- The parliament of Seychelles has unanimously given the green light for the country's Central Bank to operate as an independent institution. The decision was made following an advice by the International Monetary Fund (IMF), which in July 2002 had detected a weakness in the Bank's supervision system and handling of the government's financial sector.
Seychellois Minister for Economic Planning, Jacquelin Dugasse, presented the bill to parliament to assure autonomy to the Central Bank, which is becoming the normal way of organising a government financing bank worldwide. The government, Minister Dugasse said, agreed that it was necessary to introduce new, modern regulations to enable the Central Bank to comply with international standards and adopt good practices.
The bill, he said, had been formulated following a series of consultations the government had had with IMF. The enactment of the bill, according to Minister Dugasse, would allow the Central Bank to "operate without government interference to realise its corporate objectives, ensure accountability and transparency in the supervision of the monetary system and to ensure price stability by introducing measures to control inflation."
Minister Dugasse said that studies undertaken showed that there was a close link between the independence of a Central Bank and the economic performance of a country. The bill, he said, came at the right time now that the government was launching a new platform to foster economic growth and boost investors' confidence in Seychelles.
A Board of Directors, comprising a Governor and Deputy Governor and four other members to be appointed by Seychelles President James Michel, will be responsible for the running of the Central Bank. The Board of Directors is to "consult" with the Head of State, who "will not dictate to them," according to Mr Dugasse.
The government proposal found full support in the Seychellois parliament, also among opposition MPs. While the Seychellois ruling party has a socialist past, the opposition generally has favoured economic liberalisation such as the emancipation of the Central Bank.
Opposition MP Terence Mondon thus said the move was "another step forward in its liberalisation policy and is similar to the measures the opposition has been proposing over the past years." Mr Mondon however was concerned the Bank would not become independent enough, given President Michel's wide powers.
Seychelles has one of the strongest economies in Africa, but the Indian Ocean island nation has experienced economic stagnation during the last few years. Successes in the tourism sector have prevented a deeper focus on economic reform and the Seychellois economy in many ways is governed by worn-out models from the nation's socialist and authoritarian past.
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