Purpose and management of the assessment
Since the first PEFA assessment performed in 2008, the Government of Seychelles (GoS) implemented successive Macroeconomic and Financial Reform Programmes (MEFP) 2008-13 and MEFP 2014-16. The 2014-16 MEFP includes a timeframe for the reform measures that are envisaged and is signed by the Minister of Finance and the Governor of the Central Bank.
The purpose of this PEFA assessment is to assess the current performance of the Public Financial Management (PFM) system in the Republic of Seychelles and to analyse the evolution of the performance since the previous assessment performed in 2011. The PEFA/PFM Performance Measurement Framework (PMF) is one of the elements of the Strengthened Approach to supporting PFM reforms developed by the World Bank (WB), the EC and other development partners.
The International Monetary Fund (IMF) in its December 2015 report recommended that a repeat PEFA be undertaken in 2016, in order to assess progress made in implementing the 2012-2014 PFM Action Plan and to identify remaining challenges. The adoption of a revised PFM Action Plan by the end of the year is one of the structural benchmarks retained under the IMF extended arrangement.
This PEFA assessment for the Republic of Seychelles was based on 2016 PEFA methodology. It covered the core financial management and planning systems for the institutions of the central government funded from the national budget. The assessment covered the years 2013-2015. A comparison has also been made with the 2011 PEFA assessment, based on the 2011 methodology, in order to analyse the progress that was made since.
This PEFA 2016 Assessment was performed by two international experts in PFM, MM Jean Marc Philip and Ferdinand Pot from the ECORYS Company.
The PEFA assessment was coordinated by the MOFTEP, who liaised with all the services and institutions concerned with this exercise, including the Auditor General and the National Assembly. The focal point designated on the government side was Mr Patrick PAYET, currently the Principal Secretary for Finance at the MOFTEP, assisted by Damien THESEE, the Comptroller General of the Financial Planning & Control Division in the MOFTEP.
The other focal point was appointed by the Delegation of the European Union, as Mr Rajesh PARBOTEEAH, Project Manager at EEAS-PORT LOUIS, MAURITIUS. Interlocutor vis-a-vis the other stakeholders of the project: the IMF, the World Bank and the PEFA Secretariat.
The World Bank and the IMF took part in this assessment only for reviewing the different versions of the reports and providing comments.
Main strengths and weaknesses
Measures to improve the efficiency of Public Investment Management (PIM) have not been completely addressed and challenges remain to better defining public investments in line with national and line ministries strategies.
The efficient use of public resources is not correctly monitored yet, due to the lack of use of Business Intelligence tools, which would have enabled gathering and consolidation of information (data warehousing) and define Key Performance Indicators.
The MOFTEP strongly monitor the budget execution, with a surplus at the end of the year for the recent years, but the level of debt is still high in comparison with similar economies.
More transparency could easily be attained with a timely publication of in-year budget execution reports on the web site of the Ministry of Finance and statistics upon public procurement. Indeed, the number of contracts awarded through open tenders seems to have decreased during the last three years, which is not in line with the international standards.
Improvements also remain necessary in the domains of internal and external controls, essentially to move towards a performance audit instead of regularity audit and improve the efficiency of public services delivery.
A Programme Performance-Based Budgeting (PPBB) has been piloted in five ministries in Seychelles for the 2016 Budget and it will be rolled out to the remaining ministries in the 2017 budget. The PPBB will entail a programmatic presentation of estimates of expenditure with a description of programmes and programme objectives. Presently, indicators to measure programme performance and the resultant changes to budget allocations are not included.
Based on the analysis on how information has been included in the PPBB statements of the five pilot ministries, the programme performance based expenditure allocations will be presented for all line ministries and other budget users for the 2017 and 2018 budgets.
Evolution of the Indicators scoring since the previous PEFA assessment
The use of the PEFA framework 2011 provides a basis for tracking PFM performance progress since the previous assessment and for reviewing the effectiveness of PFM reforms that have been implemented.
Since the PEFA 2011 evaluation, the Government of Seychelles has successfully undertaken major reforms in PFM through the PFM Act 2012 and the 2012-2014 PFM Action Plan. The government has targeted to implement a series of reforms to address public sector governance, including: (i) the alignment of institutions with policy and service delivery mandates; (ii) the completeness and transparency of budget execution and procurement. (ii) the reduction of the number of parastatals, and improving their monitoring/management (iii) redefining the accountability structure between the government agencies responsible for service delivery.
The present assessment points out that the performance of the GoS has carried on improving, in spite of the fact that significant progress had already been observed in comparison with the PEFA assessment performed in 2008.