Budget Speech 2014: Seychelles to further its structural reforms |13 December 2013

The Seychelles government has consistently outperformed its fiscal programme targets since the start of the economic reform programme on October 31, 2008 and has given its commitments to reduce overall public debt to 50% of GDP by 2018.

Although the five-year reform with the help of the International Monetary Fund (IMF) and the World Bank has ended and the country’s successful economic programme has been seen as an example for other small countries to emulate, Seychelles will further its structural reform agenda.

Speaking in the National Assembly on Tuesday when he presented the 2014 budget, Finance, Trade and Investment Minister Pierre Laporte said Seychelles will have another programme with the IMF.

“Structural reforms have complemented our stabilisation efforts by strengthening institutional frameworks. It is important that we continue to implement further structural reforms in areas where weaknesses still exist,” said Minister Laporte.

The minister added that this year his ministry began piloting the Programme Performance-Based Budgeting (PPBB) initiative in two ministries. These are the ministries of Education and Natural Resources.

The PPBB initiative will continue in the coming year and we will include three more ministries in 2015.

The PPBB is a budgeting approach which directly links the planned expenditures to clearly determine results and improve service delivery within the mandate of an organisation.

It is about shifting emphasis from input (activities) and output to outcomes, service delivery and results. The PPBB exists where the budget is formed around groupings of related services and activities that are all determined to achieve a single strategic purpose called a programme.

The programme may be broken down for the purposes of management into sub-programme and activities. The performance of each programme can be measured in terms of its outcomes (the extent to which its sub-programmes and activities have contributed to the advancement of the strategic objective); outputs (the goods and services provided under the programme which can be measured in terms of quantity, quality and timeliness) and cost.

The PPBB provides both a clearer way of describing the purpose of the budget and a framework with which to measure budget performance in meeting the purpose for which it has been implemented.

Minister Laporte added that the Seychelles government has begun the groundwork for adoption of the International Public Sector Accounting Standards (IPSAS) in 2014.

“This will consolidate the budget accounts of government with the cash flow of public enterprises and will allow the government and the general public to have a better appreciation of the operations of the public sector,” said the minister.

Mr Laporte also said that exploration for petrol in Seychelles' exclusive economic zone (EEZ) continues and drilling is planned for late 2014.

He noted that early this year AFREN Oil Company completed a 3D seismic survey and the processing and interpretation of these data will be completed by this year-end.

In 2014, there will be an increase of exploration activities with the Japan Oil, Gas and Metals National Corporation (JOGMEC) expected to conduct further geophysical and geochemical surveys in our EEZ following an agreement between Japan and Seychelles this year.

The minister said that the government recognises that in the event of an oil discovery the wealth derived should be prudently managed, and the benefits evenly distributed to benefit all Seychellois.

“This year we reviewed and modernised the legal framework and fiscal regime of the Model Petroleum Agreement to bring them in line with best international practices. In June, we re-opened our EEZ to new oil companies after a moratorium of over two years. We have begun the process of adherence to the Extractive Industry Transparency Initiative (EITI).

 Government recognises that in the event of an oil discovery the wealth derived should be prudently managed, and the benefits evenly distributed to benefit all Seychellois. Seychelles will present its application for EITI adherence by April 2014,” said Minister Laporte.