Ministry of Finance, National Planning and Trade |29 December 2023
Volleyballer Angelique Adeline, gold medallist
Major events of the year 2023
As we near the end of the year, the Ministry of Finance, National Planning & Trade looks back on some of its accomplishments and challenges it has faced during 2023.
The year started relatively stable with economic indicators showing the recovery post Covid-19 was on target, however towards the end of the year, local and world events have been threatening those gains.
At the ministry we remain cautious and disciplined to ensure the sustainability of our financial and economic recovery.
Below are some of our major events of the year 2023.
Increase in public sector salary
In April, public sector employees received an increase of 10% in their basic salary. The 10% increase was calculated after the consolidation of four allowances into their basic salary. Given the increase, the basic salary of employees in the public sector rose by a minimum of R1000. The four allowances which were consolidated were: 5% Supplementation, Marketable Skills, Performance and Graduate. The increase was in line with a revision of the public sector salary grid.
IMF programmes
The year 2023, saw Seychelles successfully re-negotiate another economic reform programme with the support of the International Monetary Fund (IMF). The new Extended Fund Facility (EFF) is a continuation of the first one the government signed with the IMF in July 2021.
The new EFF for a three-year period was signed and approved in late May for an amount equivalent to US $56 million.
Upon the approval of the new EFF, the executive board of the IMF said “Seychelles has made substantial progress in restoring macroeconomic sustainability after being hard hit by the Covid-19 pandemic. The new EFF will build on this progress and maintain macroeconomic stability, boost inclusive growth, and strengthen fiscal and monetary policy frameworks.”
At the same meeting, the executive board also approved for Seychelles to benefit under its Resilience and Sustainability Facility (RSF), for an amount of US $46 million.
The RSF is intended to build ‘resilience to climate change, exploit synergies with other source of official financing and to help catalyse further private financing for climate related investments.’
A first review was conducted in October and the second review is scheduled for March 2024.
EU – Annex 1
In October, the European Union (EU) council added Seychelles to Annex I of the EU list of non-cooperative jurisdictions for tax purposes (the so-called EU blacklist), in view of Seychelles’ rating of partially compliant by the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) for Exchange of Information on Request.
This decision was strongly condemned by the Minister for Finance, National Planning and Trade, Naadir Hassan, stating “the addition of the Seychelles on the EU blacklist on the basis of rigid application of criterion set purely for non-member states goes contrary to the purported principles of the list being promotion of good tax governance standards”.
“The EU has had a complete disregard for the specifics relating to Seychelles’ rating, despite extensive engagement with them, illustrating the progress made and evidencing the reforms undertaken and their effectiveness in practice. Their automatic listing of the country despite this evidence of political commitment to the standards on tax transparency illustrates a careless approach to the harm such listing entails. It is inexcusable that historic deficiencies which have been fully remedied should continue to have such significant impact on the jurisdiction.”
Seychelles intends to submit a further request for supplementary review to the PRG at the earliest opportunity.
ESAAMLG
Seychelles was upgraded on another five recommendations of the Financial Action Task Force (FATF). The upgrade came after the Seychelles delegation attended the 45th meeting of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) Task Force of Senior Officials, held in Arusha, Tanzania from 26th to 31st March 2023.
The five FATF recommendations (5,19, 25, 28 and 34) relate to Terrorist Financing offence, Higher-risk countries, Transparency and Beneficial Ownership of Legal Persons, Regulation and Supervision of Designated Non-Financial Business or Professions (DNFBPs) and Guidance and Feedback respectively.
To date, Seychelles is either compliant or largely compliant on 34 of the 40 FATF Recommendations.
Fitch rating
In 2023, Fitch Ratings affirmed Seychelles' long-term foreign currency Issuer Default Rating (IDR) at 'BB-' with a stable outlook. According to a press release from Fitch, Seychelles' 'BB-' rating is supported by relatively high income levels (2x the peer median), strong World Bank Governance Indicators, support from multilateral creditors, and stable policymaking. During the year, the firm reviewed Seychelles’ rating, twice. The first in April and the second in September, whereby it affirmed the April’s rating.
Digitalisation: Integrated Financial Management Information System (IFMIS)
The government is pursuing its digital economy agenda and at the ministry, we have adopted the agenda and making significant investment in digitalising our financial and budget system. One of the major investments is in the Integrated Financial Management Information System (IFMIS). The system will revolutionalise the preparation, execution, monitoring and supervision of the government’s budget, in terms of collecting, recording and reporting financial information.
At the end of 2023, the tender process was initiated with an invitation for expression of interest and the timeframe for the full implementation is as follows: operational in 2025, for the 2026 budget preparation.
IFMIS as it is commonly known is being implemented with the support of a consultant from the International Monetary Fund (IMF), and has as objectives to render the financial and budget process more efficient, improve transfer of information between organisations, enable the modernisation of the payment system, hence allowing for more transparency, and accountability in government’s financial information system.
AIMS – Aids Information Management System
The Aids Information Management System (AIMS) went live on December 25, 2023.
The objective of the project is to strengthen the government’s aid management function in order to enhance transparency and accountability in management of public resources. This objective will be achieved through establishment of a central database of all foreign grants to enhance government's ability to allocate its scarce resources in line with the government's medium-term fiscal framework. The system will also support the government's drive to improve aid data coordination through better recording, reporting and audit. The Project will also enhance the capacity of government to better balance the government’s financing needs and its payment obligations, consistent with its post-Covid economic recovery strategy as well as enhancing information sharing.
The project was financed through a grant by the African Development Bank under the Middle-Income Country Technical Assistance Fund (MIC TAF).
Import and export E-Service
Since early this year, the Import and Export Unit in the Trade Department has extended its e-service facilities to all entities, including government, non-governmental organisations and off-shore companies.
Budget 2024
The 2024 Budget for a total sum of R10,640,628,966 was approved by the National Assembly on December 4 and assented by President Wavel Ramkalawan on December 6.
Minister Naadir Hassan presented the 2024 budget speech on Friday November 3, before the National Assembly. The 2024 budget is focusing on investments in the community, infrastructure, people and providing tax breaks and incentives for businesses.
The entity with the biggest budget allocation for 2024 is the Ministry of Education – R1,348,779, followed by Benefits and Approved Programmes of Social Protection Agency with an allocation of R1,252,000 and the Health Care Agency with a budget of R1,203,260.
In his budget speech, Minister Hassan emphasised on the need to continue to consolidate on the gains made in the past three years, in the aftermath of the Covid-19 pandemic, to ensure the sustainability of the budget and the country’s debt.
He pointed out that while the economy is doing well, the government will continue to be cautious in its spending, given the uncertainties the world is facing, which have a direct impact on the country.
“Government must remain prudent and responsible with regard to its expenses in 2024, and in the medium term.”
Staff
The ministry invests a lot in the development of its staff and this year, we celebrated their accomplishments.
We were extra proud of four of our staff – three were athletes while the fourth was a team manager – who were part of Team Seychelles’ delegation at the 11th Indian Ocean Islands Games in Madagascar.
Rama Lesperance, Angelique Adeline, Dasheil Fanchette and Antonio Bamboche were our proud representatives, who helped in flying our country’s flag high.
Angelique (volleyball player) and Dasheil (boxer) went all the way by winning the gold medal in their events. We congratulate our athletes for their hard work and we have supported them every step of the way.
At the ministry, we believe in providing the right environment for our staff to develop and forge their career and this year many have attended training overseas with reputable organisations, such as the IMF, World Bank, ARIPO, WTO, AfCFTA, OECD, UPOV, Commonwealth, and EU.
Staff also attended training sessions locally and even shared their knowledge to others, by providing training to students of the Seychelles Business Studies Academy.
“On my personal behalf and that of the government I want to express my deepest gratitude to all staff of the ministry for their professionalism, discipline, with exemplary ethos. We are a team of Seychellois public servants who are working diligently for the betterment of our country and our people. Special appreciation also goes to all our local and international partners for their continued support,” stated Minister Naadir Hassan.
The Ministry of Finance, National Planning and Trade takes this opportunity to wish everyone a Happy and Prosperous New Year 2024.
Contributed
