(3 minutes read)
- The International Monetary Fund (IMF) has approved the second disbursement, a sum of US$34 million loan to Seychelles
- In the meantime, Cabinet of Ministers decided that employees at state-owned enterprises would not receive any bonuses or incentives for 2021
- The disbursement is a part of the 32-month extended arrangement under the Extended Fund Facility (EFF) for a total sum of US$105.6 million.
The International Monetary Fund (IMF) has approved the second disbursement, a sum of US$34 million loan to Seychelles. In the meantime, Cabinet of Ministers decided that employees at state-owned enterprises would not receive any bonuses or incentives for 2021.
The disbursement is a part of the 32-month extended arrangement under the Extended Fund Facility (EFF) for a total sum of US$105.6 million.
IMF agreed to the disbursement after it had assessed Seychelles’ progress towards the reform targets it had set. Therefore, the disbursement of the second tranche would be a logical next step. This was revealed by Patrick Payet, the Secretary of State for Finance, Seychelles. This disbursal will get reflected in the country’s budget for 2022.
The first portion of the loan given to Seychelles as part of this agreement was in July for US$34 million. Next year, a disbursement of US$19 million is expected to be given. The same amount will be disbursed in 2023 to meet its resource requirements. Seychelles asked for larger sum this year because of the huge budget deficit compared to what is being forecast for 2022 and 2023.
In the meantime, the Indian Ocean country is expected to make numerous reforms across all sectors, with more targets set in order for the next part of the loan to be disbursed. Reforms in tax administration is uppermost in the reform agenda. For that, the country’s tax administration has been working with the IMF officials.
Minister for Finance, Naadir Hassan, said that the Board of Cabinet of Ministers has decided that state-owned enterprises will not pay staff any bonuses or performance incentives for the year 2021 as an austere measure to control the galloping fiscal deficit. The minister said that recent events, including a strike by workers of the Public Utilities Corporation (PUC), were caused mostly because of a failure from the board of directors and management of the companies to manage expectations.
