Continuation of Budget Address delivered by Naadir Hassan, Minister for Finance, National Planning and Trade, on Friday November 4, 2022 |07 November 2022
11.1. The agricultural sector
Mr. Speaker, we are also placing a lot of emphasis on extending the services our officers can offer to farmers, to bring about the transformation we want in the agricultural sector, whereby our farmers will have better access to information, technology and research results, with the aim of continuously increasing local produce. There has been some restructuring in this section to improve the services offered to our farmers, and this also includes more training and capacity building, and the collection and diffusion of information.
The department of Agriculture is also continuously adjusting the functions of the Agricultural Store to make it more consistent with the needs of our farmers. The Agricultural Store is also being modernized so that it can deliver an improved and more efficient service, and there has been a lot of efforts put into establishing better contact with new suppliers so as to improve on the quality, quantity and consistency of basic products in storage, as well as a constant supply.
The department of Agriculture is also reviewing the farmers’ production plans and analysing the difficulties they are faced with. We are also encouraging sustainable production through the use of modern technology, for example, growing crops under cover using ‘High tech Crop Production’ system.
A key strategy maintained by the Agricultural Department for the past two years is to support the subventions which are being revised to ensure that the scheme becomes more targeted, efficient and sustainable. A sum of R30 million has been budgeted under this scheme for the 2023 fiscal year, compared to R98.9 million in 2022.
An allocation of R40.5 million has been budgeted under capital projects in 2023 for the Agriculture department to finance various projects at district level, which will have a direct impact of local farmers, such as road projects and the renovation of the Victoria market. A total of R10.2 million has also been budgeted for the project to build a new abattoir.
Among the projects identified for implementation in 2023 are:
- The construction of the Anse Boileau and La Retraite markets
- The improvement of the irrigation system
- The cleaning of rivers and marshes that border with agricultural land
- The renovation of the Victoria Market
- The renovation of the extension service building
- The improvement of the Bulk Store on Praslin and Mahé, and also the Requisition Store on La Digue – R4 million
Government has also made a provision of R3 million under the Agricultural Development Fund. This will be increased to R10 million and R15 million in 2024 and 2025 respectively.
11.2. The fisheries and blue economy sectors
As has been announced in the previous budget, government’s intention is to increase value additions in our fisheries and blue economy sectors. To support this strategy, government is making an allocation of R25.3 million in 2023 and R50 million in 2024 for the development of Ile Du Port infrastructure. We need to invest in the infra-structure of this sector to ensure more growth in the mid-term.
The last ‘Blue Bond’ transfer which is equivalent to R30.1 million, will be made to the Blue Investment Fund with DBS. The first project, amounting to a total of US $3 million, has been approved under this fund in 2022. The balance of this fund at the beginning of 2023 will thus stand at US $9 million. We are thus encouraging investors to seek their financing under this fund because of the following preferential conditions:
- A 4 percent interest rate
- A 15 year repayment term
- A personal contribution of only 10 percent
Mr. Speaker, The Seychelles Fishing Authority (SFA) expects to begin the construction of a building for its 240 employees. During 2023, SFA will also begin its projects that will benefit this sector:
- A gear store at Glacis
- The resurfacing and improvement of irrigation facilities
- A market and gear store at Anse à la Mouche
- A container platform at Bel Ombre
- A holding chiller at the airport
- A container platform and a mini warehouse at Providence for a sum of R1.7 million and R6 million respectively.
To enable growth and diversification in this sector, a new tax measure that will benefit the actors in fish processing and aquaculture will be announced later.
11.3. The digital economy sector
Mr. Speaker, in this economic transformation, the development of the digital economy remains a key one, because with technology, everything becomes easier, more efficient, more accessible, transparent, and most important, it allows you to deploy your resources where they are really necessary. The adoption of technology in our everyday transactions allows our population better access to services and more opportunities.
Mr. Speaker, government is continuing its investments in projects that support the improvement of technology infra-structure in the country. Government has made an allocation of R424.6 million over the medium term and this represent 1.4 percent of GDP. This allocation include a sum of R145.1 million in the 2023 budget. The implementation of the electronic ID system became operational towards the end of October 2022. This system is the key to our development agenda in the Digital Economy project.
In 2023, the emphasis will be on interfacing government systems and the private sector, to use the Sey-ID platform. Services which are already accessible online are the registration of businesses and associations, and applications.
It is in that respect that my ministry has just launched its digital platform so that the auction sale of government goods which have been approved, can be made on this platform. The first auction sale was made in October, and the technology adopted really improved this service and gave the public better access to it.
Next year, we are going to adopt a register of all individuals or businesses that participates in government tenders. Having such a register will help to reduce the procedures that the bidders have to undergo in order to participate in government tenders.
We expect that the health information system will come into operation towards the end of 2022. Government will open the tender for the new Information System to integrate with the Integrated Financial Management Information System in 2023. This project is expected to be completed by 2025.
Mr. Speaker, the biometric passport project will be completed before the end of 2022. This new passport system will help to improve Seychelles’ security details according to the standards of the International Civil Aviation Organization (ICAO). This includes R29 million which has contributed to the new system itself, and R8.4 million which has gone towards the digital signature system for biometric passports to be compatible to the ICAO standards. The implementation details will be communicated to the public by the Ministry for Internal Affairs.
Mr. Speaker, in our endeavour to develop our digital economy sector, it is necessary that we put in place, a legal framework to ensure its protection and operation.
To that effect, a new data protection bill will be proposed to the National Assembly during the first six months of 2023. This new bill will protect the individual’s personal data. We will need to do a lot of sensitization to educate the public on the provisions of this law. This law will help to make investors more confident about the protection of their personal data, as in other countries.
A new Communications Regulations Authority will be created under the Communications Bill which is before the National Assembly. A sum of R9.3 million has been projected for this new authority. This bill will address a new legal framework for the telecommunications sector, and to address anti-competitive practices. A new initiative that this new authority will work on in 2023 concerns the implementation of the ‘number portability’ procedure, which we expect will put clients in a better position to change their operators, which will also help to create more competition.
We need to work on the development of as many government services as possible to make use of information technology as a platform for their procedures. We recognize the fact that the Department of Information Technology and Communication will not be able to take this up by themselves. Thus, government has made a provision of R6.5 million to put in place a structure for outsourcing the development of these projects.
11.4. The financial sector
Mr. Speaker, government continues in its commitment to improve the structure of the anti money laundering jurisdiction, and to combat the financing of terrorism (AML/CFT). At the end of September, this year, the committee responsible for improving the national coordination and ensuring that weaknesses that were identified in the ‘Mutual Evaluation Report’, are addressed in a timely manner, submitted another report to ESAAMLG to propose improvements in another 8 ratings among the remaining 11 weaknesses. This proposal will be discussed in the ESAAMLG meeting in April 2023. During 2023, the frameworks to address the other three weaknesses will be worked on and the committee will submit its report to ESAAMLG to propose an improvement on those three ratings in 2024.
Mr. Speaker, as we know, Seychelles is in ‘Annex II’, known as the ‘grey list’ of the European Union list of jurisdictions which do not cooperate on tax issues. This is because the European Union is waiting for the OECD to visit Seychelles, in order to evaluate the efficiency of our framework for the exchange of tax information. This evaluation, which is called a supplementary review, has already begun, and OECD will visit Seychelles in December 2022 to discuss with government and the private sector, the progress made after the relevant laws have come into effect. This procedure will be completed when Seychelles’ report is discussed in the OECD’s ‘Peer Review Group’ in June 2023. We expect that the European Union will consider this report in its review in October 2023.
The Central Bank will ensure that the national legal framework for payments is based on international standards and best practices. The national law system for payments and its regulations have been reviewed to ensure that the new policy addresses the weaknesses that were identified, and that they are covered by a legal framework. The propositions in this policy will be discussed with the relevant partners before the end of 2022.
Mr. Speaker, the Central Bank will also assist this sector with new bills such as the e-money bill which will increase financial inclusion by promoting access to affordable financial services and products. The Central Bank will also improve the infra-structure of the payment system and the central securities depository, which will offer better security reduce risks. The Central Bank remains committed in its efforts to modernize the national payment system, to bring about more efficient payment facilities which are more convenient, reliable and affordable. The Central Bank aims to remove the cheque as a payment method from the market. Furthermore, with the aim of increasing the use of electronic services and products in the country, the Central Bank, with the help of a consultant, will undertake a study to assess the affordability and reliabilityof the internet connection and network in Seychelles. This study is expected to start in 2023.
The Central Bank is also working on a framework for formulating a Regulatory Sandbox on new technology. Its employees are also exchanging knowledge with other countries in preparation for the implementation of this new technology. The Central Bank is also working with other partners on the creation of an innovation hub to get the involvement of companies and the relevant competent authorities in addressing regulation problems and seek guidance on service conformities and innovative financial products.
Mr. Speaker, the Central Bank is also working on the implementation of a new Credit Information System (CIS) and its accompanying legal framework for better cover for this sector. This will help businesses to get information about their clients’ credit, and help them to decide whether it is worth giving credit to a client based on the existing risks. This new system is expected to be completed in December 2022 and its legal framework will be ready in the first quarter of 2023.
Mr. Speaker, government will also initiate reforms to develop capital markets which follow international norms. This will be another option for money lending entities. We are analysing our legal framework and will propose amendments during 2023.
Mr. Speaker, we have said a lot about the financial sector. However, we are still faced with a serious challenge, and this is the availability of qualified Seychellois in this sector. With a very packed agenda, this sector will create many opportunities for Seychellois employees, besides which it also pays well, compared to other sectors. I would thus like to appeal to our students to choose studies related to finance and a career in the financial sector.
- Investment, entrepreneurship, industry and trade facilitation
Mr. Speaker, government has included certain projects in the 2023 budget that will bring direct benefits to the expansion of our economy. A budgetary allocation of R47.8 million has been provided in the 2023 budget for the Industrial Estates Authority (IEA). This allocation will be used for the continuation of the infrastructure projects on ‘zone 20’, the new phase of the infrastructure project on ‘Ile Eve’ and also the new infrastructure project on ‘zone 6’ and the industrial marine park.
Mr. Speaker, the facilitation of commerce and promotion of best policies is really important for our economy. In 2022, government will complete its first Trade Policy Review. In 2022, the department of Commerce also developed a new platform to keep the private sector informed, through the necessary Trade Portal. It is important to mention the fact that the department of Commerce’s new strategy for 2023 is to be better connected with the private sector, and to be more visible through keeping the public informed on the work that it is doing. We recognize the fact that the participation of the private sector in policy making is really important, and key to the economic transformation that we want to see.
Mr. Speaker, in February 2023, the permit procedures for imports and exports will become fully digital. We expect that with this new development, we will be able to offer a better service to the private sector. Government is also working towards finalizing the Industry Property Act, the Copyright Act, and the Trade Remedies, before the end of 2023.
The Ministry of Investment, Entrepreneurship and Industry will continue to prioritize its efforts to improve the business environment and to create a national framework for entrepreneurship. Since July this year, businesses have the option of applying for a license or renewing an old one, online. The first phase of the project to create an investment portal through which investors can submit their digital projects, is in the testing stage. Government is evaluating the option of a ‘one-stop service centre’ with the aim of simplifying the procedures that businesses have to go through.
Mr. Speaker, improvements in the Customs system (ASYCUDA World) are progressing. This system is being embellished to include new modules.
The development of the module for digital payments has begun, and we expect that it will be completed by the third quarter of 2023. The Excise Warehouse module is expected to be ready for the testing phase in the first quarter of 2023. The development of the single window platform is expected to be completed in the first quarter of 2024.
The Revenue Commission continues to work on modernizing its operations system, so as to make revenue collection more efficient. It is expected that this system will be completed by the end of 2023. The registration module is currently being tested. The core modules are expected to go live by mid-2023. This modernization of the system will increase revenue collection, make available mor digital services and reduce the compliance cost of businesses.
Mr. Speaker, government will review the revenue administrative law to increase the number of days that businesses have to register with the Revenue Commission, after they have started operating, from 14 to 28 days. Government will also increase the penalty against businesses that do not honour their obligations as per the law. However, we do recognize the fact that tax laws are not the easiest to understand. Government will work on a structure to assist small businesses in understanding their tax obligations. The Revenue Commission will also assess its sensitization programmes to see if they are effective in helping businesses to conform to the tax laws.
Government is also making an allocation of R5 million for the ‘seeds capital’ scheme, to support start-up projects with innovative ideas among priority sectors. Mr. Speaker, new parameters for the SME are being introduced, to ensure that it is in line with government’s vision, and to put more emphasis on key sectors in our economic transformation. An allocation of R50 million has been made for the subvention of interest rates on SME loans of up to R3 million. The new parameters which have been introduced for this scheme will ensure that is in line with government’s vision, and put emphasis on the key sectors that will contribute towards our economic transformation. All businesses with a revenue of less than R10 million will qualify for this scheme, depending on their projects, compared to the previous rate which was R7 million. I am thus appealing to the private sector to take this opportunity and come forward with innovative projects that will contribute towards this transformation and thus create more wealth for our country.
- The environment, energy and climate change sectors
Government remains committed to putting more emphasis on energy transition. Renewable energy remains at the centre of our economic strategy, and also our economic and social priorities, as well as climate change, so that we may recuperate in a sustainable manner after the pandemic, and maintain our resilience. Our long-term commitment is to attain a decarbonized economy by the year 2050, and to increase electricity generation through the use of renewable energy sources. We are also reviewing the legal framework, policy and institutions to create a favourable environment for this transition in the energy sector.
Investment priorities for climate change adaptation have been identified in the infra-structure of the tourism sector, coastal management, food security, bio diversification and the Blue Economy. An exercise has begun to assess the project priorities in the climate change sector. Erosion, inundation and climate risks in our coastal areas have shown us how vulnerable our environment, economic resources, and even our social lives are, and how important it is to take these problems seriously and address them.
The key projects in this sector are as follows:
- The Anse Gaulette coastal project : R3 million
- The coastal rehabilitation at Anse Consolation : R1.5 million
- Improving the capacity to drain the La Digue plains: R1 million
- The management and integration of the coastal system: R8.8 million
- Coral reefs project: R19.3 million
- The installation of solar PV panels on the roofs of government buildings: R27.5 million
- The low carbon project to address climate change : R7 million
- The transport sector
Mr. Speaker, the Seychelles Land Transport Authority is receiving an allocation of R46.2 million under capital projects. This sum includes R3.9 million funds for the improvement of the road from English River to Ile Du Port. It also includes a provision of R3.5 million for the third phase of the third lane project at Pointe Larue. Government has also received a donation of R38.9 million to improve the western coast road from the Anse à la Mouche crossroad to Baie Lazare. This project is expected to begin before the end of the year.
Mr. Speaker, work on the expansion of Port Victoria is continuing in 2023. The Seychelles Ports Authority has projected an expenditure of R86 million for this project in 2023. The Ports Authority also expects to complete the construction of the infrastructure on Zil Eve in 2023, which will include an office building. The total expenditure expected is R4.2 million. A sum of R9.7 million has also been projected in the 2023 budget for the continuation of work on the La Digue jetty.
As had already been announced in the previous budget address, renovation work is ongoing on the airport terminal, to raise it to a higher standard that will reflect the five-star destination that Seychelles is. A total expenditure of R9.1 million has been projected in the 2023 budget for this renovation project by the SCAA.
A sum of R8 million has been budgeted for the year 2023 for the vehicle testing station project on Praslin.
Mr. Speaker, to be noted that the Commission for Road Transport now falls under the ministry responsible for Transport.
- The employment sector
Mr. Speaker, the statistics which were published in the second quarter of 2022 have shown that there are 4.5 percent more workers on the job market, which represents 51,214 workers, compared to 49,002 workers at the end of June 2021. During the period from January to September 2022, 927 individuals have been placed in an employment by the employment service section in the Ministry.
Mr. Speaker, government is finalizing Human Resource Development strategy. This strategy will be in line with our National Development Plan. The strategy will also help our students in making their career decisions and thus, studies relevant to these careers, whilst bearing in mind our human resource needs in the medium and long term.
A provision of R6.5 million and R5 million has been in the 2023 budget for the Skills Development Programme and a youth employment scheme respectively.
Mr. Speaker, we have spoken a lot about employment law during these past few years. We need to finalize this law during 2023.
- Fiscal measures
16.1. Introducing an environment levy for visitors
Mr. Speaker, currently government is spending R436.5 million in the environment and climate change sector, which includes cleaning and other environment projects. We have noted that tourists are becoming more conscious of the need for better management of the environment. We have also noted that the continued increase in visitor arrivals means that the tourist population often surpasses our local population. We are conscious that this could have an impact on our environment. We are thus looking into alternative ways that visitors can contribute towards our environment sustainability.
Mr. Speaker, we will implement a new levy under the environment protection law which will be charged to visitors to our country. The following rates will be charged to each visitor per the number of nights they stay in Seychelles:
- Small hotels with 24 rooms or less, at a rate of R25 per night per room
- Medium sized hotels of between 25-50 rooms at a rate of R75 per night per room
- Big hotels of over 50 rooms, at a rate of R100 per night per room.
This levy will come into effect as from April 1, 2023, to give enough notice to operators in the tourism sector. The Revenue Commission will be responsible for the collection of this revenue. This new levy will also be applicable to yacht charters. The rate we have decided on does not bear any significance to a visitor’s decision to visit Seychelles.
We are expecting to collect R162 million from this new levy in 2023.
16.2. The introduction of a new turnover tax on medium and large hotels
Mr. Speaker, even if the tourism industry is the first pillar of our economy, it’s percentage of contribution to tax, especially business tax that must be filed each year with the Revenue Commission, nevertheless remains problematic.
Mr. Speaker, in exploring the different options for business tax reform, which we did with the assistance of the OECD, we found out that the tourism sector contributes only 8% of the business tax revenue compared to 47% under the VAT collected. Among the 11 hotels that fall under the big business category, meaning, of revenues above R50 million, a revenue of about R4.75 billion is amassed, but only R60.1 million of that is paid as business tax revenue, which represents only 1.3% of their total revenue. Among these 11 big hotels, only 4 have paid business tax in 2021. Mr. Speaker, this shows us that government must collect more revenue from this sector. Even if the law is being amended to minimize the transfer pricing in this sector, we have noted that a lot of revenue from this sector is not being collected.
Thus, government will put a tax of 2% on the turnover of medium and large hotels as from January 2023. This will be a new tax regime in itself. The projected revenue from this tax as from 2023 is R118 million.
16.3. Revisions in rate for Immovable Property Tax on foreigners
Mr. Speaker, in January 2020, government introduced a 0.25 percent tax rate on Immovable Property belonging to foreign residents. There are 819 properties of this type registered at the Registrar’s Office. The Revenue Commission has collected R56.2 million in this respect from 2020 to September 2022 under the Immovable Property tax regime. Government will increase this tax rate to 0.5 percent as from January 2024. With this amendment, we expect to collect an additional R19.6 million in revenues in 2024.
16.4. Revisions on tax rates charged to securities dealers under Business Tax
Mr. Speaker, one business category in the financial sector in which we are experiencing more growth is the securities dealers’ category. Currently under the securities act, the tax rate is applicable at 1.5 percent of assessable income if the company has ‘substance’ in Seychelles, based on established criteria. Government is finalizing the framework regarding the ‘substance’ criterion, to ensure that everything is clear, and that this will contribute towards the development of this sector. We have noted that there are more than 116 securities dealers in Seychelles, and that 15 of these have paid about R71.5 million. Thus, Government will increase the applicable tax rate in that sector, from 1.5 percent to 3 percent as from January 2023.
With the 3 percent change in the tax rate, government will collect an additional R 219.5 million in revenue in 2023.
16.5. The introduction of a new, special regime under Business Tax for the fish processing and aquaculture sector.
Mr. Speaker, since this government has come to power, we have been talking about the transformation and diversification of our economy. We are very happy that the tourism sector has contributed for so long and that it has developed to its present level. However, the COVID-19 pandemic has shown us how fragile this industry is, and how dependent we have been on it for so long – which has resulted in our other economic sectors being neglected. It is for this reason that we are installing the foundations for other priority sectors to gain some fiscal space to develop, by giving them certain concessions similar to those concessions that the tourism industry has benefitted from.
One of these priority sectors is the development and evolution of the fishing industry, especially in the context of added value and aquaculture.
Therefore, Mr. Speaker, government will introduce a business tax rate of 15% on all profits made by these two sectors as from January 1, 2023. This will help both sectors to invest more and thus stimulate more growth in our economy. This preferential tax for these two sectors is for a ten-year duration.
Mr. Speaker, a new business tax regime came into application on January 1, 2022 as follows:
- 15 percent on profits of up to R1 million,
- and after that, 25 percent on profits of above R1 million.
During 2023, we will also evaluate other sectors and decide which ones will need this preferential rate. We will announce this in the 2024 budget.
16.6. Reviewing the VAT structure
In September 2022, government was assisted by the IMF to evaluate our existing VAT structure in Seychelles. The IMF delegation joined with the private sector for this exercise. The results of the evaluation show that VAT performed well in terms of revenue collection. According to the analysis, 35 percent of the registered medium to large taxpayers are contributing more than 70 percent of the VAT collection. Based on this report, government will continue to work with IMF so that:
- A forum is created to bring together different partners representing different ministries and the private sector, with the aim of adopting a strategy to address the weaknesses in the existing law and bringing better clarity the procedures.
- The ministry responsible for Finance will prepare a report on revenues lost through current exemptions. This report will be presented together with the 2024 budget report.
16.7. Tax rate reductions and the structure of benefits given by employers under the income tax act
The fourth schedule of the income and non-monetary benefits tax act will continue to cover certain non-monetary benefits that an employee may be entitled to in their specific cadre, or that an associate may get in relation to work performance. For example, benefits like lodgings, meals at work, transportation and others. Employers should pay a tax equivalent to 20 percent on the value of the non-monetary benefits they give to their workers, to the Revenue Commission.
As from January 1, 2023, the tax rate on this will be reduced from 20 percent to 15 percent. Government has also reviewed the list under the fourth schedule of the tax law regarding salaries and non-monetary benefits, to include some additional benefits for exemption as follows:
- Provision of food for employees
- Any medical expenses made by employers on behalf of employees. This will encourage employers to support their employees when they are in need of overseas medical care.
- Any expenses incurred by an employer for the education of their employees.
- Transportation expenses to take employees to and from work.
Mr. Speaker, government has reviewed especially those benefits that will have a positive outcome for workers. We recognize the fact that many employers are already giving these benefits, and we hope that others will follow suit.
Mr. Speaker, we shall review the act for Income and Non-Monetary Benefits, to ensure that none of the ‘back pay’ earned by workers is taxed. This will take effect as from January 1, 2023. This will address workers’ concern that a higher tax is applied to their salary, since quite often, the reason for the ‘back pay’ is not through the fault of the worker.
- National heritage and culture
Mr. Speaker, investment in our heritage and culture remains a priority for our government. During the year 2022, we have started the renovation of the National Cultural Centre (National Library) which will serve, not only as a learning centre for our population, but also as offices for the Culture sector, which is currently spending at least R15 million in office rental costs.
Another important project with national importance which is expected to begin in 2023 is the construction of a new national archive. Currently, many documents of great historical value are not being conserved in an optimal way in view of the challenges posed by the lack of a proper national archive. A sum of R5 million has been budgeted in 2023 to begin this project.
Mr. Speaker, in 2023, there will also be renovation work on other culture infrastructure:
- Theatre de Palmes – R3 million
- The Carnegie building – R4.1 million, and
- An administration Block for the Culture Department – R6.4 million
- Public service
Mr. Speaker, another significant priority for this administration is to develop a public service that is effective and performing. This reform is one that will take time, but we are determined to attain this because the Seychellois public deserves a performing public service that delivers. To go on as before is not an option. This mission to transform the public service into a more efficient and effective entity is important and necessary. Our Result Based Management (RBM) program is the basis of the work being done to improve the public service, and this needs to be inculcated in every public service employee, from the lowest to the highest positions.
As a government, we are conscious that the level of public satisfaction is not high with regards to the public service. How do we encourage hard work and efficiency if employees are confident that their remunerations are guaranteed, whether they perform or not? We should be rewarding good performance as a result of hard work, and even performance beyond what is expected. These are the good attitudes that we should be encouraging in the public sector, instead of procrastinating and still feeling entitled to being recompensed.
Thus, Mr. Speaker, in this reform, apart from performance-based recompense, we are also putting in the necessary framework for training.
Government has once again made an allocation of R2.5 million in the 2023 budget for the Public Service Bureau to work jointly with The Guy Morel Institute, to provide the necessary training for the public sector.
Mr. Speaker, government is getting a lot of support from the government of the United Arab Emirates for reforms in our public service. This support is a result of the MOU signed between our two governments, earlier this year.
Under this agreement, government will introduce a leadership programme for its officials in senior positions. Another programme is the identification of future leaders and training them.
The function of the Public Service Bureau (PSB) will change in 2023, so that it may give more guidance, monitoring, evaluation and auditing. MDAs will take on the role of human resource management and administrative functions, as per their strategic plans. Principal Secretaries and Chief Executives will need to have better governance and accountability. This will bring about better efficiency, effectiveness and transparency in the public sector. In the 2023 budget, a sum of R11.5 million has been allocated for the implementation of a new management system for human resources. This system will help to incorporate human resource procedures in the digital system, and also help in performance implementation in the public sector.
Mr. Speaker, like I mentioned previously, government spending on renting accommodation is too high. In view of the complication of constructing the government house, government will explore other alternatives of reducing the amount of money being spend on rent.
Government will continue to explore different options for the construction of offices for different government entities. Work has already begun on the National Cultural Centre which will save us about R15 million in rent, annually, since the Culture Department is scattered in different locations.
Work has also begun on the construction of the new headquarters of the SRC.
Mr. Speaker, during 2022, government has also reviewed the structure of the Cleaners’ Corporative. All employees currently employed by the Cleaners’ Corporative will be employed by their respective MDAs, as from January 2024. Government has also made an allocation of R24.7 million for the payment of their compensation towards the end of 2023.
This year, government is also completing an independent evaluation on the security service in the Ministry of Local Government and Community Affairs. A sum of R22.9 million is being spent annually on security services. Based on this report, government has decided to employ 84 security officers for an annual sum of R9.6 million, and also to invest in security equipment.
Government will also undertake an evaluation on the public investment management system, with the help of the IMF. This will cover good governance practices at all levels, and economic development. This exercise will help in the planning of capital projects, and will also ensure that investment allocations are made in priority sectors, and that the projects are implemented in an efficient and sustainable way.
Mr. Speaker, I need to put emphasis on the new model of payment for the thirteenth month salary. Previously, all workers were paid a thirteenth month salary without being evaluated, whereas in the model, they be paid a thirteenth month salary based on their evaluated performance. This is the fundamental change that we are bringing about. We need to realize that those who work hard need to be compensated accordingly. How are we to encourage good performance if those who work hard are given the same recompense as those who drag their feet? Mr. Speaker, there must be justice in the way we recompense our workers. Once again, this administration will not take a populist approach which is against the principle of justice.
Mr. Speaker, I want to take this opportunity to appeal to all public service workers, to become more professional, more conscientious and more efficient in their work, especially now that they are about to receive a salary increase in 2023 – because when they undergo their performance evaluation, if they are not up to standard, there will be no place for them in this service.
- Governance in public enterprises
Mr. Speaker, we are already seeing the results of the structures that we have established in public enterprises. In 2021, government made an allocation of R240.1 million for the subvention of public enterprises, and in 2022, R272.8 million. However, in 2023, we are only projecting R44.9 million for the following entities:
- The Postal Services: R6 million
- SPTC: R36.9 million
- The Guy Morel Institute R2 million
Mr. Speaker, during 2023, we will conduct an operational and governance audit on five public enterprises. In the first phase, which we expect to complete by the end of June 2023, we will focus on PUC and Seypec. In the second phase, which is expected to be completed by December 2023, the focus will be on Air Seychelles, Island Development Company Limited, and Seychelles Trading Company Ltd (STC).
Mr. Speaker, a sum of R148.7 million is being projected under development grants for public enterprises as follows:
- SPTC : R35.9 million
- PUC : R60 million
- PMC : R52.8 million
A sum of R275.2 million has also been budgeted for PUC under ‘Net Lending’. Mr. Speaker, we also expect to see the completion of the La Gogue Dam extension project in 2023. This project has cost more than R300 million and has been financed by the African Development Bank. The project has experienced some considerable delay due to a number of additional work that needed to be done. PUC is implementing the sewerage project on La Digue in 2023, which is also being financed through a loan from the European Investment Bank (EIB) and Agence France de Développement (AFD). A total of more than R42.8 million has been projected in 2013 for this project.
Mr. Speaker, I would like to thank President Ramkalawan for his guidance and support in the transformation that we are envisaging for our country, Seychelles.
I also thank the Vice-President, and my colleague ministers, departments and agencies and their teams for their support in the implementation of the 2022 budget, and also in the preparation of the 2023 budget.
I thank all the employees of the Ministry of Finance, National Planning and Trade, and all agencies under my portfolio, for the devotion, professionalism and contribution. We are transformation the economy of Seychelles as a team.
I thank also, all members of the National Assembly, and yourself, Mr. Speaker, for the support that you have given my ministry during the 2022 financial year.
I also recognize the support and contribution of the public and private sectors, and civil society, in the preparation of the 2023 budget. Thank you for your commitment in the budgetary process.
My biggest thanks go to the Seychellois people, bcause during these past two years, you have shown a lot of resilience, perseverence, courage and maturity. You have shown yourselves to be conscientious, and have taken the economic difficulties being faced by our country in your stride. You have demonstrated patience, and the willingness to give a helping hand for the good of Seychelles – you have helped to bolster the country during the most difficult period of its history.
Today, two years later, your show of good character and good attitudes during this period, have borne fruit. As a responsible government, we recognize your positive participation in our economic success story.
Mr. Speaker, my presentation today has shown how this current government is working for its people in a conscientious manner, so that the people may reap all possible benefits. When we all come together and put in a greater effort, when we show greater solidarity, we create more wealth, and it is our people and each of our children who will benefit.
My fellow Seychellois, let us get up and work hard for our own wellbeing, for our families, our communities, our country. Seychelles is counting on us – so let us do it for Seychelles.
With this, Mr. Speaker, I recommend that this 2023 Appropriation Bill, for a budget of R10,495,149,665 to authorize expenditures in the ‘Consolidated Fund for the 2023 financial year, is approved.
Thank you, Mr. Speaker.