Economic reform gets IMF’s valued stamp of approval |17 November 2008

Finance Minister Danny Faure and the bank’s governor Pierre Laporte said the endorsement is a door opener for fresh negotiations with the world’s financial bodies.

The IMF on Saturday asked bilateral and commercial external creditors to engage with Seychelles in “good faith negotiations to secure debt restructuring aimed at reestablishing public debt sustainability, consistent with Seychelles long-term payment capacity” (see separate article).

“We are very happy. It’s a first for Seychelles. It shows the programme is a solid one. It’s a programme that we in Seychelles have worked on so it’s our programme – a home-grown programme -- and the IMF has given it’s seal of approval,” the minister told Nation and the international media after a news conference he and the governor addressed on Saturday.

He said as happens with some countries, IMF could have failed to endorse the programme or postponed doing so, declined to or deferred the offer of a standby arrangement.

“Some countries do not get the funds immediately as we have done by getting an immediate disbursement of US $9.13 million from the total of US $26.1 million,” Minister Faure said, referring to the amount given to support the reform.

He said subsequent funds will be released upon periodic review of the programme and confirmation it is following the steps necessary to achieve set targets.

The minister and the governor said negotiations have in fact already started and that principal secretary for Finance Ahmed Afif has left the country for talks with the Paris Club regarding rescheduling of our debts and other groups and individuals who bought Seychelles bonds. He said the IMF approval will also allow talks with the World Bank towards speeding up of delivery of assistance that Seychelles has requested it, and that a team from the bank is due here next month.

Seychelles now also expects to get help from the African Development Bank (AfDB) and the European Union Fund.

Mr Laporte, who with Mr Afif held talks with AfDB, said the bank is fully supportive of Seychelles’ reforms and is willing to consider sponsoring a donors’ conference.

The press conference on Saturday was attended by all sectors of the local print and electronic media and the minister stressed on the need to release information in a transparent manner.

He announced formation of an information bureau under his ministry that can be reached on telephone number 723000 or email address info@finance.gov.sc for queries related to consumer issues, privatisation, cost of living, monetary matters, tax, business opportunities, social safety net, home care, training and employment.

Minister Faure also gave every media house in the country a copy of the 82-page staff report analysed by the IMF on Saturday for the executive directors to reach their decision to approve our programme. Nation hopes to publish further details from the conference tomorrow.