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SCCI Comments on Economy and Budget

SCCI Comments on Economy and Budget
  Admin   |     12th December 2018

SCCI Comments on Economy and Budget

SCCI – The Seychelles Economy- Post Budget Reaction and Looking Beyond

1. The Government and its stakeholders such as IMF, World Bank have managed to turnaround our fiscal stability since the beginning of the economic crisis of 2008. The sovereign debt default meant the country had to embark on a path of macroeconomic and institutional reforms. Reforms such as:

  • Liberalizing the exchange rate regime
  • Increase in the country’s reserves
  • Government debt restructuring which has led to primary budget surplus alongside the Performance Based Budgeting.

2. However, the SCCI respectfully seek that the Government’s role within the economy must be continually reassessed and it is our view that its presence as the facilitator will be a catalyst for better growth and wealth creation for Seychelles. We believe that government should focus on areas where the private sector cannot competitively provide services like public health, public education, social welfare, security, application of justice, clean environment, etc. The productive sectors must be left to the private sector.

For 2018, we do take note of certain measures that points in that direction like SPTC withdrawing from the special hire contract services sector effective March 2019, divestment in the SCB. However, we need to work collaboratively to formulate an action plan that will reinforce and demonstrate more significant moves in that direction.

We believe that the Government should continue to embark on their current program to become more efficient by eliminating wastage and layers of bureaucracy, exiting sectors that their role as regulators is fundamental as check and balances, and continue to use technology to modernize their services. The resultant effect should be less funding requirement, which theoretically would reduce the tax burden on all citizens, consumers and producers. An added benefit of a smaller government would be that the public sector would not compete as much with the private sector for employees and might result in a lower demand for expatriate labour.