Economic Transformation Strategy
1.2
NATIONAL DEVELOPMENT OF SEYCHELLES:
CHAPTER 1 / INTRODUCTION
CHARACTERISATION, DYNAMICS AND MAIN CHALLENGES
Since 2015, Seychelles has been classified as a high-income economy with a per capita Gross National Income (GNI)
of US$14,760. Seychelles has done well in terms of increasing GDP, achieving the MDGs, promoting unity, upholding
its unique Creole culture and ensuring a democratic society with peaceful change of power, while being environmen-
tally conscious. To bolster environmental sustainability, the government has embraced the blue economy concept
as an organising principle to drive growth further, while not only preserving but also building the country's natural
endowments.
For all things to fall in place, good governance is key to ensuring transparency and accountability while improving the
efficiency of the public sector. Regulatory, policy and institutional frameworks must be reviewed and updated to reflect
what we collectively hope to achieve in 15 years. The need to strengthen institutions, build and improve skills of the
workforce, reduce dependency on welfare, improve the quality of education in all aspects of life, deliver better health
services, strengthen efforts for greater social cohesion, and reduce income inequality is fundamentally what we hope
to accomplish in Vision 2033.
Moreover, public sector efficiency is critical both to the productivity agenda and to the state performance agenda.
Therefore, an articulated and realistic National Development Strategy will help set priorities that guide the allocation
of budgetary resources, policy decisions and institutional improvements. This should include a sharp prioritisation of
public investment. The country needs a robust monitoring and evaluation system to track progress on programme
implementation and the impact of the efforts. The supporting statistical system needs an overhaul and can benefit
from the use of more modern techniques to produce sound, timely information. State agencies can be expected to
provide a large share of the needed information, and efforts need to be consolidated to integrate and modernise the
information base for the state and the country at large.
Seychelles has been fortunate in that it has not been exposed to the sharp environmental shocks that have beset many
other small island states. The economy of Seychelles is primarily services-oriented, led in recent years by information
and communications technology (ICT), tourism, fisheries and real estate activities. With limited scope for diversifi-
cation, there is a need to transform the economy by significantly increasing the value-added contributions of each
sector. For example, currently, the value chains in the artisanal fisheries sector are mostly underdeveloped and involve
minimal handling, processing and marketing. Production in the industrial fisheries sector is dominated by canned tuna
(approximately 90 percent by volume), a low-value product processed in a free-trade zone.
Despite the intrinsic challenges that come with being a small, relatively isolated island nation, Seychelles has already
achieved a remarkable level of economic development. In considering the prospects for Seychelles, therefore, the
salient comparators are nearby island states with relevant similarities (for example, Mauritius which is an upper mid-
dle-income economy with a population of 1.3 million and historical links to Seychelles and Maldives, with its high-end
tourism) and other states around the world that have managed to achieve even higher GDP per capita income levels
despite their size: such as Bermuda (US$ 66,670) and Iceland (US$ 46,500)¹.
Rapid economic growth since the 2008-2009 crisis and subsequent recovery has propelled Seychelles to high-in-
come status, but this has been accompanied by continuing vulnerabilities, and some new, growing concerns. The
need to secure the sustainability of the fiscal and the macroeconomic accounts remains paramount in view of contin-
uing pressures on, and risks to, public expenditure. A growing source of macro prudential risk is Seychelles' offshore
corporate sector, potentially affecting the banking system where further progress on anti-money laundering (AML)
regulation and enforcement is needed.
Figures for rankings are GNI per capita converted at PPP rates to international dollars (World Development Indicators, 2015).
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