Le Nouvelliste | Speech by the Minister of Economy and Finance at the International Finance Summit

Every year, the International Finance Summit opens up a space for relevant reflection and debate, capable of generating innovative financing solutions for national development. It is up to me, in my capacity as Minister of Economy and Finance, to express on behalf of the Government my warmest congratulations and my sincere thanks to all the organizers of this great event for the colossal efforts they have always committed and the amount of sacrifices that have been brought in for the success of this activity.

Bringing together, around the same vision, political authorities, institutional actors, entrepreneurs and technical and financial partners of Haiti, this 12th edition should bring new hope in its results. A new hope, which must be accompanied by the design of new financing instruments, which are likely to provide appropriate responses to the multi-faceted shocks that continue to weaken the resilience of our population today and which in the long term will boost the growth momentum of our economy.

Ladies and gentlemen,

The government is well aware of the seriousness of the country’s economic and financial situation. It is here and now, through this new edition of the International Finance Summit, that the duty calls on all of us to join forces and intelligence to work for its improvement and thus open the horizons for our community of a better future.

Financing micro, small and medium-sized enterprises (SMEs) is certainly a promising theme, which we now need to look much more closely at in order to identify the real problems hindering the creation and growth of micro, small and medium-sized enterprises. -large Haitian companies to subject them to solutions that are both intelligent and sustainable. But it is also an objective that we should consider achieving, taking into account the challenges and opportunities that currently exist in both the national and international context.

The years 2020 and 2021 have been particularly difficult for the whole world following the COVID-19 health crisis, which has had a major impact on the global economy. The brutal shock caused by the pandemic and the cessation of most activities plunged the global economy into recession, with a decline of -3.2% [FMI : WEO de juillet 2021], the strongest contraction in the past forty years. The repercussions were mainly noted on production and trade in advanced as well as emerging and developing countries.

Already gripped by socio-political crises, Haiti has been hit hard by this pandemic, as evidenced by the deterioration in economic growth by -3.3 and -1.8 respectively in 2020 and 2021. The shock to the public finances has indeed accelerated the increase in the budget deficit in 2020 and 2021. This is explained by the combined effect of the tax rate contraction and the increase in spending as part of efforts to mitigate the effects of the pandemic. Similarly, the economic uncertainty resulting from the scale of the pandemic has led to a slowdown in private investment, including foreign direct investment.

In addition to the socio-political crisis affecting the private sector, the health crisis has contributed greatly to the deterioration of economic activities. Most Haitian companies are already young, but their productivity levels are also low, on the one hand due to factors specific to each company, such as weak management capacity, and on the other hand due to external factors related to political instability, lack of access to energy and especially financing.

In 2020, domestic credit granted by banks to the private sector represented only 9.7% of GDP, which is significantly lower than the average in Latin American and Caribbean countries of 59.78%. Indeed, Haitian companies, especially micro, small and medium-sized enterprises (MSMEs), discussed in these meetings taking place today, have credit constraints that are a real drag on the continuity or even expansion of their business.

SMEs struggle to access bank loans as the majority of them operate in the informal sector. Nevertheless, microfinance institutions (MFIs) and savings and credit cooperatives (CECs) provide support to this category of companies, with limited coverage due to the low level of loan portfolios.

Ladies and gentlemen,

The development of SMEs is at the top of the government’s priority list. This includes establishing a support ecosystem for micro, small and medium-sized enterprises. The measures initiated by the government aim to improve the business environment, access to finance and markets and build the capacities of SMEs. It is in this spirit that the government of Haiti, through the Ministry of Economy and Finance (MEF) and the support of the World Bank, is implementing the Private Sector Employment and Economic Transformation Project (PSJET).

The aim of this project is to support MSMEs in the face of recurrent socio-political crises, Covid-19 and the earthquake of August 14, 2021 over a six (6) year period, through programs aimed at increasing labor demand while supporting the resilience and growth of micro, small and medium-sized enterprises (SMEs) and value chains through improved business development services and access to finance.

As part of the launch of the PSJET, priority will be given to companies operating in the departments affected by the August 14, 2021 earthquake. For the government, it is about supporting these companies through support services and facilities. financing.

The PSJET is estimated to have an impact on 4,000 companies, and key outcomes include greater resilience of 51,000 jobs and the creation of approximately 10,000 jobs. It should be noted that the project will particularly support women-run businesses.

Ladies and gentlemen,

Now is the time for me to present to you other government initiatives related to private sector development, especially SMEs, which are considered to be the engine of growth and development in our country. In this regard, the Post-Covid-19 Economic Recovery Plan for the period 2020-2023 identifies 5 sectors for economic diversification and transformation, namely agriculture, digital, tourism, industrial and real estate. At this stage, we have undertaken several activities to support the development of these sectors:

Implementing the opportunity creation project with the International Finance Corporation, since February 2021, which aims to improve succession services for existing investors and the awareness of new investors in the garment and textile sector;

Implementing the Digital Acceleration Project, which aims to increase access to high-speed internet services and lay the foundation for digital resilience to respond to shocks such as covid19 and earthquakes.

The creation in 2020 of a guarantee fund for companies exporting agricultural products;

The establishment of Haiti’s off-grid electricity fund at the Industrial Development Fund (IDF), which aims to ensure reliable and high-quality electricity services from renewable energy sources by financing access providers to commercially viable energy suppliers capable of producing these services in rural and suburban areas of the country;

The creation of a guarantee fund worth 500 million gourds for the housing sector in the southern peninsula, which was significantly affected by the earthquake of August 14, 2021;

Develop a national digital economy strategy that sets priorities and objectives to enable the country to reap the full benefits of the digital revolution to accelerate growth and create jobs.

Ladies and gentlemen,

As part of the government’s efforts to improve the macroeconomic framework, we have been in talks with the International Monetary Fund since March 2022 with a view to signing a Reference Program (SMP). Through this program, we are committed to implementing policies that restore macroeconomic stability and growth, strengthen governance and contribute to poverty reduction.

It should be noted that the 2021-2022 budget, which is currently being prepared, will take into account all governance, fiscal and social measures that will result from the SMP. For example, the government has taken all measures to adopt the 2021-2022 budget at the beginning of May 2022 by the Council of Ministers.

At the same time, the government is working on the implementation of social measures that will be in effect in the coming days until September 2022 (i.e. during the next 5 months of the 2021-2022 fiscal year).

As far as governance is concerned, it is worth noting the efforts made to improve transparency and accountability through the implementation of the Decree of 5 November 2021 establishing the obligation to provide information enabling beneficial ownership of public contracts and identify concessions. On the other hand, the government intends to continue reviewing the regulatory frameworks of the main audit institutions, namely the Anti-Corruption Unit, the National Procurement Commission and the Supreme Court of Accounts and Administrative Disputes.

I am delighted about the collaboration between the MEF and the Group Croissance in organizing this event. In this regard, I commit myself to strengthening this partnership to ensure better dissemination of economic information for the benefit of the Haitian people. I also commend Group Croissance’s commitment to strengthening public-private dialogue on our country’s development challenges and priorities.

Ladies and gentlemen,

Finally, I sincerely hope that the holding of this 12th edition of the International Finance Summit will help to identify the many opportunities that exist for small and medium-sized enterprises in Haiti, as well as formulas for concrete actions to meet the challenges their development stand in the way of. turning them into real wealth creation tools to fight poverty and thus offer a vast majority of our fellow citizens the hope of a better future.

Thank you for your attention !

Michel Patrick Boisvert

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