President Faure assents to revised 2020 budget |14 April 2020
President Danny Faure on Saturday assented to the revised state budget for 2020, approved by the National Assembly on Thursday April 9, 2020.
The Appropriation (Amendment) Act 2020 now makes available a sum of R10.447 billion for spending, a R1.2 billion increase from the previous 2020 budget.
The budget revision were made in line with the COVID-19 pandemic so as to allow the health department to better deal with the situation as well as to set up measures and policies for the inevitable economic impacts.
With the global economy facing a recession, Seychelles has adopted measures to temporarily lessen the blow on businesses and individuals by securing salary payments of employees for the next three months, deferring tax payments and boosting the financial capabilities of the Agency for Social Protection (ASP).
Budget 2020’s focus has also shifted towards providing additional funds to the heath sector as it tackles the COVID-19 impacts, and ensuring food security.
It has scrapped non-essential government spending and placed a freeze on recruitments, reduced allowances and restricted travels.
As a result of the revision, the annual Festival Kreol, National Day celebrations and the much anticipated 250th anniversary of the first settlement no longer features on this year’s calendar of activities.
Minister for Finance, Trade, Investment and Economic Planning, Maurice Loustau-Lalanne, stated that his ministry is satisfied with the manner in which the National Assembly was able to work with the executive last week to approve the budget before Easter.
He further noted that the government is hoping to contain the demand for financial assistance within the parameters set under the revised budget in order for the budget to last up until the end of this year.
The ministry of finance forecasted a primary balance of 2.5% surplus, or R600 million, for 2020 but the revised budget will see this balance reduced to -14%.
According to Minister Loustau-Lalanne, the country cannot afford for this deficit to go any lower.
He added that the government will adopt other mechanisms if the funds apportioned for financial assistance are found insufficient.
“We have to closely observe our economy and in May we will be preparing for a new budget for 2021, 2022 and 2023, during which we will look at future strategies that will be put in place to recover the debt that we are presently incurring. It is obvious that we will go into a recession.”
Minister Loustau-Lalanne also stated that the country will have to re-evaluate the main drivers of its economy to ensure that Seychelles does not have to rely on tourism and leave itself similarly exposed in the future.
The ministry of finance expects to provide regular press updates on developments in the economy throughout the next few months.