The Republic of Seychelles lies northeast of Madagascar, an archipelago of 115 islands with almost 98,000 citizens, three-quarters of whom live on the main island of Mahé. Seychelles has the highest gross domestic product (GDP) per capita in Africa, at $12.3 billion (2020). It is highly dependent on tourism and fisheries, and climate change poses long-term sustainability risks.
Political Context
Independent since 1976, the Seychelles is a relatively young democracy. The first multiparty presidential election was held in 1993 after the adoption of a new constitution. The latest presidential and parliamentary elections took place in October 2020, bringing an opposition candidate, Wavel Ramkalawan, to the Presidency for the first time since the introduction of democratic elections. Ramkalawan’s Linyon Demokratic Sesel party also won the most seats in the national parliament. With well-established democratic institutions, Seychelles' political environment is expected to remain stable. Mr. Ramkalawan’s administration seems determined to tackle corruption and improve living standards. Nine members of the previous government are currently being sued for allegedly misappropriating funds. A new bill aimed at strengthening the Anti-Corruption Commission and anti-money laundering legislation was introduced in May 2022. However, rising inequality and unemployment among youth are of concern but unlikely to cause social unrest. The next general election will take place in 2025.
Economic Developments and Outlook
With a GDP per capita of $10,764, Seychelles is the most prosperous nation in Sub-Saharan Africa. The economy remains highly dependent on tourism, making it highly vulnerable to global macroeconomic developments. Investor interests in the blue economy sector are growing. Fisheries remain the largest sector after tourism.
Based on a recently rebased GDP, growth reached 5.8% in 2022, before moderating to 3.6% in 2023. Average inflation fell to 2.6% in 2022 and rose to 4.2% in 2023. This reflects higher import prices. The increase in commodity prices (fuel and wheat) is also expected to affect the value of imports and keep both inflation and the current account elevated. If unmitigated, the poor are expected to bear a disproportionate impact from rising food prices.
Development Challenges
While the immediate priority is containing COVID-19 and recovery from its economic and social impact on the country, a focus on longer-term structural issues is also warranted for a strong and resilient recovery.
Among Seychelles’ development challenges is a focus on greater productivity, higher labor force participation, and improved performance of the economy as means to increase shared prosperity. Some of the related institutional challenges are notable barriers to opening and operating businesses; inefficiencies in public sector management, such as limited statistical capacity; scope for a more strategic and sustainable approach to social protection; and the need to broaden access to quality education and skills development. Climate change adaptation, including through strengthened disaster preparedness systems and enhanced coastal management, is also key.
Last Updated: Mar 31, 2023
