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  • The Republic of Seychelles lies northeast of Madagascar, an archipelago of 115 islands with almost 95,000 citizens (2016), three-quarters of whom live on the main island of Mahé. Seychelles has the highest gross domestic product (GDP) per capita in Africa ($15,410 in 2016), but inequality is significant, placing the prospect of continued shared prosperity in tighter focus. Climate change also 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. A presidential election in December 2015 was closely-fought, and President James Michel narrowly elected for a third and last term by just 193 votes out of the 62,831 valid votes cast. Michel resigned in October 2016, and was replaced by his deputy, Danny Faure. President Faure did not stand for the leadership of the governing Parti Lepep in June 2017, saying he wished to separate partisan politics from his role as head of state. In his place, Vincent Meriton, Vice-President of the Republic, was elected the party’s president. The next presidential election is due in 2020. 

    In September 2016’s legislative elections the opposition coalition won the parliamentary elections for the first time. The Linyon Demokratik Seselwa (LDS) is a coalition of four parties, including the Seychelles National Party (SNP), which boycotted parliamentary polls in 2011. The LDS holds 19 seats in the Sixth National Assembly, while Parti Lepep retains 14 seats.

    This is the first time since 1993 that Parti Lepep has not had a parliamentary majority. Before the elections, it held all 25 directly elected seats in the assembly and an additional 7 proportional seats, leaving just one seat for the opposition. In a surprise move, the Speaker of the National Assembly, Patrick Pillay, resigned in January 2018. His former deputy, Nicholas Prea, has been elected the new speaker.

    Economic developments and outlook

    Seychelles’ recent economic performance has been strong, benefiting from the continued growth of the tourism sector. Gross domestic product (GDP) growth in 2018 was 3.6%. Visitor numbers in 2018 were 361,844 (more than 3.5 times the resident population), a 3% increase over 2017. European markets remain key to the Seychelles tourism industry, but the sector is also benefiting from increases in tourists from other regions, facilitated in part by more airline connections. The formal unemployment rate was 3.5% in the third quarter of 2018, indicating a tight labor market consistent with robust recent economic conditions. Unemployment rates were higher for men (4.2%) than for women (2.9%). Youth unemployment was 14.5%.

    The country’s external position has been stable in recent years, but structural vulnerabilities remain due to Seychelles’ heavy reliance on imported goods and on foreign funding for investment. Seychelles runs large, structural current account deficits, financed substantially by foreign direct investment (FDI). The external debt stock is estimated at 98.2% of GDP for public and private sectors combined at the end of 2017. The latest external debt sustainability framework shows the external debt burden declining under baseline assumptions (to 88.3% of GDP in 2022).

    The baseline growth outlook remains favorable in view of the ongoing robustness of tourism, although the current pace of real GDP growth is expected to moderate to 3.4% in 2019 as construction activities linked to new tourism capacity development slows (a moratorium on new large hotel permits was extended recently to 2020) and regional tuna fishing quotas were reduced in 2017. Given the limitations on land, labor and the fragile environment, economic growth will have to increasingly rely on increases in productivity in the medium term.

    Development challenges

    Among Seychelles development challenges is the importance to focus on greater productivity, participation and performance of its economy as means to increasing shared prosperity. Some of the main institutional challenges in this regard are notably barriers to open and operate businesses, inefficiencies in public sector management, such as limited statistical capacity, scope for a more strategic and sustainable approach to social protection, as well as the need to broaden access to quality education and skills development. Regarding growth, achieving more productivity-based growth is Seychelles’ key challenge. Economic growth performance has been strong, but it has been driven by factor accumulation, hence the need to raise productivity growth as Seychelles’ key growth challenge. Seychelles has recently joined the ranks of high-income economies, a stage where both economic theory and the international empirical evidence show that sustained economic growth is fueled by rising productivity. Regarding inclusion, increasing Seychellois’ direct participation in an increasingly skills-intensive, sophisticated economy is the paramount challenge for the social sectors. Absolute poverty levels in Seychelles are low, but inequality remains significant. Seychelles’ economy is mainly vulnerable to external shocks. A weakening of tourism entries—for instance because of increased competition from newer markets in the Middle East and Asia, or a series of price hikes in international food and oil prices—could negatively affect the country’s economic outlook. 

    Last Updated: Mar 22, 2019

  • World Bank Group Engagement in Seychelles

    The new Country Partnership Framework for the period FY18-FY23 was prepared in close consultation with the government, private sector and other development stakeholders, and is informed by discussions around the government’s National Development Strategy (2018-22) and the World Bank Group’s own diagnostic of the Seychelles (Systematic Country Diagnostic), as well as lessons from the previous WBG strategy.

    The overarching objective of this CPF is to consolidate the country’s path to inclusive and sustainable prosperity. To that end, the strategy delineates two mutually reinforcing focus areas, namely shared prosperity, and inclusion and public-sector performance. This entails retooling the core economy of fisheries and tourism for sustainability and inclusion, along the lines of the government’s Blue Economy flagship program, and to strengthen management and resilience of natural endowments.

    The CPF supports a shift in focus towards building the human capital of the bottom 40% of the population to enable them to participate in new expanding opportunities. Finally, it seeks to consolidate resilience in public finances by increasing their efficiency, improving the regulatory capacity of the state to foster space for the private sector, and setting the foundations for transparency and accountability.

    Knowledge Services, Lending and Innovative Financing

    Several of the strategy’s outcomes will be achieved through knowledge services, most of which under reimbursable advisory services (RAS). While the indicative lending from the International Bank for Reconstruction and Development (IBRD) is estimated at $25 million during the first half of the CPF period, the strategy will make greater use of innovative financing mechanisms which would seek to supplement IBRD funding by crowding in private financing through the issuance of Bonds, as well as public-private partnerships. Additional IBRD lending will depend on the country demand and overall performance during the CPF period as well as global economic developments that affect IBRD’s financial capacity. In addition, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) from the WBG will continue to seek business opportunities in the country in line with their respective comparative advantages.

    Last Updated: Mar 22, 2019

  • The World Bank has delivered, in close collaboration with the International Monetary Fund (IMF), two stand-alone Development Policy Loans (DPL) amounting to $18 million, and three operations totaling $7 million under a Development Policy Operation series approved by the World Bank Board in September 2013, 2014, and 2015. In addition, a DPL of $7 million with a Catastrophe Deferred Drawdown Option was approved in September 2014 to help strengthen the country’s ability to manage disaster risks.

    These policy operations focus on catalyzing private sector growth, improving governance and public resource management, and building resilience. These reforms have been instrumental in improving the country’s business climate, enhancing fiscal transparency, improving public financial management, and increasing the fiscal oversight and control of public enterprises.

    More recently, under the South West Indian Ocean Fisheries Governance and Shared Growth Program (SWIOFish3), the Bank is supporting the management and conservation of marine areas and strengthening seafood value chains in the Seychelles. The project is co-financed by a Seychelles Blue Bond ($15 million), which is supported by a $5 million guarantee from IBRD and a further $5 million concessional loan from the Global Environment Facility (GEF). This first ever sovereign Blue Bond was issued by the government of Seychelles in October 2018. The Blue Bond is an innovative financing mechanism to mobilize private sector investment to support the ocean economy. The proceeds will be used to capitalize a Blue Grants Fund and a Blue Investment Fund managed by the Seychelles Conservation and Climate Adaptation Trust (SeyCCAT) and the Development Bank of Seychelles (DBS).

    Proceeds from the bond will include support for the expansion of marine protected areas, improved governance of priority fisheries and the development of the Seychelles’ blue economy through activities such as promotion of best practices, implementation of fisheries management plans, stock rebuilding, improvement of value-chains and aquaculture development. 

    Last Updated: Mar 22, 2019

  • The World Bank works in collaboration with other development partners of Seychelles, including with the International Monetary Fund (IMF). 

    Last Updated: Mar 22, 2019



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
For general information and inquiries
Rafael Saute
Sr. External Affairs Officer
Maputo, Mozambique
For project-related issues and complaints