organisations, Seychelles offshore jurisdiction at 12:14 pm by Robert Klien
Ten reports have been released by the Global Forum on Transparency and Exchange of Information for Tax purposes, hosted by the OECD. The reports evaluate jurisdictions’ commitment to tax transparency as well as examine whether information is made available and accessible to foreign tax authorities. Seychelles was one of the offshore jurisdictions evaluated by the Global Forum.
Seychelles, as well as Barbados, San Marino and Trinidad and Tobago fall short of the international standard. According to the OECD, they will need to implement the recommendations made in their reports before they move to the next phase of their evaluations.
The OECD report on Seychelles notes the following: “The review of the Seychelles showed deficiencies as regards the availability of ownership and accounting information in respect of offshore entities. In addition, powers to access information should be strengthened. Amendments to its legal and regulatory system are necessary in order for the Seychelles to qualify for the next phase of the evaluation.”
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01.25.11
Posted in International Organisations, Seychelles infrastructure at 5:14 pm by Robert Klien
According to the 2nd African Governance Report (AGR) of the United Nations Economic Commission for Africa (Uneca), the elderly in Seychelles spend the rest of their days in comfort and dignity.
The report urges other African countries to follow Seychelles’ example as regards looking after senior people.
Copies of the report were distributed among delegates who attended the launch of the 3rd AGR at the Seychelles Trading Company’s conference room held on January 14.
The report says: “Social policies geared towards the elderly ensure those who are independent have self-catering facilities provided by government in district homes”.
It stated that, in this regard, Seychelles has a policy for the elderly that should be emulated by others”. In most African countries, the quality, affordability and access to social services are inadequate.
It was highlighted in the report that Seychelles is the only African country with free medical care.
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01.14.11
Posted in International Organisations, Seychelles government, Seychelles legislation at 3:58 pm by Robert Klien
As a result of a substantial fiscal over-performance by the Seychelles in 2010 after 2 years of its stabilization programme, as well as taking into consideration a rapidly recovering economy on the tourist sector, has the International Monetary Fund (IMF) has issued a report with its recommendations to the jurisdiction. In its report, the IMF staff recommended completion of the Seychelles’ 3-year funding facility.
According to the International Monetary Fund, the strong and continued fiscal adjustment has restored the prospect of sustained medium-term growth and debt sustainability for the jurisdiction. The government revenues have created fiscal space for extra discretionary spending, and debt reduction accelerated. It is expected now that revenues exceed original budget projections by more than 4% of GDP in 2010, which would reflect mainly tax collections on turnover and imports that are stronger than predicted.
In the IMF’s view, tax reforms and improvements in revenue administration and expenditure management have helped Seychelles to sustain its credibility of the fiscal adjustment. The reform of the tax system that was launched at the beginning of 2010 has been continued, and its base has been broadened.
It was pointed out by the International Monetary Fund that the government of Seychelles is implementing comprehensive tax reforms with a view to further rationalize the tax system as well as to harmonize rates across sectors. The personal income tax rate was reduced from 18.75% to 15%, effective October 1, which is 3 months ahead of schedule. From January 1, 2011, there is one harmonized rate of personal income tax for all employees in all sectors, with the increase from 10% in the personal income tax rate paid by expatriates.
Preparatory work is underway for replacing goods and services tax (GST) with a value-added tax (VAT) in 2012. In accordance with the government of Seychelles, introducing the VAT is aimed to improve integration in the economy, broaden the base, eliminate cascading, as well as increase efficiency and fairness.
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11.10.10
Posted in International Organisations at 4:34 pm by Robert Klien
Last year, Seychelles plans to rejoin the WTO were discussed.
Charles Morin, chief negotiator for Seychelles’ accession to the World Trade Organisation (WTO), said that negotiations of the terms under which Seychelles is to join the WTO will begin this month.
He announced plans to submit Seychelles’ offers to the WTO. The 1st working party will enter negotiations with the organisation later this month.
Mr Morin said: “There is no way of saying what to expect. We will have to see what the WTO member states are requesting from us and to what level they expect to see our goods and services offers open up”. He also noted that the 153 member countries of the WTO have been looking at the Seychelles’ Memorandum of Foreign Trade Regime (MFTR) and asking questions about it. The United States, Canada, Australia and the EU nations were the main countries to ask questions about Seychelles before its joining the WTO.
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11.04.10
Posted in Business and Economy, Diplomatic missions, International Organisations at 3:19 pm by Robert Klien
According to the International Monetary Fund (IMF), the economy of Seychelles is expected to grow by more than 6% in 2010 due to its government’s track record of sound fiscal and monetary policy management.
In May 2010, the IMF suggested that the economy of Seychelles has shown strong resilience to global financial shocks of the year 2009 and its economy is recovering faster than expected from measures taken to adjust it. In October 2010, the IMF mission assessed the Seychelles’ economy and stated that the Seychelles’ economy continues to recover strongly.
Jean Le Dem, leader of the IMF mission, said: “Its far-reaching economic program, supported by the IMF, under which the government removed all exchange restrictions, floated the currency, liberalized interest rates, introduced a modern monetary policy framework, and significantly tightened fiscal policy, has borne fruit. Inflation has fallen from over 30% in 2008 to low single digits and the exchange rate has stabilized. It also helped Seychelles successfully restructure most of its external debt obligations, returning Seychelles to a path towards sustainable debt levels.”
Le Dem suggested that prospects for 2011 are favourable. He also urged the jurisdiction to continue with its ambitious agenda of structural reforms, including the modernization of the tax system aimed to usher in a value-added tax (VAT). The government launched a comprehensive reform of the tax system with the 2010 budget, of which the 1st stage was the introduction of a revised Business Tax Act from January 1, 2010, while the 2nd stage has been the introduction, from July 1, 2010, of a withholding-based personal income tax (PIT) on wages to replace social security contributions. VAT will be introduced in Seychelles from January 1, 2012.
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10.30.10
Posted in International Organisations, International relations at 12:03 pm by Robert Klien
Former President of Seychelles James Mancham is attending the European Centre for Peace Development’s (ECPD) 6th international conference on Human Security Concept Implementation that is held in Croatia.
The opening ceremony was attended by Professor Ivo Josipovic, President of the Republic of Croatia; Ivan Jakovic, President of the Istra region government; John Maresca, rector of the University for Peace established by the United Nations in Costa Rica; and Professor Albert Maes, vice-president of the ECPD Council and chairman of the conference.
Mancham was chosen to deliver an opening address at the conference. In his speech, Mancham highlighted the need for a new world leadership where money is dedicated to peacekeeping. It should be noted that he was recently elected as a member of the council of elders of the Common Market for Eastern and Southern Africa.
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10.20.10
Posted in Business and Economy, International Organisations at 1:03 pm by Robert Klien
According to the head of the International Monetary Fund’s mission to Seychelles, Jean Le Dem, the juridiction’s economy continues to recover strongly. Its growth is expected to exceed 6% in 2010.
The IMF mission has been in Seychelles since October 15 with a view to hold the discussions for IMF’s Article IV consultation as well as to do the 2nd programme review under a USD 31 million Extended Fund Facility (EFF) approved in December 2009.
Mr Le Dem said that Seychelles has successfully restructured most of its external debt obligations. According to him, “the economy weathered the global economic crisis of 2009 well and has rapidly recovered this year on the back of a rebound in tourism, sizeable foreign direct investment and a widespread pick-up in the domestic economy”. He stated that very tight fiscal policy in 2009 has been relaxed, though “buoyant revenues are expected to contribute to a primary surplus of 9.4% of GDP for 2010, two percentage points above the full-year programme target, providing welcome fiscal space for debt reduction and priority spending”.
The International Monetary Fund has confirmed that the 1st-generation reforms have gone well, so, the 2nd-generation reforms are needed to create a good environment for the private sector
The 3rd review programme is due in March 2011.
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