“WE ARE IN A MESS!” Says Captain Guy Adam
The popular "face-a-face "television show aired on SBC has finally caught the imagination of the general public. The high powered panel of Afif, Hoareau, Adam, Pool and Payet gave a stunning and unparallel display of dabate at the highest level which left the viewers breathless and gasping for more. Guy Adam, the impressionable head of Seypec and a director on the board of the controversial Corvina group, left an indelible mark in our hearts and minds when he candidly admitted that “we are more in a mess today than we were two years ago.” This shocking remark came after Bernard Pool had questioned the government’s justification for increasing taxes on fuel which was R 5 per litre, two years ago, to R. 8 per litre, this year alone. Bernard Pool, who gave an impressive display overall also reproach the SPPF government for treating foreigners like Gods but Seychellois like lepers when it comes to business and investment in Seychelles. Whereas foreigners get all the concessions such as exemptions from social security payments, pension scheme, business tax, GST, GOP etc, the government has systematically persecute Seychellois businesses even to the point of prosecution but failing to give Seychellois investors any concessions whatsoever.
If there is one thing the participants failed to deal with in the debate, it was the issue of corruption which is at the roots of all our malaise. How else can one explain a foreign investor getting exemptions and concessions for 20 years, if money had not exchanged hands somewhere along the way? There are Ministers who are alleged to have been buying and selling foreign exchange on the black market, getting large portions of State lands for peanuts or even losing 4.5 million dollars overseas to a bogus businessman without so much as a whimper from the SPPF government as the dirty deal was conveniently swept under the carpet never to re-surface again. Captain Guy Adam also shockingly revealed that Seypec is not audited at all and large sums of money could have easily been stolen from this parastatal without the government noticing. However, this comment was seen as a direct attack at the other parastatals such as SMB where millions have mysteriously disappeared without accountability or transparency rather than Seypec specifically.
Several other startling revelations also came out from the show on SBC-TV which focused on the state of the national economy. Overall there was a frank exchange of views in the debate which projected a distorted economy, with a two-tier parallel monetary system (rupee and forex) reminiscent of Communist failed States like Cuba, used as currency by different class of people. The two tier system has also been accused of being illegal as the Central Bank Act provides that only Seychelles rupee is legal tender here. The end result is a country in total chaos with the right hand not knowing what the left hand is doing. If only the SPPF could listen for once instead of behaving in an arrogant matter as if they know what is best for the rest of us.
Even Finance Principal Secretary, Ahmed Afif, was finally able to pluck up the courage to lamely accuse the government of having “no financial discipline.” He also acknowledged that the 2008 budget projected to yield a R 200 million surplus, was already R 50 million in deficit. Though blaming the global rise in fuel and food prices as usual, Afif admitted the situation was difficult and government was still subsidising some parastatals which were a drain on the national economy. He further commented that there was no forex to meet our commitments. He said $80 million had recently been borrowed from commercial banks and the International Monetary Fund (IMF) is advising on how to balance our books. He said that a nod from the IMF could help secure loans from multilateral institutions which had grounded to a halt forcing the government to borrow money from the International Financial Markets and commercial banks at exorbitant rate of interest. Afif also said that the SPPF government owes the local commercial banks 5 billion rupees in bonds, securities and treasury bills issued by the Central bank to raise money for the government.He also candidly admitted that Seychelles has external debt totaling 660 million dollars and rising.
Reputed chartered accountant, Bernard Pool, who is also active in the Seychelles Chamber of Commerce and Industry ( SCCI) , hit the nail right on the head, when he stated that we must reduce our expenditures, wastage and abuses, stopping short of using the word “ corruption” which to many viewers sounded proper to sum up the grim situation. He said that the government should do away altogether with concessions, exemptions and incentive schemes which are costing the country millions of rupees and foreign exchange in loss revenue every year. Pool emphasized that the government was giving away too much to investors who had a feeling that Christmas had come early for them in the Seychelles. They come here flashing some dollars and it’s the SPPF government giving them virtually everything for nothing. He recalled that since 1994, government had through the IPA ( Investment Promotion Act) been giving away 20-year concessions such as, reduced taxes, social security contributions, GOP for expatriate workers, cheaper fuel to foreign hoteliers etc. This was replaced in 2006 by the TIA (Tourism Incentive Act), with a 10-year span. Pool said the two-tier monetary system encouraged by Government requiring visitors and even residents to settle charges in foreign currency, had resulted in loss of confidence in the rupee and a flourishing parallel marked. No degree of devaluation will change that, even if we make the exchange rate R25 to the dollar. Pool also noted that some large companies dealing in foreign currency were paying only 3% tax, while others mostly Seychellois-owned were being charged 40%!
Pool referred to the contradictions as highlighted by boat owner, Michel Gardette, in the last program, notably that the Investment
Code was violated by a revised tourism policy, allowing foreign hotels to bring in their own pleasure craft and chauffeur driven vehicles.
His colleague from the SCCI, Mr. Albert Payet, also emphasized the distortions in the economy, saying if there were reasons to give some incentives in 1994, because investor confidence was zero, there was no reason to go on our knees now. He said the concessions were unfair pointing out the ludicrous situation where most 20 room establishments were now bringing more foreign currency into the government’s kitty than 5-star establishments.
On the 9,000 strong expatriate workforce, Payet disagreed with a statement by Frank Hoareau, formerly of the Central Bank and later Barclays, who said this was necessary, including in the offshore sector. Payet argued that expatriates could be reduced to half after noting that some Seychellois had stopped becoming productive because of bad habits, such as drug abuse and alcoholism which had been tolerated. But more so because of the cradle to the grave policy of the SPPF government. The Seychelles workforce is only 40,000.
Hoareau, who is now the head of the first offshore bank here, BMI, which is a joint venture between an Arab group and Nouvobanq, should be more wary of the dozens of foreigners, notably Australians, crowding the small offshore sector. Some of these guys are novices and though we could use some experts who have proven their mettle, we clearly have no need for “learners” at this stage.
There were also allegations that some 5-star hotels are cooking the books. This newspaper has learnt that one, which is Mauritian-owned, had declared a profit of only R1.6 million in the five-year period before closing down for renovation.
After impressing Government by “flashing some dollars” , they all borrow from commercial banks. Call it price-fixing or cooking the books, most of them are out to make a quick buck at the expense of the Seychellois, who pick up the pieces after some fat cats have carved away their chunk.
Though Adam’s contribution added a touch of humour to the debate, Adam’s statement has given rise to grim concern as public funds are involved. James Michel is clearly in big trouble when some of his associates get it off their chest that way. We admire his frankness and “grandeur d’esprit” but we fear this is not welcomed by the SPPF. We hope President Michel takes heed of the comments which were no doubt constructive. If you deny a problem and don’t deal with it, then you can’t face it.