‘Seychelles on track with public debt reduction target’ |04 September 2013

Seychelles is on track to bring its public debt stock to 50% of GDP (gross domestic product) by June 2018, in line with its commitments under its macroeconomic reform programme.

Seychelles’ ratio of public debt to GDP as of June 2013 stood at an estimated 70% of GDP. This compares to over 100% of GDP in 2008.

The Ministry of Finance, Trade and Investment revealed these figures yesterday in a press release as it responded to a report in Britain’s The Guardian newspaper entitled ‘Seychelles tops list of most indebted nations’.

Finance, Trade and Investment Minister Pierre Laporte said that the country’s focus is on bringing our debt stock to internationally accepted sustainability levels.

Moreover, the Seychelles government has expressed doubts as to the methodologies applied by the Jubilee Campaign to arrive at those numbers.

Based on that, the Seychelles authorities have decided not to comment further on this report until it has carried out a thorough review of its debt stock, including private sector debt.

According to Mr Laporte, “Seychelles’ efforts in reducing its debt have been exemplary, as affirmed on several occasions by the Bretton Wood institutions and our bilateral partners. In fact, Seychelles’ impressive record since 2008 in reducing its debt stock has been a key factor in the recent improvements in its ratings by internationally recognised rating agency ‘Fitch’”.

“We feel that the figures quoted in the The Guardian do not do us justice with regard to the macroeconomic reforms that the government of Seychelles has been implementing since 2008,” said Minister Laporte.

Adding to Minister Laporte’s comments, Foreign Affairs Minister Jean-Paul Adam has said that the government of Seychelles nonetheless welcomes the initiative of the Jubilee Debt Campaign to flag the issue of debt as a development issue. 

“Seychelles has itself consistently campaigned internationally for more awareness of the difficulties that debt poses for true sustainable development,” said Minister Adam.  “Small island developing states (Sids) in particular are often caught in a ‘development paradox’ whereby they have achieved good development indicators, but have racked up large amounts of debt to achieve them.”

Minister Adam added that “for Sids, it is important that the United Nations, the Bretton Woods institutions, and other development organisations work with the private sector to try and find suitable debt cancellation programmes recognising the realities of the current development mechanisms available to Sids”.

“Seychelles has also led efforts to propose innovative solutions such as ‘debt for adaptation swaps’ whereby debt cancellations could empower Sids to better channel resources to fight climate change and build resilience against climate shocks. This is one of the recommendations following the recent Aims (Atlantic, Indian Ocean, Mediterranean and South China Seas) regional meeting for Sids held in Seychelles in July this year,” noted Mr Adam.