National Assembly Government to seek approval for supplementary budget of R275m |21 September 2023
Government will be seeking the National Assembly’s approval for a supplementary budget of R275,506,848.63, Vice-President Ahmed Afif announced during Tuesday’s sitting.
Presenting the mid-year economic and fiscal outlook on behalf of Minister for Finance, National Planning & Trade Naadir Hassan, VP Afif stated that based on performance over the first half of the year, certain adjustments to the annual budget are needed.
The Assembly approved a budget totalling R10,495,149,665 for the year 2023.
“In the first half of this year, we achieved a primary fiscal surplus of R365.8 million, equivalent to 1.2 percent of GDP, which significantly surpasses our initial projection of R15.4 million surplus, or 0.1 percent of GDP.”
He elaborated that this surplus was a result of higher-than-expected revenues and disciplined spending, though he noted that expenses typically run lower in the initial half of the year.
Tax revenues underwent a revision, down by approximately R789 million or 8.6 percent from the initial 2023 budget, primarily due to a reduced tax base stemming from a 2022 deficit of R394 million. Nevertheless, the overall outlook for tax collection remains positive, having exceeded 2021 figures by R671 million.
Non-tax revenues improved by R76.6 million, due to strong performance from certain sectors, including the Immigration department and the department of Transport.
Grants to Seychelles decreased by R35.5 million due to some projects, such as the marine police facility and the Seychelles Revenue Commission’s (SRC) invoice management system, not progressing as expected. However, new grants have been secured, including support from the Abu Dhabi Fund for Development for the South and West road development project.
Despite initially forecasting a primary fiscal surplus of R330.2 million, government revised its fiscal position during IMF negotiations, expecting a deficit instead. In light of this, VP Afif proposed a supplementary budget of R275,506,848.63, which will be funded by expense reductions totalling R621,370,992.77. This adjustment results in a reduction of R345,864,144.14 in the 2023 budget.
Key components of the supplementary budget include additional allocations for the Truth, Reconciliation and National Unity Commission (TRNUC) and the new Communications Authority, while reductions are across different budget categories, including salaries, goods and services, capital projects, and net lending, in various government entities.
“For the first half of the year, there was a savings of R64 million, or 4 percent in salaries. This follows revised targets in March. Once again, MDAs did not manage to fill positions which they had intended.”
“Salary projections for the second half of the year have been revised even lower, by R173.5 million. This is on account of savings in the thirteenth month salary, recruitments that did not materialise, as well as reallocation of budget appropriations for goods and services in MDAs,” VP Afif stated.
Regarding government debt, it stood at R17.7 billion or 63.9 percent of GDP by June 2023, showing a slight decline compared to the previous year-end. Government anticipates debt to reach R18.6 billion or 62 percent of GDP by the end of the year, maintaining a sustainable trajectory.
Based on the first half’s performance and IMF discussions, the government projects a primary fiscal deficit of R70.98 million, equivalent to 0.24 percent of GDP for the full year.