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Financial aid for businesses harmed by COVID-19 to be re-oriented to tourism industry only

Victoria, Seychelles | February 20, 2021, Saturday @ 10:28 in Business » FINANCE | By: Daniel Laurence Edited by: Betymie Bonnelame | Views: 4911
Financial aid for businesses harmed by COVID-19 to be re-oriented to tourism industry only

The businesses directly related to tourism fall under an affirmative list and those not on the list will no longer receive the assistance. (File photo: Joe Laurence, Seychelles News Agency)

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(Seychelles News Agency) - A scheme set up in Seychelles to help businesses affected by the COVID-19 pandemic will now cater only for businesses directly connected to tourism for the months of February and March, said a top official.

The Financial Assistance for Job Retention (FA4JR) scheme was set up in March last year to guarantee salary payments for employees and self-employed individuals during the economic downfall caused by the COVID-19 pandemic. It was revised in July to apply only to Seychellois employees and self-employed individuals.

The Secretary of State for finance, Patrick Payet, told a press conference on Thursday, that those businesses directly related to tourism fall under an affirmative list and those not on the list will no longer receive the assistance.

"However, those that are still on it and have employees will receive 50 percent assistance. But we are telling businesses to advise the ministry if any of their employees have resigned so the payment could be revised. Self-employed individuals will get a fixed payment of SCR5,804," said Payet.

Businesses falling under the new affirmative list are self catering establishments, hotels, restaurants, administrative and support services such as airlines, yacht charters, Destination Management Companies, tour guides, travel agents, musicians and artists, entertainment and recreation and transportation.

The chairperson of the Seychelles Chamber of Commerce (SCCI) said that employers have expressed strong concern over the proposed changes, particularly the proposal to cease the scheme by the end of March.

"The scheme has provided significant support to employers to continue their operation and retain their existing workers despite the financial hardship due to the pandemic's impact. A sudden stop of the scheme may result in a potentially severe and counter-productive implication on employers and businesses including closure and redundancy, which is undesired in the effort to accelerate growth and recover from the crisis," said Bastienne.

He added that SCCI takes note of the current state of the financial situation of the country but urges the government to consider continued support measures to targeted employers to avoid the risk of increased businesses closing down.

As an alternative to the FA4JR, SCCI seeks an urgent discussion with the Central Bank of Seychelles (CBS) and the Ministry of Finance with regards to the potential modification of the two other assistance measures set up -- the private sector relief scheme and the small business support fund.

"This can include a review of the qualifying expenditure list, interest rates being applied and the process of application. These schemes were introduced to provide financial support to businesses that genuinely need help to sustain and continue operation," said Bastienne.   

According to the Ministry of Finance, a total of SCR1.26 billion ($52 million) was disbursed last year. The budget was reduced to SCR692 million for the beginning of 2021.

On her part, the chairperson of the Seychelles Hospitality and Tourism Association (SHTA), Sybille Cardon, said that with the phasing out of the scheme a lot of establishments will close down or some will have to lay-off employees.

"As a result a lot of businesses connected to tourism activities will also have to close down. Maybe big hotels with foreign investors can absorb the economic shock, but the impact would be really felt by small businesses," she told SNA.

"The cash flow that we had two or three years ago is not the same. Aside from the salary, we have other operational costs to bear. So definitely if we stop the financial scheme, we will not be able to sustain our businesses," added Cardon.

Seychelles, an archipelago in the western Indian Ocean, depends largely on tourism and the downturn in travel due to the pandemic has greatly affected the country's economy.

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Tags: Financial Assistance for Job Retention, COVID-19

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