Seychelles on track to repay external debts, says government

According to ministry data, Seychelles’ total stock of debt for the first three quarters of 2022 stands at SCR 17.6 billion ($1.33 billion). (Gerard Larose)

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(Seychelles News Agency) – Projections made by the Ministry of Finance for 2022 indicate that Seychelles has a debt-to-GDP ratio of 68%, up from 92% in 2020 when the Covid-19 pandemic had a huge impact on the island nation.

According to ministry data, Seychelles’ total outstanding debt for the first three quarters of 2022 stands at SCR 17.6 billion ($1.33 billion), with just over SCR 7.76 billion of SCR (590 million dollars) due to multilaterals, bilaterals, trade. , and private creditors.

Compared to the previous quarter of the same year, external debt increased by SCR 307 million ($23 million) in the third quarter which ended in September.

This is attributed to the continued disbursement of budget support from the International Monetary Fund (IMF) and a loan from the Trade Development Bank (TDB) to repay Etihad debt relating to Air Seychelles debt and release the warranty on the airline’s twin aircraft. planes.

Most of the debt is owed to multilateral creditors such as the African Development Bank (AfDB), the European Investment Bank (EIB), the International Bank for Reconstruction and Development (BIRB) and the IMF, among others. This represents a total of over SCR 5.03 billion ($380 million).

At a press conference on Monday, the director general of the debt management division at the finance ministry, Dick Labonte, said Seychelles was on track to repay its external debts.

“We have just settled our debt with Libya and we still have debts with other countries. We are repaying them according to our agreements and this is done on good terms with these countries,” explained Labonte.

Of all the bilateral creditors, Seychelles owes the largest sum, amounting to SCR 590 million ($43.4 million) to the Paris Club. The Paris Club includes the group of major creditors – Belgium, France, Germany, Italy, Japan, Russia, Spain and the United Kingdom – whose role is to find coordinated and lasting solutions to help debtor countries that are experiencing debt payment.

Domestically, Seychelles debt stands at SCR 9.80 billion ($740 million) at the end of September 2022, representing a 0.2% increase in domestic debt and a 4.1% increase in the stock of external debt.

The increase in domestic debt is mainly attributed to an increase in the stock of treasury bills following a new issue in August. A reduction was however noted in the stocks of treasury bills, loans and other debts, as the government continues to service its debt.

The majority of domestic debt is in the form of securities, of which treasury bills make up the bulk at 60.5% of the domestic stock.

With the country predicting a primary fiscal surplus of SCR 330.3 million ($25 million), representing GDP growth of 1.1% in 2023, Seychelles should be in a better position to repay its debts.

“Based on the good performance, over the medium term, we expect our debt to have been reduced to 55.3% by the end of 2025. The government aims to reduce its debts to around 50% by 2026 , which was the objective before the pandemic. All of this will be supported by the good performance of the economy and the good fiscal consolidation,” said Labonte.