Over the past few decades, Seychelles’ political environment has been stable. Democratic elections take place every five years and the country has instituted a multi-party system since the year 19926. The LDS ended the PL’s long reign in 2016 when it won 49.6% of the National Assembly electoral votes which earned its 19 seats compared to PL’s 14 seats in the Assembly7.
The main challenges facing this small island are the greater need to diversify the economy and being vulnerable to external shocks. Growth has to be made greener and inclusive for the purposes of protecting the country’s natural environment which is vulnerable against any adverse climate changes that might affect the environment. The issue of economic diversification has been raised by the government of Seychelles as one of the challenges which hinder economic growth and a market diversification strategy was therefore established and it has been suggested that the government has to focus on the development of the private sector8 in order to overcome this challenge, however it needs an environment that is open to expanding to new business areas.
The tourism sector is a vital driver of economic growth for this small island. It accounts for about 26% of GDP, provides 30% of employment to the citizens and 70% of foreign exchange earnings. The fisheries sector is also the second largest driver of economic growth however the volatility in the fish stocks and the threat of Somali pirates pose a significant challenge for this sector. This island is widely known for its unique biodiversity environment more especially its rare forests and bird species. However, all of this is threatened by direct impacts from humans like climate change. There are interventions that the government has taken to address these environmental challenges such as being part of the Small Island Developing States (SIDS), where it has played an active role like being one of the first countries to sign the three Rio global environmental conventions. Politically, Seychelles recognized the importance of these global instruments through the implementation of Agenda 219.
During the month of April, President Faure visited Kenya and an agreement was signed amongst the two countries. The main aim of this agreement is to improve trade and security between these two countries10. Due to this agreement, Kenya will now begin to export more human capital and agricultural products to Seychelles. This agreement benefits both the countries concerned and ensures a greater well-being for the citizens of the two countries. This also boosts tourism, regional trade and investment and political ties between Kenya and Seychelles. This will lead to a significant boost in Seychelles’ economy given the fact that a large part of their earnings come from the tourism sector.
The Seychelles’ economy has grown strongly over the last decade, improving income per capita by 52.1% from USD 9,707.0 in 2009 to USD 14,785 in 201511. The archipelago’s economy is mainly driven by tourism which contributed approximately 22.2% of GDP12. Fishing and tourism also contributed approximately 70% of export earnings from 2010-2015. Seychelles’ economic growth averaged 5.1% per annum from 2010-2015, and is estimated to have declined 4.4% in 201613. However, the government needs to encourage economic diversification to reduce vulnerability to external shocks and the country’s dependency on tourism and fisheries sector, as it has been already emphasised above.
1 African Economic Outlook
2 Electoral Commission of Seychelles
3 State House
4 Seychelles News Agency
5 Electoral Commission of Seychelles
6 Electoral Commission of Seychelles
7 Electoral Commission of Seychelles
8 African Economic Outlook, ibid.
9 Government of Seychelles
10 The Presidency of Kenya
11-12 National Bureau of Statistics
13 World Bank
14 African Economic Outlook, ibid.
15 International Monetary Fund
16 African Economic Outlook, ibid.
17 International Monetary Fund, ibid.