Years of underinvestment in electricity infrastructure has left Nepal with one of the most unreliable power supplies in South Asia, putting a brake on the country’s economic growth.
In response, Asian Development Bank’s (ADB) Board of Directors has approved a loan of $65 million equivalent to strengthen and expand electricity transmission and distribution facilities in a bid to cut network losses and reduce frequent supply interruptions and outages, said the manila-based bank in its press release.
Funds will also be used to upgrade two hydropower plants, introduce compact fluorescent lamps, and install solar and solar-wind powered streetlights in a push to boost energy efficiency, increase the use of clean renewable technologies, and take some of the strain off the national grid. Public-Private franchising partnerships will be developed in selected urban areas to improve service quality to consumers, providing a model that could be replicated in future.
The Energy Access and Efficiency Improvement Project will support the Government of Nepal’s long-term vision to provide universal coverage using grid-based and off-grid supplies by 2027. Installed generating capacity at the end of 2008 was 615 MW with just 33 per cent of households connected to the national grid.
“The project will strengthen and increase supply capacity, increase consumer connections, improve the finances of the state-owned Nepal Electricity Authority, and eventually allow for increased cross-border energy trade, giving the economy a boost,” said Priyantha Wijayatunga, Energy Specialist in ADB’s South Asia Department.
An estimated 20,000 additional households are expected to directly benefit from the distribution improvements, while all 1.5 million grid-connected electricity consumers will receive more reliable power supplies. The installation of 1,000 solar and solar-wind streetlights in municipal areas of Bhaktapur, Kathmandu and Lalitpur will improve safety, particularly for women and children, while the project is expected to reduce an estimated 15,000 to 20,000 tons of carbon dioxide emissions annually.
ADB’s loan from its concessional Asian Development Fund covers 69% of the project cost of $93.7 million. The loan has a 32-year term, including a grace period of 8 years. Interest is charged at one per cent per annum during the grace period and 1.5 per cent per year for the rest of the term.
Grants totaling $4.5 million from the Climate Change Fund and Multi-Donor Clean Energy Fund, administered by ADB, will also be provided. The Government and Nepal Electricity Authority will supply the balance of $24.2 million. Nepal Electricity Authority is the executing agency for the project which is due for completion around September 2014.
Friday, November 27, 2009
Tuesday, November 24, 2009
Airports' upgrade in Nepal to increase safety, boost tourism
The Asian Development Bank (ADB) will help Nepal appeal to even more tourists through a project to improve the country's airports and civil aviation safety standards.
The ADB Board of Directors approved a total of $80 million – including a grant of $10 million and a loan of $70 million equivalent – to finance the Nepal Air Transport Capacity Enhancement Project.
The project will improve safety and capacity at Tribhuvan International Airport (TIA) in Kathmandu, and three domestic airports – Lukla, Rara and Simikot – that serve remote areas inaccessible by road. TIA, Nepal's only international airport, will be reconfigured and upgraded to international safety standards, with the project including provision for the construction of 1.4 km of new taxiways, a new power supply system, the refurbishment of its international terminal and the construction of a new temporary domestic terminal. The three domestic airports will receive improved communication equipment, visual approach aids, and weather equipment.
“Due to the challenging terrain in Nepal, air transport is an essential part of the country’s transport system, providing access to many remote towns and villages in the mountainous areas,” said Dong-Kyu Lee, Transport Specialist in ADB’s South Asia Department. “Providing safe and reliable aviation access to the country will attract more tourists and greatly contribute to Nepal’s economy."
With international and domestic passenger traffic expected to increase significantly in the next four years, the project will also seek to enhance the organisational effectiveness of the Civil Aviation Authority of Nepal, the regulatory body that controls the country's aviation industry. Existing regulations will be updated to meet international standards and viable opportunities for private sector participation in future airport developments will be identified.
ADB's grant and loan, from its concessional Asian Development Fund, covers 87 per cent of the project cost of $92 million. The Government of Nepal will contribute the remaining 13 per cent. The ADB loan has a 32-year term, including a grace period of eight years. Interest is charged at one per cent per annum during the grace period and 1.5 per cent per year for the rest of the term.
The Civil Aviation Authority of Nepal is the executing agency for the project, which is due for completion around the end of 2014.
The ADB Board of Directors approved a total of $80 million – including a grant of $10 million and a loan of $70 million equivalent – to finance the Nepal Air Transport Capacity Enhancement Project.
The project will improve safety and capacity at Tribhuvan International Airport (TIA) in Kathmandu, and three domestic airports – Lukla, Rara and Simikot – that serve remote areas inaccessible by road. TIA, Nepal's only international airport, will be reconfigured and upgraded to international safety standards, with the project including provision for the construction of 1.4 km of new taxiways, a new power supply system, the refurbishment of its international terminal and the construction of a new temporary domestic terminal. The three domestic airports will receive improved communication equipment, visual approach aids, and weather equipment.
“Due to the challenging terrain in Nepal, air transport is an essential part of the country’s transport system, providing access to many remote towns and villages in the mountainous areas,” said Dong-Kyu Lee, Transport Specialist in ADB’s South Asia Department. “Providing safe and reliable aviation access to the country will attract more tourists and greatly contribute to Nepal’s economy."
With international and domestic passenger traffic expected to increase significantly in the next four years, the project will also seek to enhance the organisational effectiveness of the Civil Aviation Authority of Nepal, the regulatory body that controls the country's aviation industry. Existing regulations will be updated to meet international standards and viable opportunities for private sector participation in future airport developments will be identified.
ADB's grant and loan, from its concessional Asian Development Fund, covers 87 per cent of the project cost of $92 million. The Government of Nepal will contribute the remaining 13 per cent. The ADB loan has a 32-year term, including a grace period of eight years. Interest is charged at one per cent per annum during the grace period and 1.5 per cent per year for the rest of the term.
The Civil Aviation Authority of Nepal is the executing agency for the project, which is due for completion around the end of 2014.
IFC helps Nepal plan expanding financial services
IFC, a member of the World Bank Group, is helping microfinance institutions and banks in Nepal discuss strategies for expanding financial access by mobilizing deposits and using banking technologies such as payment cards, mobile phones, and retail agents. Microfinance institutions, banks, payment providers, regulators, and development partners from Nepal along with institutions from Bangladesh and India participated in the discussions at a workshop hosted by IFC at the request of the Nepal Rastra Bank (NRB).
Senior executives from Nepal Rastra Bank, Nirdhan Bank, Everest Bank, Bangladesh’s BRAC Bank, and Indian firms BASIX and FINO, were among those participating in the workshop on Expanding Access to Finance in Nepal: The Opportunity of Deposits and Banking Technologies. The conference was organized by SouthAsia Enterprise Development Facility, managed by IFC in partnership with the United Kingdom’s Department for International Development and the Norwegian Agency for Development Cooperation. Participants shared experiences, best practices, and innovations in other developing and emerging economies to explore opportunities for deposit mobilization and use of innovative technology in Nepal.
Bijaya Nath Bhattarai, governor of the Nepal Rastra Bank (NRB), said, “By engaging in a dialogue involving all the stakeholders, the workshop provides an opportunity to exchange ideas and determine how financial services can be extended beyond the current coverage of 30 percent of Nepal’s population. “
Microfinance institutions and banks discussed technologies that can transform and expand financial services. They also outlined the needed business models and regulatory framework required and shared experiences in Nepal and the South Asia region.
Speaking at the workshop, Anil Sinha, IFC General Manager for Advisory Services in South Asia, said: "The workshop provides a platform for microfinance institutions and banks to make financial services accessible to underserved people in Nepal, particularly those in rural areas who lack access to banks.”
By working closely with microfinance institutions, banks, and payment providers across South Asia, IFC assists in strengthening financial institutions and supporting appropriate regulatory frameworks.
IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets. Along with IBRD, it is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries—including by supporting institutions to extend financial services to underserved communities in Nepal.
To learn more about IFC’s activities in South Asia, visit www.ifc.org/southasia.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis.
Senior executives from Nepal Rastra Bank, Nirdhan Bank, Everest Bank, Bangladesh’s BRAC Bank, and Indian firms BASIX and FINO, were among those participating in the workshop on Expanding Access to Finance in Nepal: The Opportunity of Deposits and Banking Technologies. The conference was organized by SouthAsia Enterprise Development Facility, managed by IFC in partnership with the United Kingdom’s Department for International Development and the Norwegian Agency for Development Cooperation. Participants shared experiences, best practices, and innovations in other developing and emerging economies to explore opportunities for deposit mobilization and use of innovative technology in Nepal.
Bijaya Nath Bhattarai, governor of the Nepal Rastra Bank (NRB), said, “By engaging in a dialogue involving all the stakeholders, the workshop provides an opportunity to exchange ideas and determine how financial services can be extended beyond the current coverage of 30 percent of Nepal’s population. “
Microfinance institutions and banks discussed technologies that can transform and expand financial services. They also outlined the needed business models and regulatory framework required and shared experiences in Nepal and the South Asia region.
Speaking at the workshop, Anil Sinha, IFC General Manager for Advisory Services in South Asia, said: "The workshop provides a platform for microfinance institutions and banks to make financial services accessible to underserved people in Nepal, particularly those in rural areas who lack access to banks.”
By working closely with microfinance institutions, banks, and payment providers across South Asia, IFC assists in strengthening financial institutions and supporting appropriate regulatory frameworks.
IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets. Along with IBRD, it is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries—including by supporting institutions to extend financial services to underserved communities in Nepal.
To learn more about IFC’s activities in South Asia, visit www.ifc.org/southasia.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis.
Wednesday, November 18, 2009
MAURITIUS BUDGET 2010: FM Sithanen plays Santa
PORT LOUIS: Finance minister Ramakrishna Sithanen today presented his fifth budget keeping the common man in mind. Nearing election year, Sithanen’s presentation is not likely to raise eyebrows.
The budget for the year 2010 – made to coincide with the calendar year for the first time – has its focus on accelerating the private sector investment, mitigating the economic crisis and creating more jobs, ensuring social security including low cost housing, water supply and sewage – and sustainable development while stressing on Greener Mauritius. The budget also promises to promote culture and sports too.
“The Balance of Payments (BoP) has turned around from a deficit of 4.9 billion in 2005 amounting to 2.6 per cent of GDP to a surplus as from 2007,” Brunel University doctorate finance minister said adding that “despite the crisis the surplus is projected to be around Rs 13.5 billion ($452 million) for 2009, representing about 4.8 per cent of gross domestic product (GDP).”
He has, however, projected a fiscal deficit at 4.5 per cent. But the government borrowing requirement will only be four per cent of the GDP, because it is going to raise Rs 1.5 million from the listing of Mauritius Telecom (MT).
Painting a rosy picture of the island nation’s economy – in his over two-hour long budget speech in the parliament house – he hailed the role of Small and Midium Entreprises (SMEs) as according to him, in the past four years, these enterprises have generated 24,000 new jobs, accounting for 60 per cent of the total 40,000 jobs created. “In 2008, the economy has created more jobs for women than men,” he said.
The good news for the business community is that he has kept the tax rates unchanged. However, the budget has targeted to raise Rs 66.8 billion in revenue that is up by 21.9 per cent than the last year.
Due to its traditional mono-crop economy, the budget has a various packages for the sugar industry sector.
He has continued the Additional Stimulus Package (ASP) until December 2010 to mitigate the crisis because of the positive outcome from ASP during the year. The budget vows to provide support of Rs 900 million to local authorities compared to some Rs 45 million they used to receive annually and maintain the additional Rs 100 million for infrastructure
development in Rodrigues.
Though, he is worried about the very high budget deficit. The expansionary macroeconomic policies -- in particular stimulus Measures -- have triggered a rise in household consumption as a percentage of GDP to 75.2 per cent in 2009 from 74.3 per cent in 2008. As a result the saving rate is expected to fall to 12.8 per cent in 2009.But according to the finance minister, the Indian Ocean Island nation has survived the crisis. He attributed the survival of the economy despite the global crisis, to reforms.The Central Statistics Office (CSO) has predicted a growth rate of 2.8 per cent for 2009 and 4.3 per cent for 2010. By 2011, he said, the economy will rebound and be on track for five per cent and above.
FDI
FDI averaged around Rs 1 billion annually for the two decades ending 2005. We have taken this yearly average to around Rs 8.4 billion since 2005. Following the reforms in 2006, we have attracted more than Rs 30 billion of FDI. This year, in the midst of the crisis, we are expecting around Rs 9 billion of FDI. The FDI is also more diversified than in the past, coming from various countries and flowing into almost all sectors of the economy. Two months ago the Jin Fei project was inaugurated. It is the single largest FDI in our history, for an investment of Rs 25 billion over eight years, creating some 40,000 jobs, both direct and indirect.
National Savings
National saving rate in Mauritius has been historically high, staying above 20 per cent for most of the years since independence. However, as from 2001 it has been on a decline. The situation could have tightened the capacity to finance investments. But it has not. During the period 2006 to 2009, average monthly rupee deposits at banks have grown by around 40 per cent, outpacing GDP growth and generating enough liquidity to meet investment needs. In fact, all types of deposits, including savings, time and foreign currency have been rising at rates exceeding GDP growth. The savings-investment gap is also reflected in the current account of the Balance of Payments (BoP). The Net International Reserves have gone up from Rs 56.3 billion in 2005 to around Rs 100 billion – an 80 per cent increase. Our country has enough foreign currency reserves to pay for 42.8 weeks of imports compared to 31.4 weeks in July 2005.
Current Account
The current account deficit is expected to be lower at around nine per cent of GDP. The BoP has turned around from a deficit of Rs 4.9 billion in 2005, amounting to 2.6 per cent of GDP to a surplus as from 2007. Despite the crisis, the surplus is projected to be around Rs 13.5 billion for 2009, representing 4.8 per cent of GDP.
Agro-Industry
One of the traditional pillars of the country’s economy – the sugarcane Industry – has bounced back and expanded by around 22 per cent, including an 18.2 per cent growth in 2009. “The government’s vision of food security has been fruitful as the stage has been set for the production of 10 million litres of milk per year as from 2010 and 12 million litres by 2011. The Food Security Fund is also financing the purchase of fibre glass boats for off lagoon fishers. The Fishermen Investment Trust is funding activities that were previously inaccessible for artisanal fishermen, including fish farming in cages, integrated fish culture projects in barachois and purchase of boats for off lagoon fishing in Mauritius and in Rodrigues. The Marine and Agricultural Resource Support (MARS) programme is implementing pro-poor reforms and institutional development, marine resource management, and diversification of rural incomes and employment in Mauritius and Rodrigues.
Textile
The textiles and clothing sector was recovering from its deep recession, expanding its output by up to 8.5 per cent in 2007. But it was caught in the
global crisis, stagnating in 2008 and its output shrinking by four per cent in 2009.
Tourism
The tourism sector has been booming before the global crisis hit the island nation. It expanded by an annual average rate of 7.8 per cent from 2006 to 2008 with a peak of 15.2 per cent in 2007. But this year, it has been hit by the crisis, showing a negative 7.6 per cent growth.
Financial sector
The financial industry has come out relatively unscathed from the global financial turmoil. It will grow by some six per cent this year. The sector is showing an annual average growth rate of around 7.6 per cent for the period 2006 to 2009.
ICT/BPO
The ICT/BPO sector has grown by 40.8 per cent in the past three years and is expanding by 16.2 per cent this year. It is now contributing 5.8 per cent to GDP from less than one percent in 2005 and is employing 12,000 persons.
Construction
The construction industry has been experiencing its best period in many years. Its growth averaged 10.5 per cent annually for the period 2006 to 2008. This year the slowdown in real estate and IRS and RES activities have affected its output, while public investment in infrastructure has enabled it to maintain a positive growth of 2.5 per cent. The real estate sector is maintaining a healthy growth pace, averaging seven per cent for the period 2006 to 2009 and expanding by about six per cent in 2009.
Health care
The health centre of excellence has become a reality - providing world class services to Mauritians as well as to foreign clients. The number of beds in private clinics has increased by 56 per cent since 2005 to more than 800. There are now 19 private clinics in Mauritius in contrast to 12 in 2005.
Infrastructure development
The budget continuing its focuses on infrastructure development – including eco friendly infrastructure – has promised to modernise and expand import.
“Over Rs 15 billion have been allocated to extend, improve and create new road networks. Out of which Rs 1.3 billion to maintain and rehabilitate round 600-km of roads. The construction of the additional carriages and road ways will add 360 km of roads to the network,” he said.
He has also allocated budget for the Port. The Mauritius Container Terminal berth is being strengthened and expanded and the seabed is being deepened to 16.5-m at a cost of Rs 3.5 billion to allow the Port to meet growing traffic and attract larger vessels,
Agriculture
To enable planters and breeders to optimise their revenue, AREU is setting up an agricultural production and marketing information system. It will provide planters with real time market intelligence on crop production and prices by using mobile phone technology and posting information on a central website. Relevant information for breeders will also be supplied. To encourage the development of high-tech sheltered farming the government is introducing a scheme to provide technical assistance for the design and implementation of projects. It will also advance 90 per cent of the investment costs on soft terms, with a moratorium on payments for three years. It is setting up a scheme to assist sugar co-operatives to obtain the Fair Trade accreditation from the EU. This will enable them to obtain a premium of $60 per tonne of sugar. Government will advance the funds on soft terms for 75 per cent of the costs of consultancy and the application fee of Rs 150,000. Government has instead decided to set up a Cane Democratisation Fund to hold the 35 per cent stake in the various companies. The shares currently held by the Sugar Investment Trust in milling companies will be transferred to the Cane Democratisation Fund. In return, the shareholders of SIT will own shares of corresponding value in the Cane Democratisation Fund. Shares in the Cane Democratisation Fund will be offered to planters, labourers and artisans.
Bounty for the employees
Upto Rs 12,000 monthly salary holders – 3.5 per cent increment
Above the Rs 12,000 – Rs 450
The budget for the year 2010 – made to coincide with the calendar year for the first time – has its focus on accelerating the private sector investment, mitigating the economic crisis and creating more jobs, ensuring social security including low cost housing, water supply and sewage – and sustainable development while stressing on Greener Mauritius. The budget also promises to promote culture and sports too.
“The Balance of Payments (BoP) has turned around from a deficit of 4.9 billion in 2005 amounting to 2.6 per cent of GDP to a surplus as from 2007,” Brunel University doctorate finance minister said adding that “despite the crisis the surplus is projected to be around Rs 13.5 billion ($452 million) for 2009, representing about 4.8 per cent of gross domestic product (GDP).”
He has, however, projected a fiscal deficit at 4.5 per cent. But the government borrowing requirement will only be four per cent of the GDP, because it is going to raise Rs 1.5 million from the listing of Mauritius Telecom (MT).
Painting a rosy picture of the island nation’s economy – in his over two-hour long budget speech in the parliament house – he hailed the role of Small and Midium Entreprises (SMEs) as according to him, in the past four years, these enterprises have generated 24,000 new jobs, accounting for 60 per cent of the total 40,000 jobs created. “In 2008, the economy has created more jobs for women than men,” he said.
The good news for the business community is that he has kept the tax rates unchanged. However, the budget has targeted to raise Rs 66.8 billion in revenue that is up by 21.9 per cent than the last year.
Due to its traditional mono-crop economy, the budget has a various packages for the sugar industry sector.
He has continued the Additional Stimulus Package (ASP) until December 2010 to mitigate the crisis because of the positive outcome from ASP during the year. The budget vows to provide support of Rs 900 million to local authorities compared to some Rs 45 million they used to receive annually and maintain the additional Rs 100 million for infrastructure
development in Rodrigues.
Though, he is worried about the very high budget deficit. The expansionary macroeconomic policies -- in particular stimulus Measures -- have triggered a rise in household consumption as a percentage of GDP to 75.2 per cent in 2009 from 74.3 per cent in 2008. As a result the saving rate is expected to fall to 12.8 per cent in 2009.But according to the finance minister, the Indian Ocean Island nation has survived the crisis. He attributed the survival of the economy despite the global crisis, to reforms.The Central Statistics Office (CSO) has predicted a growth rate of 2.8 per cent for 2009 and 4.3 per cent for 2010. By 2011, he said, the economy will rebound and be on track for five per cent and above.
FDI
FDI averaged around Rs 1 billion annually for the two decades ending 2005. We have taken this yearly average to around Rs 8.4 billion since 2005. Following the reforms in 2006, we have attracted more than Rs 30 billion of FDI. This year, in the midst of the crisis, we are expecting around Rs 9 billion of FDI. The FDI is also more diversified than in the past, coming from various countries and flowing into almost all sectors of the economy. Two months ago the Jin Fei project was inaugurated. It is the single largest FDI in our history, for an investment of Rs 25 billion over eight years, creating some 40,000 jobs, both direct and indirect.
National Savings
National saving rate in Mauritius has been historically high, staying above 20 per cent for most of the years since independence. However, as from 2001 it has been on a decline. The situation could have tightened the capacity to finance investments. But it has not. During the period 2006 to 2009, average monthly rupee deposits at banks have grown by around 40 per cent, outpacing GDP growth and generating enough liquidity to meet investment needs. In fact, all types of deposits, including savings, time and foreign currency have been rising at rates exceeding GDP growth. The savings-investment gap is also reflected in the current account of the Balance of Payments (BoP). The Net International Reserves have gone up from Rs 56.3 billion in 2005 to around Rs 100 billion – an 80 per cent increase. Our country has enough foreign currency reserves to pay for 42.8 weeks of imports compared to 31.4 weeks in July 2005.
Current Account
The current account deficit is expected to be lower at around nine per cent of GDP. The BoP has turned around from a deficit of Rs 4.9 billion in 2005, amounting to 2.6 per cent of GDP to a surplus as from 2007. Despite the crisis, the surplus is projected to be around Rs 13.5 billion for 2009, representing 4.8 per cent of GDP.
Agro-Industry
One of the traditional pillars of the country’s economy – the sugarcane Industry – has bounced back and expanded by around 22 per cent, including an 18.2 per cent growth in 2009. “The government’s vision of food security has been fruitful as the stage has been set for the production of 10 million litres of milk per year as from 2010 and 12 million litres by 2011. The Food Security Fund is also financing the purchase of fibre glass boats for off lagoon fishers. The Fishermen Investment Trust is funding activities that were previously inaccessible for artisanal fishermen, including fish farming in cages, integrated fish culture projects in barachois and purchase of boats for off lagoon fishing in Mauritius and in Rodrigues. The Marine and Agricultural Resource Support (MARS) programme is implementing pro-poor reforms and institutional development, marine resource management, and diversification of rural incomes and employment in Mauritius and Rodrigues.
Textile
The textiles and clothing sector was recovering from its deep recession, expanding its output by up to 8.5 per cent in 2007. But it was caught in the
global crisis, stagnating in 2008 and its output shrinking by four per cent in 2009.
Tourism
The tourism sector has been booming before the global crisis hit the island nation. It expanded by an annual average rate of 7.8 per cent from 2006 to 2008 with a peak of 15.2 per cent in 2007. But this year, it has been hit by the crisis, showing a negative 7.6 per cent growth.
Financial sector
The financial industry has come out relatively unscathed from the global financial turmoil. It will grow by some six per cent this year. The sector is showing an annual average growth rate of around 7.6 per cent for the period 2006 to 2009.
ICT/BPO
The ICT/BPO sector has grown by 40.8 per cent in the past three years and is expanding by 16.2 per cent this year. It is now contributing 5.8 per cent to GDP from less than one percent in 2005 and is employing 12,000 persons.
Construction
The construction industry has been experiencing its best period in many years. Its growth averaged 10.5 per cent annually for the period 2006 to 2008. This year the slowdown in real estate and IRS and RES activities have affected its output, while public investment in infrastructure has enabled it to maintain a positive growth of 2.5 per cent. The real estate sector is maintaining a healthy growth pace, averaging seven per cent for the period 2006 to 2009 and expanding by about six per cent in 2009.
Health care
The health centre of excellence has become a reality - providing world class services to Mauritians as well as to foreign clients. The number of beds in private clinics has increased by 56 per cent since 2005 to more than 800. There are now 19 private clinics in Mauritius in contrast to 12 in 2005.
Infrastructure development
The budget continuing its focuses on infrastructure development – including eco friendly infrastructure – has promised to modernise and expand import.
“Over Rs 15 billion have been allocated to extend, improve and create new road networks. Out of which Rs 1.3 billion to maintain and rehabilitate round 600-km of roads. The construction of the additional carriages and road ways will add 360 km of roads to the network,” he said.
He has also allocated budget for the Port. The Mauritius Container Terminal berth is being strengthened and expanded and the seabed is being deepened to 16.5-m at a cost of Rs 3.5 billion to allow the Port to meet growing traffic and attract larger vessels,
Agriculture
To enable planters and breeders to optimise their revenue, AREU is setting up an agricultural production and marketing information system. It will provide planters with real time market intelligence on crop production and prices by using mobile phone technology and posting information on a central website. Relevant information for breeders will also be supplied. To encourage the development of high-tech sheltered farming the government is introducing a scheme to provide technical assistance for the design and implementation of projects. It will also advance 90 per cent of the investment costs on soft terms, with a moratorium on payments for three years. It is setting up a scheme to assist sugar co-operatives to obtain the Fair Trade accreditation from the EU. This will enable them to obtain a premium of $60 per tonne of sugar. Government will advance the funds on soft terms for 75 per cent of the costs of consultancy and the application fee of Rs 150,000. Government has instead decided to set up a Cane Democratisation Fund to hold the 35 per cent stake in the various companies. The shares currently held by the Sugar Investment Trust in milling companies will be transferred to the Cane Democratisation Fund. In return, the shareholders of SIT will own shares of corresponding value in the Cane Democratisation Fund. Shares in the Cane Democratisation Fund will be offered to planters, labourers and artisans.
Bounty for the employees
Upto Rs 12,000 monthly salary holders – 3.5 per cent increment
Above the Rs 12,000 – Rs 450
Tuesday, November 17, 2009
MAURITIUS BUDGET 2010: People on Finanace Minister’s mind
PORT LOUIS: When the Finance minister reads out his budget speech on Wednesday he will keep ‘people’ in mind. His focus might also be on accelerating growth across various sectors.Since this is the last budget of this government, there is a high probability that it will "put people first" and therefore attempt an early harvest even though the financial space created was used to sustain the economy. Do not also expect any new reforms to be initiated, though existing reform programmes are doing fine.
Priority will thus have to be the safeguard of employment through various supports to businesses like continuation of stimulus packages and the maintenance of heavy public investment in infrastructure and other projects. This, unfortunately, could be at the cost of not bringing down the budget deficit to a manageable level.
The GDP growth should be propped back to its average level of five per cent so that jobs could be created and the debt-servicing eased through tax buoyancy.
That the economy is back on normal growth pattern and some more measures have been taken on the social front such as wage compensation, a betterment of the purchasing power and eradication of absolute poverty are pluses for the minister.
One can expect that the government to focus on utilities, particularly water supply and wastewater disposal programmes.
At the same time, investments in infrastructure and the stimulus package are keys to ensure job preservation and creation. The stimulus package that the government has offered has been fruitful. So it should be maintained as a shock observer for a traditional economy like ours that is still suffering from the global economic downturn. However, the government might review some of the programmes without disturbing the social dimension.
The MID (Maurice Ile Durable) fund could be reactivated in the context of the Copenhagen conference on climate changes and so would food security through regional initiatives.
The last budget has predicted budget deficit to GDP to rise to 4.8 per cent in December 2009 and it seems to be close to reality as the government spending continues to oil the wheel of the economy.
To eradicate poverty, the government has put in a lot of effort. The implementation of the two per cent Corporate Social Responsibility (CSR) Levy will soon be a reality and will go a long way towards poverty alleviation.
The major MID programme needs more regulatory framework for alternative forms of energy. This is more the priority as the price of oil looks to rocket further and electric cars seem to be of lesser priority.
Developing large infrastructure projects is a must to propel the economy. Infrastructure needs of this island country are high compared to available resources. This gap remains and therefore the focus will remain.
As Mauritius is a welfare state, the government has given a lot of emphasis on social security programme. The reinforcement of Mauritius as a Welfare State will and should continue as it will help those below the poverty line.
Among the sectors that might benefit could be the Small and Medium Enterprises (SMEs) segment that needs a re-look as it faces many challenges. Another sector expected to benefit would be the crisis-hit tourism industry.
Finally the common man will benefit as more jobs would be created and preserved, and social security benefits could be enhanced.
The budget could also have some surprises as there could be revised legislation to ensure a level playing field and any loophole is plugged for the new regulations in IRS/RES projects.
Though the government has been talking a lot about Knowledge Hub, Ile Durable, 24/7 working environment, it should also add a new working culture with a new mindset to be able to take the economy to the next level.
The reforms initiated since minister Sithanen’s first budget, if completed, will ensure that the country moves to the next level.
(In conversation with BDO De Chazal Du Mée's CEO Yacoob Ramtoola, corporate finance partner Afsar Ebrahim, and consultant Dr Babu Rajpatti.)
Rama Krishna Sithanen
Vice-Prime Minister and Minister of Finance and Economic Empowerment
Education: B Sc Economics (with First Class Honours), an MSc Economics (with a Mark of Distinction) at the London School of Economics and a PhD in Political Science from Brunel University
Tenure: Minister of Finance ( Sep 1991 to Dec 1995, 2005 to present). Elected to the National Assembly for Belle-Rose/Quatre Bornes (2005)
Distinction: Chosen by the Switzerland-based World Economic Forum in 1994 as one of the 100 Global Leaders for Tomorrow
Friday, November 13, 2009
Price hike starts to cool down
The price hike that has zoomed up last year has started to cool down.
According to Nepal Rastra Bank (NRB), the year-on-year (y-o-y) inflation -- as measured by the consumer price index -- moderated to 9.3 per cent in Mid-October 2009 against 14.1 per cent in the same period last year.
The food and beverage group -- especially Vegetables, sugar and sugar related products -- have become more expensive than last year.
Sugar and sugar related products have become more expensive as it increased by a whopping rate of 42 per cent in compared to an increase of 39.5 per cent in the same period last year. Similarly, the price indices of vegetables and fruits increased by 37.5 per cent in sharp contrast to last year's decline of 10.1 per cent.
Similarly, the price indices of pulses as well as meat, fish and eggs sub-groups also increased by 25.1 per cent and 22.7 per cent respectively compared to an increase of 24.7 per cent and 22 per cent in the same period last year, said the NRB.
Though, the prices of food and beverages have not come down, the prices of non-food and services group came down by over six times. “The price index of food and beverages group increased by 15.6 er cent but the index of non-food and services group rose only by two per cent,” said the central bank said adding that the index of food and beverages and non-food and services group had risen by 15.2 per cent and 12.9 per cent respectively in the first three months of last fiscal year.
Within the group of non-food and services, the index of tobacco and related products rose up by 17 per cent against to a rise of 12.7 per cent during the same period last year. However, the price index of transport and communication declined by 8.7 per cent in comparison to an increase of 23.1 per cent during the same period last year.
Surprisingly, the prices in Kathmandu Valley, Tarai and Hills have moderated as the price index of Kathmandu Valley rose by 9.7 per cent and followed by 9.4 per cent in Tarai and 8.5 per cent in Hills against 14.5 per cent, 14 per cent and 13.9 per cent last year.
The y-o-y core inflation also moderated to 10.9 per cent from 13.1 percent a year ago, the central bank’s data revealed.
Similarly, the salary and wage rate index also rose by more than a double to 22.1 per cent in comparison to a rise of nine per cent a year ago. “The increase in basic salary and allowances of civil servants and its simultaneous effect on salary of the private sector contributed to such an increase in salary index,” concluded the NRB report.
According to Nepal Rastra Bank (NRB), the year-on-year (y-o-y) inflation -- as measured by the consumer price index -- moderated to 9.3 per cent in Mid-October 2009 against 14.1 per cent in the same period last year.
The food and beverage group -- especially Vegetables, sugar and sugar related products -- have become more expensive than last year.
Sugar and sugar related products have become more expensive as it increased by a whopping rate of 42 per cent in compared to an increase of 39.5 per cent in the same period last year. Similarly, the price indices of vegetables and fruits increased by 37.5 per cent in sharp contrast to last year's decline of 10.1 per cent.
Similarly, the price indices of pulses as well as meat, fish and eggs sub-groups also increased by 25.1 per cent and 22.7 per cent respectively compared to an increase of 24.7 per cent and 22 per cent in the same period last year, said the NRB.
Though, the prices of food and beverages have not come down, the prices of non-food and services group came down by over six times. “The price index of food and beverages group increased by 15.6 er cent but the index of non-food and services group rose only by two per cent,” said the central bank said adding that the index of food and beverages and non-food and services group had risen by 15.2 per cent and 12.9 per cent respectively in the first three months of last fiscal year.
Within the group of non-food and services, the index of tobacco and related products rose up by 17 per cent against to a rise of 12.7 per cent during the same period last year. However, the price index of transport and communication declined by 8.7 per cent in comparison to an increase of 23.1 per cent during the same period last year.
Surprisingly, the prices in Kathmandu Valley, Tarai and Hills have moderated as the price index of Kathmandu Valley rose by 9.7 per cent and followed by 9.4 per cent in Tarai and 8.5 per cent in Hills against 14.5 per cent, 14 per cent and 13.9 per cent last year.
The y-o-y core inflation also moderated to 10.9 per cent from 13.1 percent a year ago, the central bank’s data revealed.
Similarly, the salary and wage rate index also rose by more than a double to 22.1 per cent in comparison to a rise of nine per cent a year ago. “The increase in basic salary and allowances of civil servants and its simultaneous effect on salary of the private sector contributed to such an increase in salary index,” concluded the NRB report.
Thursday, November 12, 2009
Government's failure inspending on development works leaves whopping Budget surplus
In the first two months of the current fiscal year 2009-10, government budget surplus stood at Rs 556.6 million in comparison to a surplus of Rs 3.4 billion in the same period last year, however the government spending has gone up by 69.8 per cent to Rs 26.6 billion in comparison to an increase of 40.4 per cent
“The increase was mainly on account of a rise in the growth of recurrent expenditure,” said the current macroeconomic situation based on the first two month's data of the current fiscal year published by the central bank.“Recurrent expenditure rose by a whopping rate of 108.1 per cent to Rs 17.6 billion, compared to a moderate rise of 11.9 per cent to Rs 8.4 billion in the same period last year,” the report said attributing the rise mainly to an upward revision in the salary and allowances of the civil servants and teachers.
Meanwhile, revenue mobilisation also grew by 54.5 per cent to Rs 22.6 billion compared to an increase of 17.5 per cent in the corresponding period of the previous year. Government's firm commitment to control the leakage in the revenue as well as tax administration reforms in conjunction with increasing import and consumption by virtue of high remittances inflow contributed to such an increase in the revenue mobilisation, said the report.
The government received foreign cash loans amounting to Rs 158.9 million and foreign cash grants amounting to Rs 2.72 billion, where as it had received foreign cash loans of Rs 625.1 million and foreign cash grants of Rs 2.12 billion in the same period of last fiscal year.However, exports fell by 15.2 per cent in contrast to a rise of 35.7 per cent in the same period last year. “Of the total exports, export to India declined by 13.2 per cent in contrast to a rise of 6.7 per cent. Exports to other countries plummeted by 17.4 per cent as against a rise of 94.7 percent in the same period of last fiscal year,” the Nepal Rastra Bank said.
The decline in the exports to India was attributed to the decline in the exports of readymade garments, zinc sheet, thread, copper wire rod and aluminum section, among others. Similarly, exports to other countries went down due to the decline in the export of woolen carpets, readymade garments, pulses, tanned skin and silverware and jewelleries.At the same time, total imports expanded by 20.3 per cent compared to a higher growth of 45.5 per cent in the corresponding period of the previous year. While imports from India rose by 17.3 per cent in the review period compared to a growth of 35.4 per cent, imports from other countries soared by 24.2 per cent in the review period compared to a significant growth of 60.7 per cent during the same period last year.
The Balance of Payment (BoP) deficit has also doubled to Rs 3.76 billion against the deficit of Rs 1.89 billion in the same period of the previous year. “The current account also posted a deficit of Rs 5.07 billion compared to a deficit of Rs 2.57 billion in the same periodlast year,” the report said.
Nepal received Rs 34.99 billion remittance
KATHMANDU: Nepal received Rs 34.99 billion in the first two months of the current fiscal year. “Under transfers, workers' remittances increased by 19.7 per cent in comparison to the growth of 59.4 per cent in the same period last fiscal year,” said the central bank report.
“The increase was mainly on account of a rise in the growth of recurrent expenditure,” said the current macroeconomic situation based on the first two month's data of the current fiscal year published by the central bank.“Recurrent expenditure rose by a whopping rate of 108.1 per cent to Rs 17.6 billion, compared to a moderate rise of 11.9 per cent to Rs 8.4 billion in the same period last year,” the report said attributing the rise mainly to an upward revision in the salary and allowances of the civil servants and teachers.
Meanwhile, revenue mobilisation also grew by 54.5 per cent to Rs 22.6 billion compared to an increase of 17.5 per cent in the corresponding period of the previous year. Government's firm commitment to control the leakage in the revenue as well as tax administration reforms in conjunction with increasing import and consumption by virtue of high remittances inflow contributed to such an increase in the revenue mobilisation, said the report.
The government received foreign cash loans amounting to Rs 158.9 million and foreign cash grants amounting to Rs 2.72 billion, where as it had received foreign cash loans of Rs 625.1 million and foreign cash grants of Rs 2.12 billion in the same period of last fiscal year.However, exports fell by 15.2 per cent in contrast to a rise of 35.7 per cent in the same period last year. “Of the total exports, export to India declined by 13.2 per cent in contrast to a rise of 6.7 per cent. Exports to other countries plummeted by 17.4 per cent as against a rise of 94.7 percent in the same period of last fiscal year,” the Nepal Rastra Bank said.
The decline in the exports to India was attributed to the decline in the exports of readymade garments, zinc sheet, thread, copper wire rod and aluminum section, among others. Similarly, exports to other countries went down due to the decline in the export of woolen carpets, readymade garments, pulses, tanned skin and silverware and jewelleries.At the same time, total imports expanded by 20.3 per cent compared to a higher growth of 45.5 per cent in the corresponding period of the previous year. While imports from India rose by 17.3 per cent in the review period compared to a growth of 35.4 per cent, imports from other countries soared by 24.2 per cent in the review period compared to a significant growth of 60.7 per cent during the same period last year.
The Balance of Payment (BoP) deficit has also doubled to Rs 3.76 billion against the deficit of Rs 1.89 billion in the same period of the previous year. “The current account also posted a deficit of Rs 5.07 billion compared to a deficit of Rs 2.57 billion in the same periodlast year,” the report said.
Nepal received Rs 34.99 billion remittance
KATHMANDU: Nepal received Rs 34.99 billion in the first two months of the current fiscal year. “Under transfers, workers' remittances increased by 19.7 per cent in comparison to the growth of 59.4 per cent in the same period last fiscal year,” said the central bank report.
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