One Seychelles and the Private Sector

by Peter Sinon

There is indeed consensus today that the private sector is our economy’s ‘engine of growth’. What does that really mean? Well, it means that it is the private sector that is the principal generator of most of our wealth – our Gross National Income (GNI). When we divide the GNI by our population, we in theory, get a GNI per Capita (income per person) of US$ 12,376 or SCR221,478.

In theory, this is what we would all get annually if the wealth or income generated nationally is divided equally. This figure is the highest when compared to all other African countries. As a result, from the 16th July 2019 this has propelled Seychelles to be categorized as the first high-income country in Africa by the Bretton Wood institutions (World Bank & International Monetary Funds).

Against this backdrop, the above achievement begs one fundamental question which is “who are the stakeholders who are really benefiting from this created wealth?” Is it fairly distributed amongst the population or is it very much skewed to a privileged few multi-millionaires who, like our young heroine addicts, are addicted to amassing more and more wealth on the backs of the lucrative Seychelles economy?

Well, whilst the former would drag the economy down and undesirable path, the latter actually are the engines that pull the economy forward. The problem we have is that the handful of privileged entrepreneurs that have made it and are established spend much time, energy and resources to protect their respective empires and monopolistic arenas.

Parallel with this, we are witnessing the income inequality and relative poverty in Seychelles rise fairly high with a 2013 World Bank estimate GINI coefficient index of 46.8, ranking 25th amongst 159 countries. It is in this context that One Seychelles is looking at the local private sector and its critical role in reviving the post Covid-19 battered economy.

The private sector is made up of mainly two distinct categories of entities, especially in the tourism and fisheries sectors – the two main pillars of our economy. We have the Seychellois owned and managed entities and the foreign owned and controlled operators. We have the large, medium and small enterprises. We have those that employ mainly Seychellois and train them as the overwhelming majority of their staff contingent, and others that employ Seychellois as a token of their commitment or requirement for operating in Seychelles.

Private sector operators pay taxes that fund the government machinery, the social and disability welfare payments, road infrastructure and maintenance, and the educational and health systems to name just a few. Our Government, particularly the executive, has the responsibility of regulating and facilitating the private sector operations. In doing so, they are almost wholly responsible for the ease of doing business ranking of our Nation, which since 2012 have been steadily deteriorating to 100 in December 2019.

Unfortunately, and especially for Seychellois owned business operators, we have not made much progress in this critical area. This is because too often the agencies that deal with approvals of proposed projects and programmes seem to forget their essential role as ‘facilitators’, which should complement their role as regulators. Policies are too often developed and put in place without long-term planning or consultations – which effectively does not inspire much confidence in investors. Some are even withdrawn at the last minute without first assessing their implications for established businesses.

One Seychelles will give particular attention and priority to the Government’s role as a facilitator for business realization, addressing all the critical points of a project cycle, especially approvals for viable and apt project development in all sectors. In an enabling, transparent and business-friendly environment, focus will be given to those with the greatest potentials for Seychelles.

With the focus on re-building the tourism industry and strengthening our weak economy, it is necessary to give the private sector a generous boost in order for them to thrive once more. The Seychellois entrepreneurs (big, medium and small) should not be made to navigate countless hurdles to finally bring viable projects to life. The new hotel that is being built in the South of Mahe, for instance, had some stumbling blocks to overcome (i.e. change of use), but the entire procedure and process were so seamless and smooth. If only that could be the model being applied for all Seychellois-owned projects going through similar transformations! All investors, without exception, require consistency in policy implementation and guidelines rather than personalities with connections and powers of persuasion to get things done in our Country – the enabling environment should be established to work for all.

Running a successful business in Seychelles should not hinge on who you know. We have witnessed Government’s knee-jerk reactions on very sensitive issues such as the revocation of all GOPs of expat workers that were on annual leave overseas. That was done with no consultation and has had very severe and lasting impacts on some establishments. The Seychelles Chamber Commerce and Industry (SSCI), as well as other entities representing employers, aired their disappointment on such rash and non-consultative announcements that transgressed previously established Public and Private Sector Partnership (PPP) and consensual modus operandi.

In fact, the hard times of the ‘new normal of the Covid-19 era’ that have befallen us justify the initial One Seychelles call for a Government of National Unity and a more unified approach to reboot the Seychelles economy. This in turn rationally vindicates the intensification for a more institutionalized framework for ‘Private & Public Sector Partnerships’ to fill the missing infrastructural gaps and strategically consolidate our joint efforts for more sustainable progress.

Amongst the creators of our wealth are some strategic parastatals that are public entities but operated as private entities. Those include STC, PUC, IDC and others. Some, such as Air Seychelles, need much financial and other support from the taxpayers – whilst others such as SEYPEC and SCAA do cover their own operational costs and may sometimes provide dividends to the coffers of the state. It is clear that their priorities remain to reinvest to better their services and move with the times and technology to enhance quality and profitability of their respective ventures.

In this spirit, One Seychelles will dedicate much effort to reviewing a number of those parastatals – their potentials and performances. As a matter of priority, we shall propose and promulgate a legal framework for a wider and more transparent PPP operation in Seychelles. The new normal era calls for revamping of existing, as well as introduction of new, infrastructure to facilitate the seizing of all opportunities that have thus far either been neglected or strategically put on hold for the same powerful, influential actors to enter in yet another new venture.

The framework and procedures currently hindering business development shall be redressed and simplified. The known factors and strategic barriers to entry that impede private sector proliferation in certain sectors will, under One Seychelles, benefit from incentives including lower, affordable and simplified taxes that will give much needed oxygen to the Seychelles business community. This will encourage a larger number of tax contributors who will then be entitled to effectively demand better and more efficient and modern services.

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