Seychelles Government Seeks Supplementary Budget Approval Amidst National Budget Cuts

Seychelles Government Seeks Supplementary Budget Approval Amidst National Budget Cuts

The government of Seychelles has sought the approval of the National Assembly for a supplementary budget exceeding SCR275.5 million ($20.2 million) for the year 2023. This request was made during the mid-year budget review where the government also announced a cut surpassing SCR345.8 million ($25.4 million) from the total national budget for 2023. The supplementary budget is being financed through a reduction in budget expenses amounting to SCR 621,370,992.77 ($45.7 million).

Vice President Ahmed Afif presented the budget review, explaining that the additional budget is required to cover wages and support the extended mandate of the Truth Reconciliation and National Unity Commission (TRNUC). This reallocation is also necessary to cover employees moving under the new Communications Authority and the transfer of workers from the now-defunct AIDS National Commission to the Public Health Authority.

Salary Cuts and Fiscal Performance

Despite the additional budget, there will also be a cut in salaries amounting to SCR 106.3 million ($7.8 million), and SCR 19.3 million ($1.4 million) from other wages. There will be a reduction of SCR26.2 million ($1.9 million) in different ministries, departments, and agencies, and SCR4 million ($293,000) under other goods and services.

The Vice President also reported on the fiscal performance for the first half of 2023, noting a primary fiscal surplus of SCR365.8 million, or 1.2 per cent of GDP, significantly higher than the projected SCR15.4 million or 0.1 per cent of GDP. He explained that the government has collected more revenue and spent less than expected.

Capital Projects and National Debt

There is a recommended additional budget of SCR 197.6 million ($14,3 million) for capital projects and a reduction of SCR 324 million ($23.5 million). The reduction is attributed to projects that will not be completed in 2023, many of which are financed through grants and loans.

The total debt of Seychelles at the end of June 2023 stood at SCR17.7 billion ($1.3 billion), or 63.9 per cent of GDP, slightly lower than the debt at the end of 2022. The government anticipates that the debt will reach SCR18.6 billion, or 62 per cent of GDP, by the end of the year. The Vice President reassured that the government’s debt remains on a sustainable trajectory.

Based on the performance of the first six months and negotiations with the International Monetary Fund (IMF), a primary fiscal deficit of SCR70.98 million ($5.1 million) or 0.24 per cent of GDP is expected for 2023.