"Five More Years With IMF in Seychelles"

The International Monetary Fund (IMF) has  completed the eighth and final review under the Extended Fund Facility (EFF) for Seychelles.  

The completion of the review will  enable a disbursement of SDR 3.3 million (about US$5.1 million), which will bring total disbursements under the arrangement to SDR 26.4 million (about US$ 40.7 million).
The EFF was approved in December 2009 for an amount of SDR 19.8 million (see Press Release No. 09/472) and was extended by one year in 2012, with an augmentation of access of SDR 6.6 million (about US$10.0 million).

Strong policies have fostered economic growth, brightening Seychelles’ near-term outlook. A robust rise in tourism earnings in 2013 supported growth, as well as a reduction in the current account deficit as a share of GDP.

The exchange rate strengthened slightly, at the same time as the central bank accumulated more international reserves than expected. Inflation decelerated below 5 percent, and the government is on track to achieve its 5 percent of GDP primary surplus target, as a shortfall in tax revenue and grants has been offset by lower-than-anticipated capital expenditure.

All performance criteria under the EFF for end-June 2013 were met, as were the third quarter indicative targets. The measures in the structural benchmarks were also all completed, although there were short delays compared to initial plans for technical reasons.

The authorities’ macroeconomic policy framework for 2014 provides a solid basis to continue to reinforce external and fiscal sustainability. The authorities remain on track with their objective to reduce public debt below 50 percent of GDP by 2018, while increasing allocations to address social needs.
Monetary policy will continue to aim to stabilize inflation at low levels and to accumulate international reserves, and the authorities and staff agreed on the need to strengthen the monetary policy framework to improve the transmission mechanism.

Structural reforms aim to extend improvements in financial discipline to the broader public sector, including through rebalancing utility prices to reduce implicit subsidies and through better oversight of parastatals, which staff stressed was key to avoiding potential future losses and ensuring better focus on their core mandates. Financial sector reforms seek to increase access to credit.

With the completion of this review, the EFF arrangement comes to an end. The program’s key objective of placing the economy firmly on the path to external and fiscal sustainability has been achieved, based on the successful implementation of the debt restructuring, robust fiscal consolidation, and the resumption of growth.
Public debt has been brought down from 124 percent of GDP at end-2009 to an estimated 71 percent at the end of 2013, reflecting an average primary surplus of over 6 percent of GDP and growth of 3½ percent.
Inflation has fallen below 5 percent. External reserves, a vital buffer for such an open economy, have improved from just over 2 months of imports at the start of the program to over 3½ months at the end of 2013.

While substantial progress has been achieved under the current Extended Fund Facility (EFF), the economy faces continuing vulnerabilities from still high debt levels, low reserve coverage, and an unfinished reform process. The authorities indicated their intention to request a successor arrangement with the IMF to consolidate and extend the progress made during this EFF. Discussions on a possible successor arrangement will continue early next year.
Source  IMF


  1. IMF though its pianful conditions on Seychellois has put Seychelles economy back from the brink but still fragile position.
    Would PP be abel due to their illiteracy in economy keep the momentum?Not sure.It seems the old habit is stronger than them.Even before IMF ended its comment ,Pp thugs had already given themsleves a salary increment of astronomic proportion.Pp has still not implement a range of instituional reforms to address weaknesses that led to the crisis.For instance,Pp still doesnot keep records,no transparency and accopuntability etc...this make things qutionable and doubtful if PP would learn from their mistake and keep the status quo left by IMF.

    The crisis in seychelles were first and formost due to mismanagement,bribery,nepotism,robbery,illiteracy of economy,patronage etcc by PP marons,and it seem that Pp is asking IMF to send someone else to continue doing the job from them because simply they are illiterate ineconomy and have no pinch of idea how to handle our bankrupted economy.IMF ahs done a considerable achievements,but strong policy effort still needed,e.g high unemployment rate,financail leakage due to high numberes of GOP,fianacail leakage from five star hotles which pruchase all their products from abroad,etc....

    The four lessons from the mess Pp created is that it demonstrats how pernicious feedback loop can be,weak balance of government,industries and households all interacted with each other.

    IMF would need to baby sit PP for a while,and for Seychellois this would be a relief ,ofor it at least deter massive corruption practices,and would help us avoid a second bankruptcy,for things under PP as we know never works,

    Jeanne D'Arc

  2. Mr Paul Chow and one or two you seem to still have a bit of Brain have been following your respective economic comments.

    Provide me the space and will do like Mr Christopher Gill and publish what we wrote to the Irish Central Bank and the Cabinet and the Irish PM.

    The so call Ireland Bailout/EU/IMF Fiscal Program is wrong - those in Ireland who are and have been using to the maximum that reloaded SIROP program and its USA very important connections - this is the way the world works. Then when others counter react - the labels they get affix with.

    Those at IMF who are utterly devious - they know of the relevancy and importance of that SIROP program in the Seychelles past and current economic workings equations and yet.

    We need some more Wikileaks and some more Snowden.

  3. Thanks Seychelles has no oil or it would be like South Sudan. This newest nation is rich in oil and gas but this wealth is already doomed by war! It is divided in two factions, one faction is the President and his army, the other is the vice-President and his rebels who wants to take power! And it was the President who appointed the vice-President not too long ago! - Does it remind you of something similar 36 years ago?
    The Seychelles Tourism was similarly doomed whilst Alain St. Ange was still 'Petit Prince de Ile'

  4. What IMF is saying does not make sense, anyone with some knowledge of accounting can see that IMF is painting a mirage to please the Seychelles Authorities.
    There are more questions than answers Mr. IMF. Are you telling Seychellois that everything is alright and they will not have to pay back what was borrowed? That it is alright to borrow and afterward beg for write-off? And that is the normal way to reduce debt burden? Did your disbrusement encouraged the authorities to double their salaries? Whoever you are Mr. IMF, you are not telling Seychellois the truth. The money problem is till there and bankruptcy No.2 is on the horizon. The mirage you painted smells and looks like corruption!

  5. 6.04
    We can questions IMF on many issues,including its refusal to challenge Pp on the u$2,5 billions in Swiss Bank,or on the lack of transparency and accoutatiblity on the part of PP thieves in regards to how the IMF loan is used.

    But we must also recognize that should IMF not jump in to rescue our economy bankrupted by Michel and FAURE,we would be in a worse condition.And things are still fragile,without genuine instituional refroms,tackling the massive corruption,nepotism,theft,bribery etc.... we will need many years more to cure our bleeding economy.

    Seychelles need honest,proffesional,inteliigent,integrated leader,and Pp thieves are not any of them.

    We cannot let thieves control our economy.

    Jeanne D'Arc

  6. 5 more years under IMF!


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