All indications are that the Minister of Finance misled the National Assembly on the 11th September 2007 when he announced yet another junk bond issued on the International Financial Market for and on behalf of the government of
In his address to the National Assembly Minister Faure stated that
However, the real reason for seeking the sovereign rating, it seems, was because the SPPF government had found it impossible to secure any fresh loans from International Financial Institutions and foreign governments as it had failed repeatedly to honour most of its loan obligations in the past. The USD 30,000,000 junk bonds which carried an interest of 9.125% came on the back of yet another massive junk bonds in 2006 in the sum of USD 200,000,000. Minister Faure stated that the latest bond will be repaid by the year 2011.
The first experiment with the pipeline system which the SPPF promised would solve the foreign exchange crisis happened on the watch of former President Rene and Norman Webber who acted as its architects.
Although the pipeline was a dismal failure it was revived by President Michel to induce the private sector to place their rupees with the Central Bank which in turn promised to pay the equivalent amount in foreign exchange to the suppliers overseas.
This has given credence to the adage that you can fool some people some of the times but you can fool a Seychellois all of the time! This is a lesson that the SPPF has taught us well as they have time and time again taken the people of
For instance, even though President Michel has announced that the law making it illegal for Seychellois to possess foreign exchange has been abolished, the same is yet to be formally repealed by the National Assembly, and people are continuing to be arrested and charged with such offences. Personnel of the Drug Squad (ADAMS) and National Drug Enforcement Agency (NDEA) have made it a habit to steal any foreign exchange and incidentally rupees found in any household after a “sois disant” drug search which can be done without a search warrant.
Their favourite line has been, that it is illegal to have foreign exchange in a house and the occupants may be charged with a foreign exchange related offence. Of course, this never happens and all the money mysteriously disappears soon after without a trace.
The new experiment announced by the President recently is the exercise to allow Seychellois to open foreign exchange bank account locally. Again even though the government has announced a change of policy, the law is yet to be amended to cater for the new policy.
As a result, for a Seychellois to open a foreign exchange bank account here has proven to be quite a challenge.
The second pipeline, as the first, it seems, was designed to hoodwink unsuspecting businessmen to place their hard earned rupees in the suspicious looking pipeline, in what appears to be yet another SPPF scam.
The government did not have the slightest inclination to pay out any foreign exchange in return for the rupees placed in the pipeline as only recently all the businessmen were given their money back without interest although their money had been in the custody of the Central Bank for over 5 years now.
In 2007 while announcing the issuance of the USD 30,000,000 dollar junk bonds, the Finance Minister, Mr. Danny Faure, told the National Assembly that: “Mr. Speaker the main reason for the USD 30,000,000 bond was to accelerate the effort of the Central Bank in clearing the commercial arrears in the pipeline. This means that we will systematically improve our environment to encourage investment.”
Minister Faure added that: “On the 6th October 2006 there was R.452 million in the pipeline. A sum of R.155 million had been withdrawn by the applicants themselves. A portion of the loan of USD 200,000,000 and USD 30,000,000 has been used to clear the large sum of money in the pipeline.
Today there is only a sum of R.102 million in the pipeline. Among the R.102,000,000 there is a sum of R.70,000,000 that do not have the necessary documentation to support the applications.” The Minister said that the Central bank was discussing the matter with the Commercial Banks and if the documentation was not forthcoming the sum of R.70, 000, 000 would have to be withdrawn from the pipeline. “This will leave only a sum of R.32,000,000 in the pipeline” the Minister said.
The reality today has presented a totally different picture. It appears that the highly rated Minister was being more than economical with the truth. Almost all the businessmen who had placed their money in the pipeline in the hope that they will get foreign exchange in return have been told that their money has been returned to their accounts with the commercial banks without interest. A shell-shocked man who received a letter from the
The question which begs an answer is what has the government done with the USD200,000, 000 and USD 30,000,000 if the same were not used to clear the pipeline as stated by the good Minister in the National Assembly?
In this day and age when President Michel had been elected on a manifesto of clean government, good governance, transparency and accountability, it is only fair that the government by the people, for the people and with the people be accountable to the people. If the USD 200,000, 000 and USD 30,000,000 had not been used to clear the pipeline, what was it used for then? Would the good Minister come on national television to give us an answer to this perennial question?
