Economical overview
Seychelles is a rich country compared to many
other African countries. As the only sub-Saharan
country, Seychelles is placed in the "very high human
development" category by the UN agency UNDP.
The economy is mainly based on tourism and fishing.
The island nation is also an important financial center.
Tourism is of the greatest economic importance because
it creates many jobs and affects other sectors, such as
the construction industry and transport as well as
banking and retail.
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Countryaah.com:
Major imports by Seychelles, covering a full list of top products imported by the country and trade value for each product category.
Calculated in income per inhabitant, Seychelles has
had a favorable economic development since independence
in 1976. Gross domestic product (GDP) per inhabitant
more than ninefold by 2005. After a sharp economic
downturn with negative growth around the turn of the
millennium, the economy began to recover in 2006. The
global economic crisis 2008 led to a payment crisis in
Seychelles as tourist income fell. An extensive reform
program and support from the International Monetary Fund
(IMF) has subsequently contributed to a substantial
upswing.
Distinct tourist country
Tourism accounts for about a quarter of GDP and
accounts for more than two-thirds of the country's
foreign currency revenue. One problem, however, is that
over 60 percent of tourism revenue is used to pay for
the import goods and services that the industry
requires.
The number of tourists fell as a result of the
terrorist attacks against the United States in 2001 and
the tsunami in the Indian Ocean in 2004, but a few years
later the Seychelles tourism industry was back on its
feet. In 2013, the number of tourists increased by more
than 10 percent compared to the previous year. In 2013,
the number of visitors exceeded 230,000, even though the
government set a maximum of 200,000 tourists per year to
protect the environment. Since then, the number of
tourists has continued to increase to almost 350,000 in
2017 (see Tourism).
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including SYC which represents the country of Seychelles.
The fishery, mainly canned tuna, accounted for almost
90 percent of the country's goods exports in 2017. It
also provides revenue from the sale of fishing licenses
to foreign vessels.
Financial center
The Seychelles has a financial center with thousands
of international companies attracted to the islands with
tax exemption and banking secrecy. The financial sector
has grown sharply since 2002, when the Western
Cooperation Organization OECD removed Seychelles from
its black list of countries suspected of money
laundering.
The export-promoting industrial zone that was created
in 1995 has not had much significance for the country's
economy (see Industry).
Since the introduction of multi-party systems in
1993, the economy has been liberalized. A number of
state-owned companies have been privatized and the
government plans to sell even more companies. A new
investment law from 2005 has meant that foreign
investment has increased significantly. The same year,
the government gave the central bank greater
independence. In 2006, Parliament passed a new, more
liberal, labor market law, which, among other things,
increased opportunities for employers to require their
employees to work overtime.
In 2009, the government launched a large tax reform,
with, among other things, increased the profit threshold
for when companies have to start paying tax and reduced
employer contributions to social insurance for
low-income people. The following year, an income tax for
workers of almost 19 percent was introduced.
Fixed exchange rate abolished
A major problem for the economy was for a long time
the lack of foreign currency, which was largely due to
an excessively high exchange rate for the rupee, which
among other things led to widespread black exchange. In
the black market, the value of the rupee was often twice
as high as the official exchange rate. The high exchange
rate made it difficult for companies to expand and
discouraged companies from investing in the country. The
International Monetary Fund (IMF) lent pressure for
Seychelles to release the fixed exchange rate and
refused to enter into an agreement with the country on,
for example, debt write-offs due to the overvalued
rupee. Despite concerns about rapid price increases, the
government decided in 2006 to abolish the fixed exchange
rate against the US dollar. The rupee fell in value
against the dollar, the euro and the British pound.
inflation,
The central government had a large budget deficit for
a long time, which was mainly covered by domestic loans.
A few years into the 2000s, deficits began to decline
and since 2010 a budget surplus has been noted.
Given Seychelles' high GDP per capita, the country is
not a priority beneficiary. Assistance has been steadily
declining since the early 1990s and was $ 37 million in
2012. Important donors are France, the UK and other EU
countries, as well as the World Bank and the African
Development Bank (ADB). Despite amortization of debt,
total external debt has increased slightly in recent
years, from USD 1.4 billion in 2010 to USD 1.8 billion
in 2013.
Successful economic reforms
The international financial crisis, which struck in
early 2008, hit the Seychelles tourism industry. Already
in September that year, the number of visitors had
decreased by 11 percent. The government announced in
October that it was unable to pay its debts.
Negotiations on how to resolve the crisis began with the
IMF. The government called for a tenth of the civil
servants to resign in order for the state to save money.
In November, the IMF promised support of the equivalent
of $ 26 million over two years, in exchange for, among
other things, the government limiting the state's role
in the economy and taking measures to promote the
private sector.
In 2010, the economy began to grow again, thanks in
large part to increased tourism revenues. According to a
report by the IMF in May that year, a number of reforms,
such as a new tax system and better control of
government finances, had contributed to the growth. The
economy continued to grow at a good pace between 2011
and 2014, mainly due to the growing tourist flow.
FACTS - FINANCE
GDP per person
US $ 16,434 (2018)
Total GDP
US $ 1,590 million (2018)
GDP growth
3.6 percent (2018)
Agriculture's share of GDP
2.0 percent (2018)
Manufacturing industry's share of GDP
6.4 percent (2018)
The service sector's share of GDP
70.4 percent (2018)
Inflation
2.0 percent (2019)
Government debt's share of GDP
56.9 percent (2018)
Currency
Seychelles Rupee
Merchandise exports
US $ 562 million (2018)
Imports
US $ 1,234 million (2018)
Current account
- US $ 269 million (2018)
Commodity trade's share of GDP
117 percent (2018)
Main export goods
canned tuna, re-export of oil products
Largest trading partner
France, United Kingdom, United Arab Emirates, Italy,
Spain (2012)
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