Govt hopes to use R300m surplus for public projects |18 October 2010

There has to be an agreement with the International Monetary Fund (IMF) for it to spend the money, however.

Principal secretary for finance Ahmed Afif said this last week during a meeting between Vice-President Danny Faure – in his capacity as Finance Minister – Central Bank of Seychelles governor Pierre Laporte and an IMF team led by Jean Le Dem at Liberty House.

Also present were officials from the ministry.

The IMF mission is here to do the second review of the ongoing economic reforms under the Extended Fund Facility approved in December 2009.

Mr Afif said the team is evaluating government performance in the reforms, which is above target.

“For 2010 we had a target of a 7.4% budget surplus, which is the revenue minus expenditure without including interest, expressed as a percentage of the country’s GDP,” he said.

“But by the end of August we had already achieved 8.9%, which means we are above target and we are likely to be above target until the end of the year.

“The government feels there are pros and cons of being above target, but we believe strongly that we should invest the surplus money where the government has primary responsibilities, such as in utilities, health and education and, to some extent, house construction.

“We will meet the IMF targets but at the same time – for the sacrifices people have made and to sustain economic growth – it is necessary that we ensure the people benefit.”

Before the reforms were launched, Seychelles had external debts above US $800 million but they now stand at US $460 million, while domestic debts which totalled R4.2 billion now stand at R3.8 billion and the government is not in arrears with the repayment of either, he said.

The country’s international reserves are now US $177 million, which is enough for all imports for two months.
The IMF team is here until the end of October and will host an economic symposium for members of the National Assembly.