The new New Zealand High Commissioner to Seychelles, H.E Michael Upton, paid a courtesy call on the Minister for Finance, National Planning and Trade, Naadir Hassan, on Friday 06th May, 2022.
Discussions during the meeting focused on the economy, climate change and adaptation, limited sources of financing available, investment in infrastructure, the banking sector, AML/CFT works being undertaken to meet international standards, and the issues impacting on the cost of living.
Minister Hassan, noted that due to the current fiscal consolidation required to ensure the country’s debt goes back to a sustainable pathway, there was limited fiscal space for investment in key infrastructure. Moreover, access to concessionary financing were limited due ‘high income’ status of Seychelles.
“As a small island state, vulnerable to many external shocks, Seychelles should not be penalized for managing its affairs properly. Because of its ‘high income’ status, we are not able to access concessionary loans.’
He pointed out also that the main challenge facing the government is the high cost of living, emanating from supply chain issues caused by the Covid 19 crisis and also the impact of the Ukraine war on commodity prices.
“Seychelles as a small island state, dependent on importation and which do not benefit from economies of scale, is bearing the brunt of the high cost of commodities on the international market. Inflation is continuing on its upward trend; thus the government is having to come with new mechanisms to assist those in the lower income bracket, at a time when budget is limited.”
High Commissioner Upton, acknowledged that the last two years, have been tough, for New Zealand as well, and currently his country is also being hit with high inflation because of the high cost of commodities worldwide and ‘issues around supply chain.’
The topic of climate change and adaptation was also part of the discussions, with both Minister Hassan and High Commissioner Upton acknowledging that small island states, ‘should be treated differently’ as they ‘contribute less to climate change, yet they will be most impacted.’