Assembly approves more budget allocations |13 April 2021

Designated Minister Jean-François Ferrari yesterday replaced Minister for Finance, Economic Planning and Trade Naadir Hassan in the National Assembly to defend the budget allocations for different lines of spending and social programmes administered by government.

The first line of expense to be approved by 24 votes was ‘Other goods and services’ to a total of R150,174,000 comprising the allocations for government overseas travel at a sum of R10,127,000 and professional and consultancy services, to a sum of R67,452,000.

With regards to cleaning services to a sum of R66,481 million, Minister Ferrari clarified that the head applies to services rendered across the government offices, to include different ministries, departments and agencies. The Cleaners’ Cooperative for which the allocation applies, employs 619 staff he noted, with their salaries amounting to around R60 million annually. The allocation also makes provisions for salaries for management at R1.9 million, plus an additional R1.4 million for other associated expenses pertaining to the management of such a large labour force.

According to Minister Ferrari, the Ministry of Health benefits the most from the services, with 250 of the 619 staff attached to the ministry. A significant proportion of the budget is appropriated towards community development, entities and institutions within culture and education.

Principal secretary for Finance Damien Thesee, in response to questions regarding R3.6 million for recruitment and passages of expatriates, noted that this applies to baggage and travel costs for teachers employed with the Ministry of Education.

Hon. Wallace Cosgrow, member representing United Seychelles (US), sought clarifications as to the increments in the allocations for professional and consultancy services, which has doubled this year as compared to 2020. At the end of 2020, R48 million had been incurred in consultancy costs.

“The budget for professional services and consultancy has increased, primarily because of the devaluation of the Rupee, so the foreign exchange rate we employed in formulating the 2021 budget is higher than the rate for 2020, which on average was R14 or R15 per USD ($).”

“Of that, we have mainly contracts in foreign exchange, and we have sought assistance from the World Bank, for example to give us assistance for the financial sector review, which is being conducted conjointly with the Central Bank. We are also still paying for some assistance for the Result-based management reform, which includes the review and monitoring and evaluation pillar,” PS Thesee explained.

The assembly secondly considered and approved the appropriation for the Net lending heading to a sum of R552,431,000 without much deliberation. Leader of the opposition, Sebastien Pillay, however wanted to know more details about R461,918,000 borrowed by the government to assist entities including the Public Utilities Corporation (PUC), the Development Bank of Seychelles (DBS) and Seychelles Trading Company (STC).

In response, PS Thesee highlighted the various projects which are to be financed under the heads, including the La Gogue Dam project, the 33KV project and the Neptune projects by PUC, as well as financial support to aid DBS meet market commitments, as it has since last year faced challenges in loan deferments, resulting in a monthly shortages of R6 million.

A different panel comprising secretary of state for finance Patrick Payet, director of Public Accounts Management at the ministry May-Paul Marengo, and Grants manager for the National Grants Committee Roseline Hoareau joined the assembly to defend the appropriations for social programmes of central government, to a sum of R485,868,000, which was approved after lengthy deliberations.

As for the Youth Entrepreneurship Scheme for which no allocation has been made this year, PS Thesee noted that the grant which was being administered by the Seychelles National Youth Council (SNYC) is presently under review, as there were concerns as to how the fund was managed in the past.

Among the allocations are; R66,733,000 for pensions, R52,324,000 for special pension payments, R7,000,000 to the Children’s Special Fund, R5,000,000 towards the home improvement or reroofing scheme applicable to pensioners, and R192,000,000 as Covid-19 wage grant.

Assembly members forwarded numerous questions to the panel regarding the different programmes. With regard to the increased allocation from R20 million to R40 million for the Small Medium Enterprises (SME) scheme, PS Thesee explained that the allocated figure has doubled to cater to increasing demand over recent years. In 2020 government spent R41.1 million, on the scheme, as compared to R45.3 million in 2019, and R26.6 million in 2018. In 2020 alone, 191 applications were submitted under the scheme to a sum of R212.2 million.

PS Thesee also shed light on an appropriation of R1 million to the Seychelles Chamber of Commerce and Industries (SCCI), an entity whose costs are usually covered by membership fees and local businesses. Based on the Covid-19 pandemic and economic crisis, SCCI has struggled to get membership fees and was therefore supported by government with R400,000 in 2020. Under the 2021 budget, SCCI has been allocated R1 million, and government support is forecasted for the next three years while the economy recovers.

Prior to voting on the entire appropriation, leader of government business Bernard Georges proposed that the assembly vote on the R5 million allocations as subventions to political parties and that R1.5 million be frozen pending further consultations with both political parties and the Electoral Commission of Seychelles (ECS), although the leader of the opposition was not welcoming to the idea, instead proposing that the vote be taken on the entire amount. After some deliberations, it was agreed that the assembly will vote on the entire amount of R6 million but that R1.5 million is not disbursed pending consultations and a decision.

During the afternoon session, members tackled subventions to public enterprises which this year totals in at R220,788,000, mainly in the form of salary assistance. From the allocation, R133,330,000 has been allocated to national carrier Air Seychelles, a further R15,046,000 to the Seychelles Postal Services Company Ltd, and R50,000 to the Seychelles Public Transport Corporation (SPTC). Furthermore, the appropriation makes provisions of R14,774,000 to the Seychelles National Parks Authority (SNPA) and R7,637,000 to The Guy Morel Institute (TGMI).

As expected, many members had queries about Air Seychelles, to which Minister Ferrari noted that the priority is to support the organisation to rectify administrative measures. The appropriation, he explained, makes provisions based on the October payroll, for salary payments for 9 months at a cost of R103,000,000, while the additional R30 million is allocated to help the entity service its loans.

“The government is doing all it can to save this company, they are also playing their part. The negotiations are really difficult, as we are talking about international contracts involving millions of USD, but a lot of work is being done,” Minister Ferrari assured the assembly. A total of 33 members voted to approve the allocation.

The assembly also during yesterday's session  approved the ‘others’, heading to a sum of R34,936,000, the Development grants to public enterprises at a total of R180,841,000, and the appropriation for contingency to a sum of R50,000,000, which applies to all expenses which are not specifically provided for by budget headings.

Members concluded yesterday's sitting by taking a vote on the heading for Tax exemption (Value Added Tax exemption, trade exemption) to a sum of R20 million, which was approved by 33 votes in favour.

Lastly, members voted in favour of the appropriation for the Public Service Appeals Board at R1,126,000, and that of the Public Officers Ethics Commission at R2,655,000.

Laura Pillay