World Bank approves loan for Seychelles’ reform plans |04 October 2013

The World Bank board of directors has announced the approval of funds to support Seychelles’ efforts to modernise its business climate, improve the transparency and sustainability of government expenditure, and better target the people who need social services.

The US $7 million loan will support Seychelles’ Second Sustainability and Competitiveness Development Policy Loan, the second in a series of three loans to help the government implement reforms that will contribute to improve the business climate in Seychelles; enhance fiscal transparency; enhance public financial management; improve the distribution of social assistance and its monitoring; and increase fiscal oversight and the management of public enterprises.

Finance, Trade and Investment Minister Pierre Laporte has welcomed the announcement as a step in the right direction and explained that although the government of Seychelles was actively working to bring down its public debt to GDP (gross domestic product) ratio, it has at times been necessary to borrow additional funds in order to increase liquidity to implement various fiscal policies under the economic reform.

“The funds we are receiving from the World Bank are well within our debt ceiling and will have no negative impact on our objective to have a steady decline over time,” he said.

Marcelo Giugale, the World Bank's director of economic policy and poverty reduction programmes for Africa, has noted that Seychelles has already achieved most of the Millennium Development Goals, especially for education, health, poverty eradication, and the environment.

 “Today’s financing will help the government to further consolidate its macroeconomic framework and improve public sector efficiency through tighter monitoring of government spending and transfers, and implement a programme-based budgeting system,” he said.

The funds will support steps to make it easier to start a new business by modernising the country’s 1972 Companies Act, help implement the recently-introduced Insolvency Law, help improve transparency and governance in the petroleum and fisheries sectors and also assist in strengthening the financial management of public institutions.