Opening Remarks – Investment Policy Review Inception Workshop

May 24, 2019

Address by Ambassador Maurice Loustau Lalanne, Minister of Finance, Trade, Investment & Economic Planning

 Thursday 23rd May 2019

 SS, Governor of the Central Bank of Seychelles, PSs, Deputy Governor of the CBS, CEOs, Private Sector Representatives and Partners, Ladies and Gentlemen Good morning,

Welcome to this Inception Workshop in preparation for the Investment Policy Review exercise being fully supported by the United Nations Conference on Trade and Development, UNCTAD.

Firstly, I would like to bid a very warm welcome to Seychelles, to Ms Chantal Dupasquier, Chief, Investment Policy Reviews, and Mr. Massimo Meloni, Economic Affairs Officer from UNCTAD who are with us this week for the initiation of this invaluable Investment Policy Review exercise.

Many years ago, the Government of Seychelles took the decision for a paradigm shift from a centrally planned economy where the state was the primary economic player, to one where the private sector takes over as the main driver of socio-economic development in the country.

Along the way many reforms have been undertaken with countless programmes and incentives and support schemes, many of which still exist today either in their initial form or adjusted to the current times.

Most of us in this room will remember the days of the reclamation of what is now known as Providence Industrial Estate, SIDEC, the YES Scheme, the Investment Promotion Act as well as the more recent and current Tourism Incentives Act, Agriculture & Fisheries Incentives Act, the SME Scheme and the Seed Capital Grant Programme. I should also mention the Seychelles Investment Board, Enterprise Seychelles Agency and its precursor, SEnPA. These are just to name a few to remind ourselves of the real commitment Government had and continues to exhibit towards developing the private sector.

Despite all the good intentions and the various programmes, we may all agree that the outcomes, although positive have not necessarily met our expectations. It is true that the private sector is today the main driver of our economy and the first pillar of our economy, tourism, is purely run by the private sector with Government, primarily through the Department of Tourism and the Seychelles Tourism Board, playing a satisfactory supporting role.

The Providence Industrial Estate is overflowing with private businesses and there is a long list of others still hunting for a space to base their businesses.

These are indeed signs of the emancipation of the private sector over the last 30 years or so.

Nonetheless, I still feel that Seychelles, despite its size, has a lot more to achieve.

Unfortunately, despite the many programmes and government relinquishing the economic sector to private initiatives, there are still concerns and dissatisfaction on the part of the private businesses when it comes to starting and operating a business.

Indeed, today Seychelles is ranked 96th amongst 190 countries in the World Bank Ease of Doing Business Index.

I for one, do not look at this low ranking and the continued reproach from the private sector about the difficulties they face in business as coincidences. There is definitely a clear message which we need to take heed of.

We need to fix things. Doing business should not be an obstacle race to see who can overcome, or circumnavigate, barriers and come out the other side unscarred and still fit to carry on.

On the contrary, we need to explore all means to bring about an environment where starting, operating and even winding up a business is as hustle free as possible. Of course, this, within the boundaries of Health, Safety and Security of the people, the environment and property.

Seychelles, by the fact that we depend significantly on import for most of our needs and increasingly human resources, has always been an open economy. Furthermore, we continue to join regional and multilateral configurations with the hope of increasing opportunities to the Seychellois business people as well as the individual.

It is true that as we look to benefit from such affiliations as the World Trade Organisation, COMESA, SADC and recently the Continental Free Trade Area, we are also opening up opportunities in Seychelles to the non- Seychellois business.

This may be however, only a small price to pay as we open up markets of millions in size for the local businesses, provided though, that our businesses are geared up and well supported to make the break through.

Hence the need to carry out a comprehensive review of the local business eco-system.

Over the last year, the Department of Investment has taken the task of reviewing the business environment in Seychelles with a bid to bring about consistency, predictability and confidence in the business environment. It is currently working with several partners from both the public and private sectors to review the investment procedures and policies and regulations that impact on the ability to do business.

We have managed thus far to come up, through the Seychelles Investment Policy, with the broad principles that should guide the manner in which all local entities having any form of impact on the business environment should treat the investment and business.

The Seychelles Investment Policy was launched in July 2018 and work is continuing with such bodies as the Office of the Registrar General, the Seychelles Planning Authority, the Public Health Authority, the Seychelles Fire Rescue and Safety Agency, the Department of Environment, the Central Bank of Seychelles as well as the Seychelles Licensing Authority amongst others, as they also have implications on the business ecosystem we wish to address.

Together, we have agreed on initiatives such as the development of a unique identifier for business, development of a business e-portal to serve as a digital one-stop shop for investment information and processes to name a few.

These measures will undoubtedly help improve the environment we do business in. However, unless done in a comprehensive manner, we risk going the same route as most of our previous programmes, bringing some change but not to the level of expectations.

It is in this light, that the Government has decided to call on potential partners, and in this case UNCTAD. We need to rely on the experts as much as we can if we hope to address the problem in a holistic manner.

Over the years UNCTAD has assisted many countries take a critical and extensive look at their business environment. So far, UNCTAD has undertaken the popular Investment Policy Review exercise in over 95 countries including our neighbours, Rwanda in 2007, Kenya in 2006 and Mauritius in 2001.

We will all agree that these economies are quite successful with growth rates, not to be ignored, their private sector operators thriving and they are all comfortably ranked in the World Bank Ease of Doing Business. Mauritius 20th, Rwanda 29th and Kenya 61st.

This Review will assess our legal, regulatory and institutional framework for investment and will also include the analysis of FDI-specific regulations such as investment laws, sectoral investment regulations and international investment agreements. It will also assess the general regulatory and operational aspects affecting both domestic and foreign investors such as issues related to tax policy, competition, trade, environmental protection, business operations and intellectual property matters amongst others.

Beyond the analysis of the investment climate, the Review will also examine the issues around strategic FDI attraction objectives of Seychelles. This will take into consideration the work being done by the Government as well as other development partners.

In keeping with Government’s approach to all policy, strategy and programme development and formulation, this exercise will be carried out through an extensive consultation process that will involve both public and private stakeholders as well as civil society.

This analysis, which begins now and is expected to last the best part of a year, should result in concrete policy recommendations to foster economic diversification, economic transformation, private sector development as well as institutional development and capacity building.

As is normally the case with UNCTAD, the finalization and publication of the Investment Policy Review will be followed by technical assistance activities to support implementation of the recommendations, build domestic capacities and improve the prospects for sustainable development.

Judging by the outcome in three mentioned countries, I am of the view that Seychelles stands to benefit substantially by deciding to go through this important soul searching exercise. However, any gains from this exercise is strongly hinged on all of us being committed, making ourselves available, providing the necessary and correct information and actively participating in the process including such workshops as this one.

I take this opportunity therefore, to call on all of us present, as well as others who could not join us today but who nonetheless have some form of involvement or influence on the business environment to offer your full cooperation.

It is pleasing to note that within just a few months of our formal request to UNCTAD for the Investment Policy Review exercise, they have responded, already carried out extensive desk top assessments of the related policies, strategies and legislations and they are in the country talking to us.

Such efficiency and most importantly, keenness to assist, is truly appreciated by the Government and people of Seychelles. I thank you Ms Dupasquier and Mr Meloni and through you the Secretary-General of UNCTAD for your willingness to contribute in our efforts to transform the Seychelles economy through the private sector.

I have high hopes and believe that with the support of UNCTAD, we can bring about the real change we want in the economic evolution of our beloved country.

Before I conclude, I wish to commend my Department of Investment for taking the initiative so that we finally do have a comprehensive evaluation of our investment and business environment and will hopefully soon have a clear plan for greater economic development through private sector participation and growth.

Of course, this milestone is only the beginning of so much more work and I expect the Department to see this through, all the while ensuring that this exercise remains very much a participatory process right through.

 Finally, let me wish you all an active and fruitful session.

 I thank you for your attention.

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