IMF Support ensures government will meet all its financial obligations
September 01, 2021
The Ministry of Finance, Economic Planning and Trade has given further details on the first loan disbursement by the International Monetary Fund (IMF), following the agreement reached between Government of Seychelles and the international body.
Speaking to the media this morning, the Secretary of State in the Ministry, SS Patrick Payet, said the loan is going directly to finance the budget deficit for this year.
“As was said earlier, the Government is forecasting a budget deficit and this loan will assist to bridge that gap for this year.”
To recall, it was on 29th July 2021, that the IMF Executive Board gave its approval to financially support the Government’s Economic Reform Program.
The support is for a 32-month extended arrangement under the Extended Fund Facility (EFF) for a sum of US$105.63 million.
Following the approval, a first loan equivalent of US$ 34.26 million has been disbursed to the government.
SS Payet explained that the loan will enable the government to continue to finance its programs and expenses for the remaining of the year, such as salaries of public servants.
“This support being provided by IMF, should be seen as positive, as now government can continue to pay salaries and all of its other financial obligations, and guarantee the employment of public servants.”
This year, alone, Seychelles expects to benefit from $69 million in support from IMF.
The disbursement of $34.26 million is the first for this year, followed by the remaining balance of the $69 million, once an assessment is undertaken by IMF to ensure the government is attaining its targets.
“IMF will undertake quarterly assessment on the budget performance, in which it will assess whether the government is reaching its set targets; reducing budget deficit, attaining a budget surplus, and ensuring sustainability of its debt.”
SS Payet noted that under the agreement with IMF, the first repayment of the loan will commence in February 2026 and the last repayment will be in August 2031. In the interim, the Government will only be paying interest.
“The support of IMF has ensured stability in the country, if we had not had their support the impact on the whole country would have been grave.”