Seychelles officially signs agreement to settle long standing debt repayment to Libya

December 13, 2022

Seychelles has formally signed an agreement with Libya to settle a debt repayment from an original loan amounting to $3 million, dated back to 1981.

Under the ‘settlement agreement’, the principal debt amounting to $3.655 million is to be paid in one cash installment within three months of the signing of the document.

Whereas the interest accrued on the debt amounting to $885,000, will be paid in two installments during 2023

In an earlier interview with the daily newspaper, Seychelles Nation, the Director General of the Debt Management in the Ministry of Finance, National Planning, Dick Labonte, explained that “with the financial crisis in 2008, Seychelles defaulted on the majority of its loans repayment, leading to renegotiations with creditors to reschedule its debt as part of the IMF reform programme which the country embarked on. The loan from Libya was also part of the rescheduled loan”.

Mr. Labonte, noted however, that in 2010, as per the ‘settlement Agreement’, with Libya, Seychelles effected the first repayment of the debt. A total of US $977,000 was paid to Libya.

However, no other payments were effected thereafter, due to the instability in Libya at the time. Nonetheless, a special account was set up at the Central Bank of Seychelles and payments were effected as per the agreed specified amount annually, until the Libyan authority could confirmed their account and receipt of payment.

The conclusion of the repayment of this long standing debt, followed a meeting between Minister Naadir Hassan and his Libyan counterpart, Dr. Khalid Al Mabrouk Abdalla, on the margin of the IMF/World Bank meetings in October, 2022, where both parties agreed to settle the debt.

On Monday 12th December, the signed debt repayment agreement, by both sides, was officially handed over by Minister Hassan to the Libyan Ambassador in Seychelles and a representative from the Libyan Ministry of Finance.

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