President James Michel has said that in spite of the recent increases in the price of fuel and utilities, the country needs to maintain its economic achievements so as not to regress to pre-2008 fiscal difficulties.

The President was speaking during the En Moman avek Prezidan programme aired on SBC television yesterday evening.

“We need to maintain our economic achievements. To regress after having worked so hard will be our greatest mistake,” the President said.

“We have to make some more sacrifices now to maintain our economy on a strong foundation so that when the situation in the world improves we will be better placed to move forward faster for the benefit of our people,” he said.

Following the recent increases in the cost of fuel on the international market which has resulted in a hike in the price of fuel at the pump locally and consequently in a 15% rise in the rates of utilities, Mr Michel said fortunately mechanisms put in place are still allowing us to maintain the present bus fare.

He said that the government has had no choice though but to increase the price of fuel at the pump and that of utilities.

Mr Michel stressed that as the president of the people, with the responsibility of a government working for the wellbeing of the people, he has not allowed an increase in the rates of utilities just because he wanted to do so.

He said the government and the concerned parties have taken time to study all possible options and mechanisms so as to spare the population from the impact of an increase in the cost of utilities. 

“But after all options had been analysed, the government was left with no choice but to increase the rates by 15% across the board,” he said.

President Michel however noted that these increases are not as high as those being applied by other countries.

“Seychelles, after all, does not produce fuel but has to sell it at the price it buys,” said the President.

Mr Michel noted that the government is still undergoing its economic reform programme and therefore does not have the kind of money to subsidise fuel prices which in itself is not the norm under the reform programme.

“I do not believe the people want our country to revert back to the economic situation before 2008  where black market was rampant, with shops running out of goods,” said the President.

Mr Michel noted that faced also with increases in the prices of food and cost of transportation which have diverse effects on our economy, Seychelles has to absorb all the extra costs. And in order to do so, the country has to continuously seek better ways to overcome these challenges in order to survive.

“But faced with these difficult decisions, we as a people who understand, who have stood strong during the period of economic reforms, need to once again show that same resilience to surmount the present difficulties,” the President added.

Mr Michel reminded the people that they should at the same time be grateful that our situation is not as bad as in many other countries which are being hit very hard and where unemployment is rising alarmingly.

He said here in Seychelles fortunately there are enough jobs for everyone who want to work and many of these positions are being occupied by foreigners.

Mr Michel said the Ministry of Labour and Human Resource Development has to intensify its effort to continue providing training and skills to our people who would eventually replace the foreigners in these positions.

Referring to the increases in the cost of utilities, Mr Michel said measures are being taken by the Housing Finance Company (HFC) to review certain repayment conditions and for the Social Protection Agency to closely review financial help for the most vulnerable people in our society.

“It is very important for a government who cares for its people to continue to support the most vulnerable members of its society,” said Mr Michel.

He noted that what we are going through should also serve as a lesson to highlight the need for us to develop and nurture a culture of savings, which could come in handy in difficult times.

He said people should start to act more responsibly and review their use of utilities, adding that the government itself should lead by example and cut down further on wastage in ministries and departments.

He once again maintained that no supplementary funds will be allocated to any ministry or department to cater for the increases in the costs of utilities.

While it is widely accepted that people earning higher salaries will be less affected and are better placed to absorb the increases, those same people will be among the first to adjust their lifestyles while many of those people considered vulnerable are very unlikely to make any adjustments and moreover will continue to receive more financial help which is considered very unfair on those who are working very hard.

In response to this, Mr Michel said a lot is being done and measures are being reinforced to ensure that as many people on the welfare system are put in employment.

He said the Ministry of Labour and Human Resource Development has been ask to consider introducing part-time schemes which would offer people already in a job the opportunity to supplement their earnings through part-time employment.

He also explained that social protection is there to also help people who are in employment but whose salaries do not suffice to take care of their expenses.

But there again Mr Michel stressed on the need for people to take their responsibility and to find a job if they can work and the Social Protection Agency will meet them half-way.

With regard to the rising costs of fuel it is believed that if the government was to tighten loopholes in tax revenue collection and reduce tax on fuel this would probably reduce the cost of fuel locally.

Mr Michel noted that under the reform programme with the International Monetary Fund (IMF), Seychelles has certain obligations which include meeting some fiscal targets at the end of the year. This means we have to respect these targets which also include the amount of revenue collected in relation to the expenses the country makes.

Therefore as long as the country cannot predict an excess in revenue collected, it cannot reduce taxes because it would affect the fiscal targets at the end of the year.

Mr Michel said that what is important is for government to reinforce measures to reduce its expenses as much as possible.

The President added that reducing taxes is not as simple as it sounds and that the economy as a whole has to be considered.

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