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Climate change mitigation, economic diversification, and a more productive public sector are among the areas this year’s budget fiscal risk statement addresses to ensure Seychelles remains on track with its goal of paying 50 percent of its debts by 2030, said a top government official.
The Secretary of State for Finance, Patrick Payet, made the statement in a press conference on Thursday at the Ministry of Finance’s headquarters at Liberty House.
The press conference is part of his establishment’s new drive to better explain the proposed budget of SCR 11.9 billion ($880 million) that the Finance Minister, Naadir Hassan, presented to the National Assembly last week.
Payet said the proposed budget covers all the risks associated with it. “For example, if tomorrow we see that the tourism sector’s growth falls, we assess what impact will this have on revenue collection and how we can mitigate these risks,” he explained.
One of the risks that has been identified is that of climate change. Seychelles, an archipelago in the western Indian Ocean, considers adaptation to climate change a high priority to reduce the country’s vulnerability – embarking on a series of measures to tackle the issue.
“Climate change is an area where we have put in place certain infrastructures, for example for adaptation and mitigation projects. […] One thing that the government has also put in place is a financial scheme for solar panels so that we may reduce our dependency on conventional electrical components,” he explained.
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Payet also highlighted the need for Seychelles to “continue fiscal responsibility and discipline” and said that “it is something we need as although this is the largest budget we are proposing to the National Assembly, we need to ensure that the fiscal discipline so that we may attain our goal of paying off 50 percent of our debt by 2030.”
Payet’s caution comes despite previously revealing that Seychelles continues to have a strong performance against benchmarks of the International Monetary Fund’s Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programmes. These collectively total $102 million, 4.7 percent of 2023 GDP, worth of funding over three years to 2026, of which 32 percent has already been disbursed.
“We cannot simply spend as we are making a budgetary surplus, we should be able to put some money aside so that we may repay our debts,” he added.
Transformation and diversification of the economy also feature among the risks in the fiscal risk statement, and Payet said, “We know that we are heavily reliant on the tourism sector, but we are looking at the other sectors that we have to develop like shown in our national development plans shows sectors that we believe have the potential.”
He also explained that the country should be able to invest in those sectors to ensure that the necessary infrastructures are put in place for them to grow.
Payet also said that the public sector should be more productive and “the more we can give the private sector a better service, we can see better growth in the future and this will help us reduce our debts faster.”
He said, “If despite our projections we have a higher economic growth, this will help us collect more revenue in taxes.”
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