Seychelles’ debt stock stands at R17.6 billion at third quarter end |26 October 2022
Seychelles’ debt stock stood at R17.6 billion at the end of the third quarter of the fiscal year 2022, representing about 63% of the gross domestic product.
These statistics appear in the Ministry of Finance, National Planning and Trade’s quarterly bulletin prepared and released by the debt management office.
According to the report, domestic debt remains the major component of the total debt stock, accounting for about 55.8%.
In comparison to the previous quarter, the total debt stock increased by R325 million or 1.9%, resulting in a 1 percentage point increase in the overall debt to gross domestic product (GDP) ratio.
This is mainly attributed to the external portfolio which increased by R307 million, or 4.1%, reflecting the continuous disbursement under the budget support loan from the International Monetary Fund (IMF) reform programme and the undertaking of a new loan from the Trade Development Bank in August.
The main component of the total debt stock is the central government debt, representing almost 95% of the stock and since no new guarantee was issued during the third quarter, this resulted in a decrease in guarantees debt stock by R104 million or 10.4% from the previous quarter.
The guarantees stood at R1,002 million in the second quarter but reduced to R898 million at the end of the third.
As for the external debt, it increased by R307 million in the third quarter because of the continuous disbursement of budget support loans from the IMF under the extended fund facility (EFF) programme.
An additional US $8.7 million was disbursed in July, coupled with additional disbursements under ongoing project loans.
In August this year, the government took a US $13 million loan from the Trade Development Bank (TDB) to repay the Etihad liabilities and release the security on the two twin otter airplanes.
The total external debt stock at the end of September 2022 amounted to R7.76 billion, equivalent to 27.8% of GDP, compared to R7,454 billion at the end of the second quarter.
Loans from multilateral creditors represent the majority of the stock at 65%, bilateral 16%, private 14%, while loans from commercial banks form the least of the external stock at 5% only.
The external debt has been divided under two main instrument types ‒ loans at R6,627 billion and securities at R1,134 billion.
Not only the external debt stock grew in the third quarter, the total domestic debt stock increased to R9.80 billion as at the end of September, 2022 and this signifies a 0.2% increase only compared to a 4.1% increase in the external debt stock.
Still according to the report, the increase is mainly attributed to a rise in the stock of T-bonds following the new issuance in August.
On the other hand, there has been a reduction in the stocks of T-bills, loans and other debt liabilities as government continues to service its debt.
The majority of domestic debt are in the form of securities, of which T-bonds make up for the bulk at 60.5% of the domestic stock.
The largest share of government securities for the third quarter are commercial banks at 59%, followed by ‘others’ which includes private individuals and others at 22%.
The Central Bank of Seychelles (CBS) holds 14% of government securities while ‘other financial institutions’ holds the remaining 5%.
As for interest rates on T-bills, it has been slowly increasing since the second quarter and the increase, the reports says, reflects the current market dynamics based on demand and appetite for government securities.
In the third quarter, the government incurred new debt. After government decided in 2022 to adopt a strategy of quarterly issuances of bonds in order to lengthen the maturity of the domestic debt portfolio, three T-bonds worth R200 million were successfully issued during the month of August, 2022. But the bonds were oversubscribed and a total of R294.2 million was issued.
Compiled by Gerard Govinden