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

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 stands as a high-income nation with the highest GDP per capita in Sub-Saharan Africa, yet remains highly susceptible to external disruptions. Tourism constitutes 31% of GDP and 41% of exports. With over 90% of production inputs imported, the country faces significant exposure to global commodity shocks and pandemics. In 2023, growth slowed to an estimated 3.3% from 8.9% in 2022. This deceleration was influenced by modest upticks in tourism, notably from European markets affected by tight monetary conditions and the conflict in Ukraine. Additionally, geopolitical tensions in Israel impacted tourist arrivals from Asia. The economy is forecasted to expand by 3.5% in 2024, bolstered by tourism and augmented flight seat capacity to the islands (data World Bank). The anticipated addition of 450 new hotel rooms throughout the year is expected to drive up tourism receipts. Nevertheless, sluggish trade and commerce within the Providence industrial zone, stemming from the gradual recovery following a 2023 explosion which caused severe damages, are likely to dampen growth.

Effective macroeconomic management has enabled Seychelles to navigate shocks and sustain growth. Pandemic mitigation measures facilitated a swift recovery and were gradually phased out. Since 2021, the government has pursued fiscal consolidation and implemented measures to enhance economic resilience while addressing external shocks. Investments in climate resilience, primarily financed through concessional funding and supported by private sector initiatives, have been prioritized. Fiscal strategies like the 2023 tourism environmental sustainability levy contribute to funding climate initiatives, with over 4% of the Seychelles' budget allocated to climate resilience efforts. In 2023, the primary fiscal balance stood at 1.4% of GDP, driven by increased revenue, particularly from robust business and property tax collections. Despite higher government spending due to increased public sector wages and the establishment of the Home Care Agency, public debt decreased to 60.1% of GDP, aided by external debt repayments. Capital expenditure allocation was higher than in 2022, yet under-execution of projects led to budget savings. However, following the December 2023 incidents, additional spending beyond planned investments is necessary, expected to elevate public debt to 62% of GDP (data World Bank). Nevertheless, the government remains committed to containing public debt in the medium term and strengthening the government securities market through bond issuance to mitigate refinancing risk. Inflation remained low, prompting the Central Bank of Seychelles to maintain the monetary policy rate at 2%. In 2023, appreciation of the rupee and moderation in global commodity prices contributed to declining domestic prices, with year-end inflation of -2.71%. In the context of low inflation expectations, the monetary authority is expected to maintain the monetary policy rate at 2% in 2024. 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. In the last decade, more intense structural reforms have been implemented, focusing on fiscal reform, the restructuring of state companies and financial system regulations.

Seychelles has the highest literacy rate and the best healthcare system in the East Africa region. As per the National Bureau of Statistics, in Q4/2023, the average number of employed persons across all sectors was 54,931, with average earnings amounting to SCR 16,710. This reflects a 0.5% rise in employment numbers and a 10.1% increase in average earnings compared to the corresponding quarter in 2022. Despite external shocks, average earnings have risen by 4.8%, while the poverty rate remained stable at 5.9% in 2023 (World Bank). 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 2.9% to the country's GDP and employs about 2% of the labor 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 mainly focus 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 13.5% 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 centered 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.

The services sector in Seychelles is the largest contributor to the country's economy, accounting for around 66.3% 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 recent years: according to the figures released by the NBS, 342,303 visitors arrived in Seychelles in 2023, compared to 324,386 for the same period one year earlier. 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 center, 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

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Foreign Trade in Figures

The Archipelago of Seychelles is very open to trade, with a trade-to-GDP ratio of 233% (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. The vast majority of exports are made of prepared or preserved fish, followed by petroleum oils and ships; while the country mostly imports mineral fuels (22.1%), fish and crustaceans (12.3%), nuclear reactors, boilers, machinery and mechanical appliances (6.4%), and electrical machinery (5.6% - data ITC 2022).

Seychelles’ largest clients are the United Arab Emirates (36.2% of total exports) France (28.3%), the United Kingdom (10.9%), Italy (6.1%), and Bahamas (3.6%); whereas its main suppliers are the United Arab Emirates (34.1% of total imports), France (10.1%), Spain (7.8%), South Africa (6.4%), and India (5.3% - ITC 2022).

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 537 million (an increase of 15.7% year-on-year) in 2022, against USD 1.3 billion of imports (+20.3 y-o-y%). Concerning services, the country is a net exporter thanks to its tourism activities: in 2022, exports totaled USD 1.6 billion against USD 995 million in imports. Data from the World Bank shows that in 2022 the archipelago’s trade deficit stood at 10.2% of its GDP (down from 12.8% recorded one year earlier). Preliminary data from the National Bureau of Statistics show that, in 2023, exports were valued at USD 541 million (stable y-o-y), whereas imports stood at USD 1.2 billion (+4.9% vis-à-vis one year earlier).

 
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

 
 

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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
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: May 2024