Economic and Political Overview

flag Seychelles Seychelles: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Republic of Seychelles is an archipelago of 115 islands, with three-quarters of the population living on the main island of Mahé. The country’s recent economic performance has been strong, benefiting from the continued growth of the tourism (accounting for nearly three-quarters of GDP) and fisheries sectors. After plummeting due to the COVID-19 pandemic and the travel restrictions that followed (-7.7% in 2020), the country’s GDP returned on a growth path in 2021 (+7.9%) and in 2022 (+10.6%), driven by robust tourism activity. Over the forecast horizon, the IMF projects growth to moderate to 5.4% this year and 4.9% in 2024, although downside risks persist as a worsening of economic prospects in Seychelles’ key tourism markets (Russia, the European Union, and the United Kingdom) would negatively affect the country’s economy.

Amid the recovery, there has been a significant reduction in public spending and an increase in aid for those in need. The primary fiscal deficit decreased to an estimated 1.1% of GDP in 2022, representing a considerable consolidation of 13.6 percentage points in the previous two years. The risk of unsustainable debt has been notably diminished, as the public debt-to-GDP ratio declined to around 69.9% by the end of 2022, a reduction of around 23 percentage points over two years. Over the medium term, the primary balance is anticipated to shift to a surplus as revenue measures will exceed the planned capital expenditure increase, while the debt-to-GDP ratio is projected to continue declining to 64.6% in 2023 and below 50% by 2026, according to the IMF. Moreover, the government has established a program of targeted, temporary cash transfers to alleviate the burden of rising food and fuel prices for the most vulnerable population, which is scheduled to last until early 2023. Average inflation declined to around 3% in 2022, but it is expected to rise to 4.5% in 2023, reflecting higher import prices and a fading of the cushion provided by the lagged effect of the rupee appreciation. In March 2023, IMF staff and the Seychellois authorities reached a staff-level agreement on a successor 36-month Extended Fund Facility (EFF) and a new Resilience and Sustainability Facility (RSF) program to support Seychelles’ economic policies and reforms. According to the agreement - which is subject to approval by the IMF Executive Board - Seychelles will have access to SDR 42.36 million (about USD 56.96 million) under the EFF and SDR 34.35 million (about USD 46.19 million) under the RSF.
Since introducing the Seychelles International Business Companies Act in 1994, over 200,000 companies have been registered and new offshore companies continue to register each month. Seychelles is at the forefront of the "blue economy" movement focused on using oceans for economic growth, and improved livelihoods and jobs while maintaining the ocean's ecosystem. Since 2012, more intense structural reforms have been implemented, focusing on fiscal reform, the restructuring of state companies and financial system regulations.

Seychelles has the highest per capita GDP in Africa (estimated at USD 39,662 in 2023 by the IMF), is classified as an upper-middle income country and currently has the highest literacy rate and the best healthcare system in the East Africa region. As per the National Bureau of Statistics, in Q4/2022 the average number of employed persons for all sectors was 54,298 and average earnings were SCR 15,169. This represented an increase of (8.4%) in employment numbers and (1%) in average earnings compared to the same quarter one year earlier. Nevertheless, a 2020 study by the National Bureau of Statistics found that 12% of the population is multi-dimensionally poor and experiencing deprivation related to the standard of living, education, health and employment. Given the limitations on land, labour and the fragile environment, economic growth will have to rely on increases in productivity in the medium term.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 1.982.092.122.272.43
GDP (Constant Prices, Annual % Change) 8.94.23.93.93.9
GDP per Capita (USD) 19,98320,89021,09522,37623,734
General Government Gross Debt (in % of GDP) 61.560.859.055.752.0
Inflation Rate (%) n/a-0.82.03.53.5
Unemployment Rate (% of the Labour Force) 3.03.03.03.03.0
Current Account (billions USD) -0.14-0.14-0.18-0.19-0.21
Current Account (in % of GDP) -7.1-6.9-8.5-8.3-8.8

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Due to its location and small size, Seychelles has limited land resources for agriculture, with only about 3% of its total land area suitable for cultivation. The agricultural sector in Seychelles contributes around 2.1% to the country's GDP and employs about 2% of the labour force (World Bank, latest data available). The sector mainly focuses on the production of crops such as coconuts, vanilla, cinnamon, fruits, and vegetables, as well as livestock farming, including poultry and pig farming. Coconut farming is the most important agricultural activity in Seychelles and accounts for over 90% of the country's agricultural production. Coconut trees are grown for their meat, oil, and other by-products such as coconut milk and desiccated coconut. Vanilla is another important crop, accounting for about 5% of the country's agricultural production. Fruit and vegetable production is mainly focused on meeting domestic demand, whereas livestock farming mainly consists of small-scale poultry and pig farming.

The industrial sector in Seychelles is relatively small and contributes around 13% to the country's GDP. The sector is primarily focused on the processing of local raw materials and the production of goods for domestic consumption. The manufacturing sector in Seychelles is mainly centred around food processing, which includes fish canning, meat processing, and the production of baked goods, confectionery, and beverages. The sector also includes the production of textiles, garments, and footwear, as well as the manufacturing of construction materials such as cement, bricks, and tiles. Overall, the manufacturing sector is estimated to account for 5% of GDP. According to the latest figures by the National Bureau of Statistics, industrial production in the fourth quarter of 2022 decreased by 21.6% compared to the third quarter.

The services sector in Seychelles is the largest contributor to the country's economy, accounting for around 67.2% of its GDP. The sector is diverse and includes a range of activities such as tourism, financial services, trade, transport, and communications. Tourism is one of the most important sectors within the services industry and contributes significantly to its foreign exchange earnings, providing employment opportunities for a large segment of the population. After suffering due to the COVID-19 pandemic, the sector recovered in 2022, when the country welcomed 334,552 tourists, up by 81% compared to the previous year. The financial services sector in Seychelles is also an important contributor to the country's economy as Seychelles has established itself as an offshore financial centre, offering a range of services such as banking, insurance, and investment management. Trade and transport are other important sub-sectors within the services industry in Seychelles. The country's strategic location in the Indian Ocean has made it an important transit point for goods moving between Africa, Asia, and the Middle East.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Value Added (in % of GDP) 2.9 13.5 66.3
Value Added (Annual % Change) 3.8 3.5 10.2

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Seychelles Rupee (SCR) - Average Annual Exchange Rate For 1 MUR 0.370.400.410.390.45

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
66,3/100
World Rank:
60
Regional Rank:
4

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

The Archipelago of Seychelles is very open to trade, with a trade-to-GDP ratio of 153% (World Bank, latest data available). The country is a member of COMESA (the Common Market of East and South Africa) and of the WTO since 2015. Customs duties remain comparatively high in Seychelles, especially in the fishing sector. In addition, while the country does not have major trade barriers, the lack of infrastructure also remains an important obstacle to trade. The government has acted to encourage foreign trade, including tax incentives for the tourism industry and the reduction of customs procedures at ports. To consult the list of trade agreements, refer to the website of the Seychelles Trade Portal. Almost 85% of exports are made of prepared or preserved fish, followed by ships (2.5%) and petroleum oils (2.1%); while the country mostly imports machinery (8.8%), electrical machinery (8.7%), fish (6.7%), ships (5.7%), and mineral fuels (5.4% - data ITC 2021).

Seychelles’ largest clients are France (21.7% of total exports), Japan (11.4%), the United Kingdom (10.2%), Mauritius (9.4%), Italy (6.4%), and Spain (5.8%); whereas its main suppliers are the United Arab Emirates (14.6% of total imports), Spain (10.8%), China (9.2%), South Africa (7.9%), and France (7.1% - ITC 2021).
 
The country has a structural trade deficit, and the trend is expected to continue in future years. According to WTO, exports of goods stood at USD 464 million (an increase of 7.4% year-on-year) in 2021, against USD 1.1 billion of imports (+12.8 y-o-y%). Concerning services, the country is a net exporter thanks to its tourism activities: in 2021, exports totalled USD 892 billion against USD 476 million in imports. Data from the World Bank shows that in 2021 the archipelago’s trade deficit stood at 8.1% of its GDP (up from 5.2% recorded one year earlier). Preliminary data from the National Bureau of Statistics show that in 2022, domestic exports were valued at SCR 5,4 billion (6.5% higher than in 2020), whereas imports stood at SCR 4,568.1 million (-15.6% vis-à-vis one year earlier, of which 87.7% comprised canned tuna), whereas imports stood at SCR 19,456 billion (+2.6%).

 
Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 1,2711,1671,0041,1331,364
Exports of Goods (million USD) 569518432464537
Imports of Services (million USD) 874911500798995
Exports of Services (million USD) 1,5731,6017671,2351,681
Imports of Goods and Services (Annual % Change) 3.20.8-15.57.73.1
Exports of Goods and Services (Annual % Change) 2.13.1-25.79.99.1
Imports of Goods and Services (in % of GDP) 110.9103.4101.6124.3121.6
Exports of Goods and Services (in % of GDP) 97.893.577.7111.5111.5
Trade Balance (million USD) -615-631-359-507-731
Trade Balance (Including Service) (million USD) 8460-92-70-51
Foreign Trade (in % of GDP) 208.7197.0179.3235.8233.1

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2021
Gibraltar 33.0%
Cayman Islands 15.4%
Bermuda 12.0%
Belize 9.1%
France 7.0%
See More Countries 23.5%
Main Suppliers
(% of Imports)
2021
South Africa 18.7%
Netherlands 16.4%
United Arab Emirates 15.8%
Italy 14.7%
France 7.6%
See More Countries 26.8%

Source: Comtrade, Latest Available Data

 
 

Main Products

2.0 bn USD of products exported in 2021
Yachts and other vessels for pleasure or sports;...Yachts and other vessels for pleasure or sports; rowing boats and canoes 72.4%
Prepared or preserved fish; caviar and caviar...Prepared or preserved fish; caviar and caviar substitutes prepared from fish eggs 13.9%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 5.6%
Frozen fish (excl. fish fillets and other fish...Frozen fish (excl. fish fillets and other fish meat of heading 0304) 5.1%
Flours, meals and pellets, of meat or meat offal,...Flours, meals and pellets, of meat or meat offal, of fish or of crustaceans, molluscs or other aquatic invertebrates, unfit for human consumption; greaves 0.6%
See More Products 2.5%
1.9 bn USD of products imported in 2021
Yachts and other vessels for pleasure or sports;...Yachts and other vessels for pleasure or sports; rowing boats and canoes 31.7%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 10.3%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 8.1%
Frozen fish (excl. fish fillets and other fish...Frozen fish (excl. fish fillets and other fish meat of heading 0304) 6.7%
Oilcake and other solid residues, whether or not...Oilcake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of vegetable fats or oils (excl. from soya-bean oil and groundnut oil) 5.0%
See More Products 38.3%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 
 

Main Services

2.3 bn USD of services exported in 2022
49.01%
41.62%
8.15%
0.72%
0.45%
0.06%
n/a%
1.0 bn USD of services imported in 2022
63.94%
23.90%
5.36%
4.35%
0.98%
0.95%
0.30%
0.22%
n/a%
n/a%

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Ministry of Finance, National Planning and Trade
Ministry of Foreign Affairs and Tourism
Statistical Office
National Bureau of Statistics
Central Bank
Central Bank of Seychelles
Stock Exchange
MERJ Exchange
Search Engines
Economic Portals

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Political Outline

Current Political Leaders
President: Wavel RAMKALAWAN (since 26 October 2020)
Vice President: Ahmed AFIF (since 27 October 2020)
Next Election Dates
Presidential: 2025
National Assembly: October 2025
Main Political Parties
Seychelles has a multi-party political system, but the political landscape is dominated by two main political parties:

- Seychellois Democratic Alliance (LDS): centre, liberal political coalition. It is currently the leading coalition, holding 25 out of 35 seats
- United Seychelles (US): left-wing, democratic socialism. It currently has 10 seats in the National Assembly.

Other smaller parties in Seychelles include One Seychelles, Seychellois Alliance, Seychelles Patriotic Movement, Popular Democratic Movement, and New Democratic Party.

Type of State
Democratic presidential republic.
Executive Power
The President is elected by universal suffrage for a term of five years and is eligible for re-election for one more term. The President is the Commander-in-Chief of the Armed Forces and has the power to appoint judges and other senior government officials. He is also the head of government.
The Cabinet of Ministers is appointed by the President and is responsible for advising the President on policy and the day-to-day administration of the government. The Cabinet is collectively responsible to the National Assembly and can be removed by a vote of no-confidence.
Legislative Power
In Seychelles, legislative power is vested in the National Assembly, which is the unicameral. The National Assembly consists of 35 members, 25 of whom are directly elected from constituencies across Seychelles, and nine are appointed by the President. Members of the National Assembly serve a five-year term. The National Assembly is responsible for making laws, overseeing government activities, and approving the national budget.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
52/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
2/7
Civil Liberties:
45 out of 60 (free)

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
As of 2023, no particular measures related to the COVID-19 pandemic affect Seychelles' international trade.
For a general overview of trade restrictions due to the pandemic, please consult the section dedicated to Seychelles on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Seychelles please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: November 2023