Press communiqué is issued by the SCCI Secretariat

SCCI’s Position on Macro-Economic Adjustments

The Seychelles Chamber of Commerce & Industry (SCCI) recognises the actions being undertaken by Government aimed at addressing some of the macro-economic issues that have plagued the nation for far too long.

1. Review of the Exchange Rate Policy – Recent steps taken by Government to realign the Seychelles Rupees is seen by the SCCI as a step in the right direction. However, the SCCI maintains the view that the economy will only be redressed when the Seychelles Rupee can become fully convertible and measures that fall short of ensuring the full convertibility of the Seychelles Rupee will clearly have only limited success. Furthermore, the SCCI recognises that the move by Government to set a floor to the fall of the Seychelles Rupee will serve to maintain some stability in the market and confine some of the negative effects of the devaluation.

2. Opening Foreign Currency Accounts – The SCCI welcomes the announcement that the Central Bank of Seychelles will allow ordinary citizens to hold foreign currency accounts in the local commercial banks. The SCCI now awaits the publication of details of and procedures for opening such accounts. It is hoped that apart from real anti-money laundering issues, no restriction will be imposed on the operation of these accounts.

3. Increase in Minimum Interest Rates on Deposits – The SCCI welcomes the move by Government to increase minimum interest rates on deposits which increase is in line with proposals very recently made by the SCCI to Government. However, the SCCI believes that in order to attract more savings, the interest rate should be higher than the 3.5% being proposed.

4. Minimum Salaries – The move by Government to set minimum salaries is welcome on condition that such minimum salaries are applicable to all sectors and industries across the board. The SCCI strongly recommends that any minimum salary levels be set only after direct consultation with the SCCI and be based, amongst other issues, on an hourly rate aimed at encouraging greater productivity.

5. Salary Increases – The SCCI warns strongly against any attempts to force increase in salaries at this time. Any salary increases at this point may be counterproductive to the benefits obtained from the realignment of the Seychelles Rupee, especially the improved competitiveness and profitability of investments. As long as compensation for employees is based on the last salary, any salary increases will have devastating consequences on business profitability and cash flow.

6. Price Control – The SCCI maintains its position of many years that price control has been a major contributor to high prices of all commodities in Seychelles and acknowledges that it has been discussing the abolition of price control with Government.

The SCCI does recognise the need for any new measures to take into account the protection of the more vulnerable members of the community from any negative impact that may arise, in the short term, from the abolition of price control. The move proposed by the consumers’ protection group to publish CIF prices based on prices of commodities effective in the region may prove counter productive due to limited market for products in Seychelles.

SCCI - 16th October 2007

October 19, 2007
Copyright 2007: Seychelles Weekly, Victoria, Mahe, Seychelles