The World Bank in Seychelles

The Republic of Seychelles is an archipelago of 115 islands northeast of Madagascar. The country has a total population of 121,355 people, three-quarters of whom live on the main island of Mahé. Seychelles has Africa's highest gross domestic product (GDP) per capita, at $16.7 billion (2023). Its economy is highly dependent on tourism and fisheries, and climate change poses long-term sustainability risks.

Independent since 1976, Seychelles is a relatively young democracy. The first multiparty presidential election was held in 1993 after adopting a new constitution.

Seychelles held general elections on 25–27 September 2025, covering both the presidency and the National Assembly. In the presidential race, opposition leader Patrick Herminie (United Seychelles) led with 48.8% of the vote, ahead of incumbent Wavel Ramkalawan (Linyon Demokratik Seselwa – LDS) with 46.4%, prompting a runoff scheduled for 9–11 October as no candidate surpassed 50%. United Seychelles also secured a majority in the National Assembly, gaining both constituency and proportional seats.

ECONOMY

Seychelles has the highest GNI per capita in Africa. Its economy relies on tourism, fisheries, and supporting activities. Since 2008, macroeconomic and structural reforms have supported development. The economy grew 2.9% in 2024, with services contributing 2.3 points, driven by telecom, financial, admin support services, and construction. Subdued European growth and fewer flights led to 0.5% tourism arrivals growth (1.5 points below target) and a 3.6% drop in local currency tourism earnings. The external position is sound, backed by Foreign Direct Investments (FDI) and reserves.

Tourism earnings moderation and stable imports widened the current account deficit by 0.5 points to 7.9% of GDP in 2024. FDI remained key despite a 0.7 point GDP decline, due to completed hotel projects and delayed Assomption Island development starting June 2025. Gross Foreign Reserves were $873M in June 2025, up 16.7% YoY, covering 4.1 months of imports. The Central Bank kept the Monetary Policy Rate at 1.75% since March 2024. Inflation rose to 1.7% YoY in December 2024 after 2023 deflation, driven by utility prices and currency depreciation. Inflation eased to 0.5% YoY in June 2025 after January 2025 electricity tariff cuts (7% households, 3% firms).

Core inflation rose to 0.5%, up 1.5 points YoY. Fiscal consolidation continued for a fourth year. The government posted a 3.2% primary surplus in 2024 (up from 1.7% in 2023), due to higher revenues and under-execution of capital spending, wages, and goods/services. Public debt rose slightly to ~60% of GDP in 2024, partly due to higher external real interest rates and rupee depreciation.

Last Updated: Oct 06, 2025

Despite its high-income status, Seychelles faces development challenges centered on enhancing productivity and boosting overall economic performance to foster greater shared prosperity. The island state faces growing vulnerabilities due to limited economic diversification, insularity, small size, remoteness, susceptibility to climate shocks, and exposure to external shocks, including fluctuations in international travel and the prices of essential imports like food and fuel. Although it has the highest GDP per capita in the region, addressing labor and skills shortages and boosting social protection are key to improving human capital development.  While unemployment remains low at 3.2% and extreme poverty has nearly been eliminated, socioeconomic vulnerabilities persist. Substance abuse, teenage pregnancy, declining education outcomes, and high unemployment among youth and single female parents threaten human capital development, long-term economic sustainability, and household welfare.

Frequent disasters triggered by monsoon rains, floods, and landslides, compounded by events like the December 2023 explosion in an industrial area on Mahé island, underscore the need for climate adaptation and funding as well as enhancements in disaster risk management. In the near term, priorities include maintaining debt sustainability and reforming the social protection system to support the most vulnerable. In the medium term, the focus is to increase revenues, boost capital expenditures for climate change adaptation, and create fiscal space through prudent expenditure management and stronger revenue mobilization. Additionally, structural reforms in revenue administration, public financial management, and governance—alongside digitalization and state-owned enterprise reforms—are essential to Seychelles’ sustainable development.

Last Updated: Oct 06, 2025

The World Bank Group (WBG) strategy in Seychelles, outlined in the Country Partnership Framework (CPF) FY25-FY30, supports the country's transition to a more inclusive, resilient, and sustainable development path. The CPF addresses key challenges in productivity, participation, and public sector performance. It focuses on improving quality of life by creating employment opportunities—especially for youth and women—enhancing the business environment for SMEs and entrepreneurs, and strengthening human capital through education and skills development. The strategy also promotes the digital economy, climate resilience, renewable energy, and sustainable waste management, while supporting public service digitalization. The WBG aims to bolster social and environmental resilience through policies addressing climate change and solid waste.

A cross-cutting theme is macro-fiscal resilience, supporting Seychelles' commitment to macroeconomic prudence and efficient public resource use to promote economic, social, and environmental resilience. Key strategies include advancing skills development, digital economy, and renewable energy.

The World Bank portfolio in Seychelles stands at $80 million (national projects and budget support) as of August 2025.

In partnership with the government, the World Bank launched a Solid Waste Management Project to improve sector performance, promote circularity, and strengthen Seychelles’ social protection system. Under the CPF, it approved the Sustainable and Inclusive Growth Development Policy Operation (2024), Renewable Energy Acceleration Project (2025), and Regional Emergency Preparedness and Access to Inclusive Recovery Program (REPAIR) (2025). The WBG is also conducting a Country Climate and Development Report and a growth and jobs study to guide policy dialogue and future interventions on climate resilience, job creation, and economic transformation.

Last Updated: Oct 06, 2025

The World Bank’s Development Policy Operation in Seychelles delivered key reforms enhancing financial stability, fiscal transparency, and environmental/social resilience. Through the Fiscal Sustainability and Climate Resilience DPF series ($75 million), the government enacted the Financial Stability Act, adopted risk-based supervision, advanced renewable energy via Electricity Act regulations, and improved tax transparency with rules on related-party dealings and transfer pricing. Environmental resilience was boosted through the Tourism Environmental Sustainability Levy, updated Land Use Plans, and coastal/fisheries protection. Data protection and financial infrastructure were strengthened via the Data Protection Bill, National Payment System Amendment Act, and Credit Reporting Act. ICT competition improved with the Seychelles Communications Regulatory Authority. Fiscal management progressed with zero-based costing, reducing non-wage deviations. Social protection reforms expanded coverage, nearly doubling real spending and increasing female beneficiaries. The Sustainable and Inclusive Growth DPF ($30 million, two-part series) supports resilience, financial stability, and inclusive growth through sequenced reforms. It promotes climate action, social inclusion, and youth interventions. The first $15 million disbursement occurred in January 2025.

Social Protection: The Bank supported raising the public sector retirement age and adopting a plan to adjust pension benefits. The WHO Disability Assessment System was adopted for better targeting and services.

Solid Waste Management: Seychelles faces structural waste challenges. The Solid Waste Management Project supports landfill expansion at Providence, feasibility studies for future technologies, and circularity roadmap implementation. The Bank also supported policies on Extended Producer Responsibility, Solid Waste (2025–2030), Hazardous Chemicals/Waste (2024–2029), and the Hazardous Chemicals Bill (2025).

Last Updated: Oct 06, 2025