Capital projects, a highlight of the 2023 budget |15 November 2022

The press conference

Among the highlights of the 2023 budget are the distribution of economic wealth and increased spending in capital infrastructure, the Ministry of Finance, National Planning and Trade said yesterday.

Officials from the organisation – director general of the Macroeconomic Forecasting and Analysis Division Yannick Vel; Comptroller General of the Financial Planning and Control Division, Astrid Tamatave; director general of the Debt Management Division, Dick Labonte; and deputy Comptroller General Jude Commettant; along with chief executive of the Seychelles Infrastructure Agency (SIA) Jitesh Shah – yesterday briefed the press on the 2023 economic forecast, analysis and projections relating to the fiscal and debt performance, and capital projects for the year ahead.

This follows the 2023 Budget address by Minister Naadir Hassan, on Friday November 4.

According to Ms Tamatave, the announced salary increase for public servants as from April 2023, and planned increase in investments in projects with social and economic bearing fall in line with the objective.

With the projection of 5.3 percent economic growth in 2023, the budget also seeks to nurture accelerated medium-term growth through capital investment in the Blue Economy and fisheries, so as to enhance business growth in these sectors, coupled with new taxation initiatives.

Government has made provisions to guarantee a loan of R200 million to the Development Bank of Seychelles (DBS) and is to advise the institution of the sectors to finance, towards economic growth.

In terms of capital expenditure, the medium-term expenditure for projects comes to around R5 billion, projected at R1.4 billion in 2023, to increase to R1.7 billion in 2024, and R1.9 billion in 2025.

Capital projects are financed through local financing, foreign loans, and foreign grants, although the biggest component will be local, at R756 million. Grant financing is the second largest component.

“The biggest allocation is lands and housing, followed by the Office of the President and Office of the Vice-President, and this is due to a number of projects to be financed through grants falling under the two portfolios,” Mr Commettant noted.

The allocation is to cover 342 new affordable housing units, 128 mid-range condo units, and a number of land bank projects.

“Nine projects are supposed to start next year, making it a total of 162 units which are to start next year. This is not to say that they will all be completed by next year, but it will start next year, and overspill into 2024. The remaining projects are to commence in 2024, and these are those under local funding,” Mr Shah added.

Discussions are ongoing with partners to develop thirteen sites, bringing the total to 274 projected units, towards the end of 2023.

A further 40 units are planned for the second quarter of 2023, financed through a United Arab Emirates (UAE) grant.

Three main landbank projects are planned, unlocking 60 plots at Anse Royale, 8 plots on Praslin and a further 16 plots at La Gogue.

In terms of net lending, whereby government lends to public enterprises towards projects financed through loans, R265.2 million is to be allocated to the Public Utilities Corporation (PUC) for three main projects including the La Gogue dam, and PUC Masterplan.

Development grants to other state-owned enterprises includes R35.9 million for the Seychelles Public Transport Corporation (SPTC), and R52.8 million towards the Public Enterprise Monitoritng Commission (PEMC). Provisions for a further R60 million to the PUC is projected.

The health and education sectors each comprise 8 percent of the capital expenditure budget, with the Ministry of Local Government allocated 5 percent for community projects. The agriculture sector makes up 7 percent of capital expenditure.

Main projects include the jetty, the development of the long-delayed National Archives, development of the Ile du Port zones, the continuation of a facility for marine-police.

The health sector is a priority in the medium-term, with allocations for renovations in 2023, in addition to an allocation nearing R500 million in the medium term, as from 2024. The construction of a new hospital is projected for 2024.

Within the education sector, allocations include the renovation and construction of a new block at La Rosière school, construction of the La Digue school, and infrastructure for the Seychelles Institute of Agriculture and Horticulture (SIAH).

Laura Pillay