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Overview

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 $13,306 (2021). It is highly dependent on tourism and fisheries, with climate change posing risks to the sustainability of its economy long-term.

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 majority of seats in the national parliament. The Wavel administration seems determined to tackle corruption and improve living standards. A new bill, aimed at strengthening the Anti-Corruption Commission and introducing anti-money laundering legislation, was introduced in May 2022. Rising inequality and unemployment among youth, though unlikely to cause social unrest, are however of concern. The next general election is due in 2025.

Economic Developments and Outlook

Seychelles is the most prosperous nation in Sub-Saharan Africa. Its economy is highly dependent on tourism, making it vulnerable to global developments. Investor interests in the blue economy sector is growing. Fisheries remain the largest sector after tourism.

In the medium term, tourism will continue to be the key growth driver, complemented by growth in private consumption. Average annual inflation has moderated, in line with an appreciation of the Seychelles rupee (as tourism has recovered). However, the fallout from the war in Ukraine will continue to put upward pressure on food and fuel prices and inflation into 2023. The fiscal deficit is expected to decline by 2.2 percentage points to reach 3.8% by end-2022.

Growth is expected to peak at 10.9% in 2022 and average 5% in the medium-term as tourism recovers, the pandemic recedes, and global economic growth and trade resumes. The war in Ukraine reduced tourist arrivals from Russia and Ukraine but an increase in arrivals from Western Europe has muted the impact. The economy has continued to recover in 2022, driven by a rebound in tourism and the services sector. In the first half of 2022, tourist arrivals were at about 70% of the 2019 level (in contrast to the 60% decline in 2020). Higher tourism activity has helped with an appreciation of the Seychelles rupee, and the stabilization of inflation, partly offsetting the upward pressure on prices from the war. The Government has scaled-up social protection to mitigate the impact of higher-than-expected inflation on poor households.​

Development Challenges

While the immediate priority for the Seychelles is containing COVID-19 and recovering from its economic and social impact on the country, a strong, resilient recovery also warrants a focus on longer term, structural issues.

Among Seychelles’ development challenges is the need for greater productivity and more participation and performance of the economy as means to increasing shared prosperity. Some of the main institutional challenges in this regard are, notably, barriers to opening a business and running it; 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: Oct 06, 2022

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Seychelles: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments
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Additional Resources

Country Office Contacts

Main Office Contact
1 Rue Andriamifidy
BP 4140
Antananarivo 101, Madagascar
+261-20-22-560-00
For general information and inquiries
Rafael Saute
Sr. External Affairs Officer
Maputo, Mozambique
+258-21-482-944
For project-related issues and complaints