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Contact at AFI team is Mustapha Jobarteh
This entry was last updated on 19 August 2022 using IFs v7.63.

In this entry, we first describe the Current Path forecast for Seychelles as it is expected to unfold to 2043, the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term vision for Africa.

The Current Path forecast is divided into summaries on demographics, economics, poverty, health/WaSH and climate change/energy. A second section then presents a single positive scenario for potential improvements in stability, demographics, health/WaSH, agriculture, education, manufacturing/transfers, leapfrogging, free trade, financial flows, infrastructure, governance and the impact of various scenarios on carbon emissions. With the individual impact of these sectors and dimensions having been considered, a final section presents the impact of the Combined Agenda 2063 scenario.

We generally review the impact of each scenario and the Combined Agenda 2063 scenario on gross domestic product (GDP) per person and extreme poverty except for Health/WaSH that uses life expectancy and infant mortality.

The information is presented graphically and supported by brief interpretive text.

All US$ numbers are in 2017 values.

Summary

  • The Current Path forecast
    • In the Current Path forecast, Seychelles’ population is expected to increase from an estimated 98 000 people in 2019 to 103 400 people in 2043. The country is forecast to witness significant growth in urbanisation, such that by 2043, 74% of the population will reside in urban areas, compared to 58.6% in 2019. Jump to Demographics: Current Path
    • Seychelles is likely to experience growth in GDP, reaching US$2.3 billion in 2043, up from US$1.6 billion in 2019, driven mainly by the service sector (especially the tourism sector), though its relative share of GDP will modestly decline from 78% in 2019 to 75% in 2043. The country is expected to experience a doubling of GDP per capita from US$15 500 in 2019 to US$30 650 in 2043. Jump to Economics: Current Path
    • The country continues to struggle with poverty rates of 0.051 million people (49.7% of the population) living below the poverty line of US$22.70 in 2043, compared to 0.05 million (48.2%) in 2019. Jump to Poverty: Current Path
    • In the Current Path forecast, Seychelles sees an increase in the share of gas to total energy production from 27.3% in 2019 to 42.9% in 2043, while coal production falls from 45.5% in 2019 to 23.8% in 2043. Jump to Carbon emissions/Energy: Current Path
  • Sectoral scenarios
    • The Stability scenario will improve Seychelles’ score on the governance security index to 0.93 in 2043 and significantly increases GDP per capita to US$33 757 instead of US$33 409 in the Current Path forecast. Jump to Stability scenario
    • In the Demographic scenario, Seychelles can increase GDP per capita to US$33419 in 2043 and reduce poverty to 49.7%. Jump to Demographic scenario
    • The Health/WaSH scenario will increase life expectancy to 78 years and reduce infant mortality per 1 000 live births to 5.1 by 2043, lower than the Sustainable Development Goal target due by 2030. Jump to Health/WaSH scenario
    • In the Agriculture scenario, Seychelles can reduce its food import dependence to 59.1% by 2043. This will reduce the proportion of poor people to 49.6% of the Seychellois population (compared to 49.7% in the Current Path forecast). Jump to Agriculture scenario
    • The Education scenario will result in a higher GDP per capita of US$34 149 by 2043 (against US$33 409 in the Current Path), reducing the number of poor people compared to the Current Path forecast. Jump to Education scenario
    • In the Manufacturing/Transfers scenario, government welfare transfers to households will increase to US$89 million (13.9% of GDP) in 2043 compared to US$80 million (or 14.3% of GDP) in the Current Path forecast. Jump to Manufacturing/Transfers scenario
    • The Leapfrogging scenario will increase mobile broadband subscriptions per 100 people from 32.2 in 2019 to 158.7 in 2043, and also enable electricity access to 99.8% of the population. Jump to Leapfrogging scenario
    • In the Free Trade scenario, there will be an increase in GDP per capita to US$35 022 by 2043 (compared to US$33 409 in the Current Path) and a reduction in the number of poor people in Seychelles to 47.6% of the population, compared with 49.7 in the Current Path forecast. Jump to Free Trade scenario
    • The Financial Flows scenario will decrease the contribution of foreign direct investment to Seychelles’ economy to 10.5% in 2043 compared to 9.4% in the Current Path forecast. Jump to Financial Flows scenario
    • The Infrastructure scenario will increase the percentage of the rural population living within 2 km of all-weather roads to 100% by 2043. Jump to Infrastructure scenario
    • The Governance scenario will increase GDP per capita to US$33 659 in 2043, compared to US$33 409 in the Current Path forecast. Jump to Governance scenario
    • Seychelles’ carbon emissions will increase the most in the Free Trade Scenario (about 6 500 tons more compared to the 2043 Current Path forecast), followed by the Manufacturing/Transfers scenario, while the Leapfrogging scenario reduces carbon emissions compared the Current Path forecast in 2043. Jump to Impact of scenarios on carbon emissions
  • Combined Agenda 2063 scenario
    • The Combined Agenda 2063 has the potential to increase in GDP per capita to US$42 695 in 2043 instead of US$33 409 in the Current Path forecast. There is aggressive growth of the economy to US$3.5billion in 2043, compared to projections of US$2.4 billion on the Current Path, and a significant reduction in the number of people living below the poverty line to 42 000 people (40.44% of the population) instead of 50 000 people (49.7%) in 2043 Current Path forecast. Seychelles carbon emissions are forecast to increase to 241 380 tons by 2043 compared to 218 170 tons in the Current Path forecast. Jump to Combined Agenda 2063 scenario

All charts for High-income Africa

Chart 1: Political map of High-income Africa: Seychelles
Chart
High-income Africa: Current Path forecast

High-income Africa: Current Path forecast

This page provides an overview of the key characteristics of Seychelles along its likely (or Current Path) development trajectory. The Current Path forecast from the International Futures forecasting (IFs) platform is a dynamic scenario that imitates the continuation of current policies and environmental conditions. The Current Path is therefore in congruence with historical patterns and produces a series of dynamic forecasts endogenised in relationships across crucial global systems. We use 2019 as a standard reference year and the forecasts generally extend to 2043 to coincide with the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term development vision.

The Republic of Seychelles consists of 115 islands in the Indian Ocean. In addition to the 115 listed islands in the Constitution of Seychelles, there are additional seven reclaimed islands: Ile Perseverance, Ile Aurore, Romainville, Eden Island, Eve, Ile du Port and Ile Soleil. The country is found along the coastline of Somalia, with its capital, Victoria, 1 500 km east of mainland Africa. Its closest neighbours are the islands of Mauritius, Madagascar, Comoros and Reunion. The climate is tropical rain forests with annual rainfall ranging from 2 900 mm in Victoria to 3 600 mm on the mountain slopes.

Before gaining independence in 1976 from the UK, the country was colonised by the French, and fell into British control during the Napoleonic Wars. Following attempted coups d’état in 1981 and 1986, the constitution was revised in 1993 to adopt a multiparty system. In October 2020, the opposition leader Wavel Ramkalawan won the presidential election, marking the first peaceful transfer of presidential power between different political parties since independence in 1976. Seychelles is a member of the Southern Africa Development Community (SADC). In 2007, it concluded an Economic Partnership Agreement (EPA) with the European Union (EU), one of six countries in Eastern and Southern Africa together with Comoros, Madagascar, Mauritius, Zambia and Zimbabwe. The three official languages of Seychelles are French, English and Seychellois Creole, with Seychellois Creole the most widely spoken.[1WorldAtlas, What languages are spoken in Seychelles?.]

Seychelles is the least populous sovereign country in Africa with a population of 97 500 in 2019. It has a high life expectancy at 74.6 years, low infant mortality rate of 9.8 deaths per live births, and low fertility rate of 2.46 live births per woman in 2020. People in Seychelles predominantly live in urban areas with an urbanisation rate of 58% in 2019, which will rise to 74% by 2043 owing to rural–urban migration and the growth of the urban population.

The US$1.6 billion economy is dominated by the service sector, accounting for 78%, and the manufacturing sector, accounting for 10.3% in 2019. With its beautiful islands and favourable climate, the tourism sector is undoubtedly the most important service sector, contributing 50% of GDP and 70% of total foreign exchange earnings. Its GDP per capita is the highest in Africa at US$30 673 in 2019, making it the only high-income economy in the continent. Despite a low unemployment rate at 8.3%, the poverty rate at US$22.70 per day (the World Bank poverty rate for high-income countries) is high at 48.2% of the population in 2019.

Chart 1: Political map of High-income Africa: Seychelles
Chart
Demographics: Current Path

Demographics: Current Path

Seychelles has the smallest population in Africa at 97 500 people in 2019, which will increase to 1.04 million people by 2043. The total fertility rate fell from 2.9 live births per woman in 1990 to 2.4 in 2020, and will quickly decline to a population replacement rate of 2.1 in 2023. The proportion of people 65 years and older will increase by 11 percentage points from 8.2% in 2019 to 19.2% in 2043, while the cohort of children (15 years and under) will shrink by 5.2 percentage points between 2019 and 2043. This ageing population trend, accompanied by a declining youth bulge, from 27% in 2019 to 24% in 2043, will increase the size of the labour force to 55 000 from 51 000 in 2019. The Seychelles National Policy on Ageing (2016)[2Republic of Seychelles, National Policy on Ageing, November 2016.] has recognised this challenge and strategized ways to enable people to work longer.

In 1990, a small majority of the population of Seychelles lived in rural areas. The country first achieved parity in rural–urban dwellers in 1998, and in 2019, the majority of the population (58.6%) lived in urban areas. In the Current Path forecast, only a quarter of the population will live in rural areas by 2043.

Three-quarters of the Seychelles population live on one island, Mahé, where people have access to jobs and quality social services. Growing at a rate of 0.66% in 2019, Seychelles population lives in its most populous cities/settlements of Victoria (22 881) — also the capital city on Mahé Island — followed by Anse Boileau (4 183), Bel Ombre (4 163), Beau Vallon (4 142), Cascade (4 088), Anse Royale (3 818), Takamaka (2 580), and Port Glaude (2 174).[3UN, World Population Prospects, 2019.]

Chart 4: Population density map for 2019
Chart
Economics: Current Path

Economics: Current Path

Seychelles has had a long period of rapid economic growth since the 1960s, cumulating into a large output. In 1990, GDP (MER) was only US$534 million and almost tripled to US$1.5 billion in 2019. This was followed by a dip to US$1.3 billion in 2020 due to the devastating effect of the COVID-19 pandemic. In the Current Path forecast, total output for Seychelles is expected to reach US$2.2 billion in 2043, representing an additional US$1 billion compared to 2020.

Economic growth has been driven by growth in the tourism sector, especially in accommodation and food services. Due to the country’s reliance on the tourism sector, negative global shocks are readily transmitted into poor growth performance. In the wake of the 2008/09 global financial crisis, the economy shrank by 2.1% and 1.1% in 2008 and 2009, respectively. From 2010 to 2019, the country grew at an average rate of about 5% per annum, reflecting the lack of adverse global shocks and the thriving tourism sector. However, in 2020, the economy shrank by −13.8% due to the travel restrictions and lockdowns associated with the COVID-19 pandemic.

Although many of the charts in the sectoral scenarios also include GDP per capita, this overview is an essential point of departure for interpreting the general economic outlook of Seychelles.

The GDP per capita (PPP) of Seychelles has steadily increased over successive decades. In the Current Path forecast, GDP per capita was US$15 500 in 1990 and doubled to US$30 673 in 2019. In the Current Path forecast, GDP per capita is projected to be US$33 409 in 2043, just about half (55%) of the average per capita GDP for high-income economies.

During the presidency of James Michel, the economy experienced the most significant boost to GDP per capita of US$12 775. Michel positioned the tourism sector at the centre of economic progress in the country.

The informal sector in Seychelles constituted 9.7% of GDP in 2019 – significantly higher than the mean for high-income countries globally. In the Current Path forecast, informality will steadily decline to 7.7% in 2043, which is 6.2 percentage points higher than the average informality in high-income economies of 1.5%. The relatively high level of informality in Seychelles compared to the average high-income country is due to its relatively low human capital development and large agriculture sector. As noted earlier, Seychelles added over US$12 000 to its per capita GDP in the 2010–2019 period, and unemployment was low at 3% in 2019.[4National Bureau of Statistics, Unemployment, 2019.]

The IFs platform uses data from the Global Trade and Analysis Project (GTAP) to classify economic activity into six sectors: agriculture, energy, materials (including mining), manufacturing, service and information and communication technologies (ICT). Most other sources use a threefold distinction between only agriculture, industry and services with the result that data may differ.

Given its large tourist industry, the economy of Seychelles is predominantly a service economy. The service sector accounted for 77.1% of GDP in 2015 and 78% in 2019 before the impact of the COVID-19 pandemic. The pandemic hit the travel and tourism industry very hard, leading to the service sector’s contribution falling to US$1.08 billion, equivalent to a 6.9 percentage point drop in its share of GDP. In the Current Path forecast, the service sector’s share of GDP will remain at about 75% until 2043. Its dollar contribution will, however, increase to US$1.74 billion.

The manufacturing sector is the second largest contributor to output at 10.3% (US$0.17 billion) in 2019. In the Current Path forecast, both the share and amount of the manufacturing sector’s contribution will rise even as the economy marginally reduces its dependence on services. The ICT sector, the third contributor to output, will double from US$0.06 billion to US$0.12 billion in 2043. The share ICT for Seychelles (4.6%) is below the average for high-income economies of 6.3%. Agriculture, the smallest contributor to output, will decline in importance to 3.1% in 2043 from 3.7% in 2019.

The data on agricultural production and demand in the IFs forecasting platform initialises from data provided on food balances by the Food and Agriculture Organization (FAO). IFs contains data on numerous types of agriculture but aggregates its forecast into crops, meat and fish, presented in million metric tons. Chart 9 shows agricultural production and demand as a total of all three categories.

Due to the small size of its domestic agriculture sector, domestic production in Seychelles meets only about a third of demand. As a result, Seychelles imports most of its food requirements. In 2019, the gap between demand and production stood at 625 000 tons and will grow to 709 000 tons in 2043. Moreover, in the Current Path forecast, agriculture’s contribution to GDP will fall from 3.8% in 2019 to 3.1% by 2043 while the population will grow to 104 000 people by 2043, up from 98 000 in 2019. With agriculture contributing just 4% of GDP in 2019 and importation of food commodities at about 90%, food insecurity is a cause for alarm.

Poverty: Current Path

Poverty: Current Path

There are numerous methodologies for and approaches to defining poverty. We measure income poverty and use GDP per capita as a proxy. In 2015, the World Bank adopted the measure of US$1.90 per person per day (in 2011 international prices), also used to measure progress towards the achievement of Sustainable Development Goal (SDG) 1 of eradicating extreme poverty. To account for extreme poverty in richer countries occurring at slightly higher levels of income than in poor countries, the World Bank introduced three additional poverty lines in 2017:

  • US$3.20 for lower middle-income countries 
  • US$5.50 for upper middle-income countries
  • US$22.70 for high-income countries.

Being a high-income economy, extreme poverty is measured at US$22.70 per day and Seychelles has generally a very large proportion of the population that is poor. In 2015, 50 000 people, or 48.2% of the population, were considered to be in extreme poverty. This already high poverty rate increased significantly between 2016 and 2020 by 10.5 percentage points, or 12 000 more people into poverty. However, the Current Path forecast of poverty for Seychelles indicates that poverty will fall back to 49.7%, or 52 000 people, in 2043. Comparatively, Seychelles is a more unequal society than an average high-income economy with a 0.11-point difference in 2019. The higher level and slower decline of poverty in Seychelles compared to other high-income countries is a result of its relatively higher level of inequality and slower economic growth.

Carbon Emissions/Energy: Current Path

Carbon Emissions/Energy: Current Path

The IFs platform forecasts six types of energy, namely oil, gas, coal, hydro, nuclear and other renewables. To allow comparisons between different types of energy, the data is converted into billion barrels of oil equivalent (BBOE). The energy contained in a barrel of oil is approximately 5.8 million British thermal units (MBTUs) or 1 700 kilowatt-hours (kWh) of energy.

In 2019, Seychelles produced most of its energy from coal (45.5%), followed by gas (27.3%) and oil (27.3%). By 2043, the relative share of gas will increase significantly to 42.9% while coal production will reduce to 23.8% and oil production remains more or less the same at 28.6%. Other renewable energy sources such as wind and solar energy will comprise 5% of energy production in the Current Path forecast.

Seychelles’ 2010–2030 energy policy envisions 15% renewable energy production by 2030. However, production is not the same as energy use. Despite its energy production, Seychelles is a net importer of energy at 12% of energy demand in 2019, though this rate reduces to 5.8% in 2043. The country is, therefore, more energy independent than the average high-income economy, which will import half of its energy demand in 2043 in the Current Path forecast.

Carbon is released in many ways, but the three most important contributors to greenhouse gases are carbon dioxide (CO2), carbon monoxide (CO) and methane (CH4). Since each has a different molecular weight, IFs uses carbon. Many other sites and calculations use CO2 equivalent.

In 2019, Seychelles was Africa’s fifth smallest carbon emitter behind Central Africa Republic, Guinea Bissau, Comoros and São Tomé and Príncipe. Carbon emissions in the country steadily rose from 1990 to 2004 when they started a declining trend until 2011. Since 2011, carbon emissions in Seychelles have been on the rise, a trend that will continue to 2043 cumulatively adding 100 000 tons more carbon emissions.

Stability scenario

Stability scenario

The Stability scenario represents reasonable but ambitious reductions in risk of regime instability and lower levels of internal conflict. Stability is generally a prerequisite for other aspects of development and this would encourage inflows of foreign direct investment (FDI) and improve business confidence. Better governance through the accountability that follows substantive democracy is modelled separately.

The intervention is explained here in the thematic part of the website.

The Stability scenario generally signifies increased political stability and reduced internal conflict leading to high FDI inflows and improved accountable governance. After independence in 1976, President René came to power through a coup d’état the year thereafter and stayed in power until 2004. Although he survived at least two attempted coups d’état, Seychelles gained a reputation as one of the most stable African countries. Nevertheless, the country generally enjoys a very high level of government security. In 2019, the governance security index was 0.88, lower than the average for high-income economies of 0.94. In the Current Path, the governance security index will improve by 0.2 points to 0.9 in 2043. In the Stability scenario, the governance security index will increase more rapidly to 0.93 in 2043, though this will still be below the average for high-income economies. High-income economies include mainly mature democracies and the world’s most politically stable nations, hence their high average governance security index of 0.97.

Regime stability and a peaceful environment inspire investor confidence and attract FDI to the country with a positive effect on economic growth. The GDP per capita for Seychelles in 2019 was US$30 673, which is US$18 868 lower than the average for high-income economies of US$49 540. After a decline to US$24 907 in 2020 due to the effect of the COVID-19 pandemic, GDP per capita in the Current Path forecast will rise US$33 409 in 2043. In the Stability scenario, GDP per capita will increase by US$348 more compared to the Current Path forecast in 2043.

The World Bank has set the extreme poverty level at US$22.70 per person for high-income countries that include Seychelles as the only high-income economy in Africa. In 2019, the number of people living in poverty was around 50 000, equivalent to 51.2% of the population. The Stability scenario has only a minimal impact and will reduce the portion of people living below the poverty line to 49.2% by 2043, which is 0.5 percentage points below the Current Path forecast. Also, the number of poor people will decline to 51 000 in 2043. This means that the Stability scenario could lead to 1 000 fewer poor people than the Current Path in 2043.

Demographic scenario

Demographic scenario

This section presents the impact of a Demographic scenario that aims to hasten and increase the demographic dividend through reasonable but ambitious reductions in the communicable-disease burden for children under five, the maternal mortality ratio and increased access to modern contraception. 

The intervention is explained here in the thematic part of the website.

Demographers typically differentiate between a first, second and even a third demographic dividend. We focus here on the contribution of the size of the labour force (between 15 and 64 years of age) relative to dependants (children and the elderly) as part of the first dividend. A window of opportunity opens when the ratio of the working-age population to dependants is equal to or surpasses 1.7.

Seychelles is already in the midst of its demographic dividend. In 2019, the ratio of the working-age population to dependants in Seychelles was 2.2 to 1, meaning that there were about 2.2 working-age persons for each dependant in the country; and that rate will decline to 1.7 to 1 in 2043. This is slightly above the average of 1.9 for high-income economies, which declines more rapidly to 1.5 to 1 in 2043. Seychelles should, therefore, gain more from the contribution that labour makes to economic growth compared to the average contribution to high-income countries should its working-age population have the same levels of health and education.

The infant mortality rate is the number of infant deaths per 1 000 live births and is an important marker of the overall quality of the health system in a country.

In 2019, Seychelles’ infant mortality rate was 9.8 deaths per 1 000 live births, which will decrease to 5.4 deaths in 2043. These rates are roughly double the average for high-income countries but Seychelles does significantly better than most other African countries. Only Tunisia and Libya had lower rates in 2019. Because Seychelles already does well on this indicator, the effect of the Demographic scenario is minimal.

As Seychelles is already experiencing a demographic dividend, the Demographic scenario has a small impact. In 2019, the GDP per capita for Seychelles was US$30 673, which was US$18 869 lower than the average for high-income economies. By 2043, GDP per capita will increase to US$33 419, which is just US$10 more than the projected Current Path forecast of US$33 409. It is also significantly below the US$49 541 average for high-income economies.

The number of people in Seychelles living below the poverty line of US$22 .70 in 2019 was 50 000. Based on the Demographic scenario, this number will steadily rise to 59 000 in 2023, after which it will decline to 52 000 in 2043, which will be on par with the Current Path forecast. Similarly, the proportion of the poor population will reduce to 49.7% in the Demographic scenario, just as in the Current Path forecast.

Health/WaSH scenario

Health/WaSH scenario

This section presents reasonable but ambitious improvements in the Health/WaSH scenario, which include reductions in the mortality rate associated with both communicable diseases (e.g. AIDS, diarrhoea, malaria and respiratory infections) and non-communicable diseases (NCDs) (e.g. diabetes), as well as improvements in access to safe water and better sanitation. The acronym WaSH stands for water, sanitation and hygiene.

The intervention is explained here in the thematic part of the website.

In 2019, total deaths from communicable and non-communicable diseases were 100 and 600, respectively, lower than the average high-income country. In Seychelles, the entire country has access to improved sanitation (as early as since 2014) and universal health coverage is free of charge in the public sector. Seychelles’ ministry of health is now shifting direction to quality healthcare by promoting patient-centred care that provides tailor-made services to individual patients. [5Ministry of Health Seychelles, Health of Our Nation, Health Sector Performance Report 2017.]

Because Seychelles has high levels of basic infrastructure and good healthcare, the Health/WaSH scenario has limited impact compared to its effect in other African countries. For example, access to safe piped water supply was at 95.5% and improved sanitation at 100% in 2019.
At birth, the life expectancy for the average Seychellois was 74.6 years in 2019, compared to the average of 81 years in high-income economies and 65.8 years in Africa. Females have a much higher life expectancy at birth (78.2 years) than males (71.2 years). The Health/WaSH scenario increases life expectancy to 78.1 years by 2043, above the Current Path forecast of 77.4 years.

Because Seychelles has high levels of basic infrastructure and good healthcare, the Health/WaSH scenario has limited impact compared to its effect in other African countries. Seychelles’ infant mortality rate per 1 000 live births in 2019 was 9.8, which is much lower than the SDG target of 25 deaths per 1 000 live births, which Seychelles achieved in 1983. Despite this, the Health/WaSH scenario does reduce communicable and non-communicable diseases and improvements in the water and sanitation infrastructure will reduce the infant mortality rate in Seychelles to 5.1 in 2043, lower than the Current Path forecast of 5.4 deaths per 1000 live births. However, this is higher than the average infant mortality rate for high-income economies of 2.6 deaths per 1000 live births in 2043.

Agriculture scenario

Agriculture scenario

The Agriculture scenario represents reasonable but ambitious increases in yields per hectare (reflecting better management and seed and fertiliser technology), increased land under irrigation and reduced loss and waste. Where appropriate, it includes an increase in calorie consumption, reflecting the prioritisation of food self-sufficiency above food exports as a desirable policy objective.

The intervention is explained here in the thematic part of the website.

The data on yield per hectare (in metric tons) is for crops but does not distinguish between different categories of crops.

Only 3.5% of land in Seychelles is used for crops and 4% for grazing, with much of the remaining land covered by forests. Agriculture therefore contributed only 3.8% of the GDP of Seychelles and employed about 5 000 people in 2019. Its share of GDP and the number of workers in the sector will fall by 2043. The small size and poor performance of the agriculture sector in Seychelles is attributable to the country’s geography, the collapse of the plantation economy, the stigmatisation of agriculture as a job for uneducated people, and the lack of preferential treatment to access to finance, inputs, and markets. Moreover, in 2008 the liberalisation of the meat and meat products market sent many livestock sector actors out of business.[6Government of Republic of Seychelles, National Food and Nutrition Security Policy, June 2013.]

In 2019, the average yield per hectare for crops was 3.5 metric tons per hectare, far below the average of 5.4 metric tons per hectare for high-income economies. In the Current Path forecast, yields will increase to 4.6 metric tons per hectare by 2043. In the Agriculture scenario, the average yield will be 7.3 metric tons per hectare, which is above the 2043 forecast of average yields per hectare of 5.3 for high-income economies. This means that if the country can adopt modern farming methods, including the use of fertiliser and improved seeds, there will be an extra 2.7 metric tons per hectare compared to the Current Path forecast in 2043.

Because of the small size of its agriculture sector, Seychelles’ net agricultural import was 63.9% of demand in 2019, which is expected to fall marginally to 63.8% in 2043. In the Agriculture scenario, the government adopts modern agricultural techniques, irrigates more land for farm use and improves yields per hectare. In these circumstances, the agricultural import dependence of Seychelles will fall marginally to 59.1% in 2043. By contrast, the average African country’s agricultural import dependence was 11% in 2019, forecast to increase to 34.5% in 2043. Fishing is an important economic activity focusing mainly on tuna. Seychelles will be a net exporter of meat from 2030, and by 2043 it will export 6.7% of its fish demand to the rest of the world.

The Agriculture scenario will have a marginal impact on GDP per capita of US$54 in 2043 because of the small size of the agriculture sector in Seychelles.

Implementing good agricultural policies that increase yield per hectare, reduce post-harvest loss and increase calorie demand will promote agricultural productivity, a better food supply chain and greater food security. But because of the small size of the agriculture sector in Seychelles, the impact will be marginal.

Education scenario

Education scenario

The Education scenario represents reasonable but ambitious improved intake, transition and graduation rates from primary to tertiary levels and better quality of education. It also models substantive progress towards gender parity at all levels, additional vocational training at secondary school level and increases in the share of science and engineering graduates.

The intervention is explained here in the thematic part of the website.

Seychelles is the first African country to meet all goals of UNESCO’s education for all (EFA) initiative in 2014. Key to its success in the education sector was the implementation of a free education system in 1981. Education free and compulsory up to the age of 16 and through secondary education up to 18. Learners do not have to pay for books and tuition fees.[7H Amia, UNESCO: Seychelles is only country in Africa to achieve education for all, 13 May 2014, Seychelles News Agency.] In 2019, the mean years of education were 9.5 years, three years more than the average African country, and it will increase to 10.36 in 2043 in the Current Path forecast. In the Education scenario, as the government intervenes in primary, secondary, and tertiary education indicators, the average years of education will increase to 10.4 years, which is still lower than the mean years of schooling of 12.8 years for high-income economies.

The gender gap in mean years of education was skewed in favour of males in 2019 (mean years of schooling were 9.7 years for males compared to 9.4 for females). In the Education scenario, Seychelles will attain gender parity in years of education at 9.9 years for both males and females in 2032. By 2043, females will have 0.20 more years of education than their male counterparts.

Seychelles has focused more on access to education until recently when it turned its attention to quality. The average test score for primary learners in Seychelles for 2019 was 38.1%, which was lower than 47% for the average high-income economy signifying weaker performance in this regard. The Education scenario will increase the average test scores for primary learners to 47.4% in 2043, compared to the Current Path forecast at 40.9%. In 2043, the Education scenario will result in test scores that are 1.9 percentage points less than peers in the high-income group. Generally, females perform better than their male counterparts in primary education in the Current Path forecast and in the Education scenario.

In 2019, the average test score for secondary learners was 47.7%, compared to the average of 53.8% for high-income economies. By 2043 in the Education scenario, the average test score for secondary learners will rise to 59.5%, slightly above the average of 56.9% for high-income economies and 9.9 percentage points more than the Current Path forecast.

In 2019, the GDP per capita for Seychelles was 60% of the average of high-income countries, declining to 55% in 2043. In the Education scenario the gap will be 57%. This is because GDP per capita in the Education scenario is US$741 more than the Current Path forecast of US$33 409, suggesting that investing in education is a powerful way to improve productivity and growth for a high-income economy.

By 2043, in the Education scenario, the number of poor people will be 50 000, representing 48.4% of the population. This means that the Education scenario will reduce the proportion of poor people by 1.3 percentage points in 2043 compared to the Current Path forecast.

Manufacturing/transfers scenario

Manufacturing/transfers scenario

The Manufacturing/Transfers scenario represents reasonable but ambitious manufacturing growth through greater investment in the economy, investments in research and development, and promotion of the export of manufactured goods. It is accompanied by an increase in welfare transfers (social grants) to moderate the initial increases in inequality that are typically associated with a manufacturing transition. To this end, the scenario improves tax administration and increases government revenues.

The intervention is explained here in the thematic part of the website.

Chart 30 should be read with Chart 8 that presents a stacked area graph on the contribution to GDP and size, in billion US$, of the Current Path economy for each of the sectors.

Because of the importance of tourism, the economy of Seychelles is dominated by the service sector that contributed 78% to GDP in 2019 (equivalent to US$1.26 billion), followed by the manufacturing sector that contributed 10% (equivalent to US$162 million) and ICT at 4.6% (equivalent to US$74 million). Although the service sector will make the most significant additional contribution to GDP in the Manufacturing/Transfer scenario compared to the Current Path forecast (equivalent to US$0.12 billion in 2043), its contribution to GDP will decline by 0.15 percentage points compared to the Current Path forecast. The manufacturing sector – the second largest contributor to GDP – will add US$30 million to GDP in the Manufacturing/Transfer scenario compared to the Current Path in 2043, representing a 0.47 percentage point increase. The third largest contributor to GDP in 2043 will be the ICT sector, with an additional contribution of US$10 million or 0.03 percentage points more compared to the Current Path forecast. The contribution of the agriculture sector will decline by 0.19 percentage points to 2.9% of GDP with the result that its size in 2043 will be similar to that in 2019.

The Manufacturing/Transfers scenario will increase government welfare transfers by an additional US$10 million compared to the Current Path in 2043. In 2019, total welfare transfers to households were US$130 million, representing about 11.2% of GDP, which is below the average of 12.8% of GDP for high-income economies. In the Manufacturing/Transfers scenario, this will increase to US$180 million by 2043, constituting almost 10.1% of GDP, which is far more than the US$170 million in 2043 based on the Current Path. However, the gap between Seychelles and its income group peers regarding government welfare transfers as a per cent of GDP will widen from 1.6 percentage points in 2019 to 2.2 percentage points in 2043 in the Manufacturing/Transfers scenario.

The manufacturing sector was the second largest contributor to GDP in Seychelles in 2019, mostly consisting of small-scaled and food processing plants.[8Commonwealth Network, Seychelles – Find industry and manufacturing expertise in Seychelles.] Of significance are the manufacture of beer, cigarettes, chemicals and furniture. In the Manufacturing/Transfers scenario, Seychelles’ GDP per capita will increase by 5% to US$33 409, which is US$2 736 more than the 2043 Current Path forecast.

In the Current Path forecast, the poverty rate will decline from 51.2% in 2019 to 49.7% in 2043, and the number of poor people will fall from 59 000 people to 52 000 people in 2043. In the Manufacturing/Transfers scenario, the proportion of extremely poor people will decline to 47.4% compared to the Current Path forecast of 49.7% in the same year.

Leapfrogging scenario

Leapfrogging scenario

The Leapfrogging scenario represents a reasonable but ambitious adoption of and investment in renewable energy technologies, resulting in better access to electricity in urban and rural areas. The scenario includes accelerated access to mobile and fixed broadband and the adoption of modern technology that improves government efficiency and allows for the more rapid formalisation of the informal sector.

The intervention is explained here in the thematic part of the website.

Fixed broadband includes cable modem Internet connections, DSL Internet connections of at least 256 KB/s, fibre and other fixed broadband technology connections (such as satellite broadband Internet, ethernet local area networks, fixed-wireless access, wireless local area networks, WiMAX, etc.).

The ICT sector was the third largest contributor to GDP in Seychelles. In 2019, Seychelles had 22.2 fixed broadband subscriptions per 100 people, the second highest Internet penetration rate in Africa after Mauritius (at 23 per 100). In the Current Path forecast, fixed broadband subscriptions will increase by more than 100% to 48.6 in 2043. The Leapfrogging scenario will lead to an additional 1.4 subscriptions per 100 people compared to the Current Path forecast in 2043. Across the forecast horizon, fixed broadband subscriptions in Seychelles will be lower than the average for high-income economies.

 Mobile broadband refers to wireless Internet access delivered through cellular towers to computers and other digital devices.

Seychelles had a mobile broadband subscription rate of 32.18 per 100 people in 2019, three times lower than the average for high-income economies at 112.2 per 100 people. In the Leapfrogging scenario, Seychelles will more than triple its mobile broadband subscription to a saturation level of 160 subscriptions per 100 people in 2028, compared to the Current Path forecast of 90 and 160 subscriptions by 2045. Seychelles will do better than its peers in the high-income group in 2043 by a margin of 5.3 subscriptions per 100 people.

Seychelles effectively achieved universal access to electricity some years ago and is on par with high-income economies. As a result, the Leapfrogging scenario has minimal impact.

In the Leapfrogging scenario, the GDP per capita of Seychelles’ will increase from US$30 673 in 2019 to US$33 855 in 2043, an increase of slightly more than 1% and (or US$446 more) compared to the Current Path forecast for that year.

In the Leapfrogging scenario, the number of extremely poor people in 2043 will be 51 000 people, representing 49.05% of the population. This is 1 000 fewer people than the 52 000 people in the Current Path forecast. At the US$1.90 poverty line, only 1.3% of the population was considered to be extremely poor in 2019.

Free Trade scenario

Free Trade scenario

The Free Trade scenario represents the impact of the full implementation of the African Continental Free Trade Area (AfCFTA) by 2034 through increases in exports, improved productivity and increased trade and economic freedom.

The intervention is explained here in the thematic part of the website. 

The trade balance is the difference between the value of a country’s exports and its imports. A country that imports more goods and services than it exports in terms of value has a trade deficit, while a country that exports more goods and services than it imports has a trade surplus.

Seychelles imports all machinery, equipment, food, fuel and a range of consumer goods. It exports mainly canned tuna fish. Its major trading partners are the UK, France, Germany, and South Africa. It is a member of a host of regional economic communities that seek to promote trade through integration, such as SADC, the Common Market for Eastern and Southern Africa (COMESA), the Indian Ocean Commission (IOC), the Tripartite Free Trade Area, an EPA with the EU, and the World Trade Organization (WTO).

Like many African economies, Seychelles is a net importer of goods and services and the impact of the Free Trade scenario is that the combined value of exports and imports increases by 48% in 2043. In 2019, Seychelles’ trade deficit came to 7.1% of GDP. The country will begin to see an improvement in its trade balance both in the Current Path forecast and in the Free Trade scenario. In the Free Trade scenario, Seychelles will sustain a trade surplus until 2043, when its trade balance is 7.5% of GDP. The Free Trade scenario will lead to a more significant abundance on the trading account than the Current Path forecast during the decade of 2024–2034; after that, the Current Path forecast has a larger trade surplus than the Free Trade scenario. This suggests that the full implementation of the AfCFTA will, in the long term, worsen the trade balance of Seychelles compared to its Current Path forecast pointing to the need for additional measures, such as those reflected in the Leapfrogging and Manufacturing/Transfers scenarios. Because Seychelles trades more with non-African countries, an AfCFTA scenario will lead to more trade diversion than trade creation, leading to a worsening of the current account in 2043.

The GDP per capita for Seychelles is estimated to increase to US$35 022 by 2043 in the Free Trade scenario, which is US$1 613 (or 5%) more than the Current Path forecast in 2043. The impact of the Free Trade scenario is powerful: it allows Seychelles to largely maintain the ratio of its GDP per capita compared to the average for high-income countries. In 2019, the GDP per capita of Seychelles was 59% of the average for high-income countries. Instead of that declining to 55% in the Current Path forecast, the GDP per capita of the Seychelles in the Free Trade scenario would be 58% of the average for high-income countries in 2043.

The impact of the Free Trade scenario is to reduce the number of people living below the extreme poverty line of US$22.70 by 52 000 people (2.1 percentage points) by 2043.

Financial Flows scenario

Financial Flows scenario

The Financial Flows scenario represents a reasonable but ambitious increase in worker remittances and aid flows to poor countries, and an increase in the stock of foreign direct investment (FDI) and additional portfolio investment inflows to middle-income countries. We also reduced outward financial flows to emulate a reduction in illicit financial outflows.

The intervention is explained here in the thematic part of the website.

Foreign aid was a significant source of capital for economic development in Seychelles in the 1970s (35% in 1971) and 1980s (15%). As the country became more prosperous, aid money was increasingly diverted to low-income economies with Seychelles receiving less than 1% of GDP in 2019. In the Current Path forecast, this will further decline to less than 0.5% of GDP. The Financial Flows scenario will even attract less foreign aid (0.46%) in 2043 as other sources of capital in the form of FDI, portfolio investment flows and remittance becomes more pronounced.

Seychelles’ FDI inflow in 2019 amounted to 14.1% of GDP, which is higher as a portion of GDP than the average of 3.4% for high-income economies, although the actual amount, US$278 million, is quite small. Annual inflows have also fluctuated from year to year. By 2043, the net FDI inflows to the country will be about 9.4% of GDP in the Current Path forecast (US$218 million). In the Financial Flows scenario, FDI will come to 10.4% of GDP in 2043 (US$251 million), which is above the average of 4% for high-income economies. There is clearly significant scope for the Seychelles to further increase FDI.

Foreign workers in tourism, construction and production service are common in Seychelles, mainly coming from Bangladesh and neighbouring Comoros and Madagascar. Seychelles, like many high-income economies, is a net sender of remittances. The Minister for Employment, Immigration and Civil Status, Myriam Telemaque, shared a new policy with the National Assembly in October 2019 that seeks to protect the rights of Seychellois to decent work and see fewer foreign experts in Seychelles.

In 2019, the total value of remittances that Seychelles sent amounted to US$90 million, which constituted about 5.8% of GDP. The absolute value of remittances (and remittances as a percentage of GDP sent) in the Current Path forecast are projected to increase to US$170 million in 2043. In the Financial Flows scenario, outward remittances are projected to increase to US$190 million, representing 8.1% of GDP in 2043 and US$20 million more than the Current Path forecast for that year.

Seychelles’ GDP per capita is estimated to increase to US$34 052 by 2043 in the Financial Flows scenario. This represents an increase of US$643 (or 2%) over the Current Path projection in the same year.

Trade openness will reduce poverty in the long term after initially increasing it due to the redistributive effects of trade. Most African countries export primary commodities and low-tech manufacturing products, and therefore a continental free trade agreement (AfCFTA) that reduces tariffs and non-tariff barriers across Africa will increase competition among countries in primary commodities and low-tech manufacturing exports. Countries with inefficient, high-cost manufacturing sectors might be displaced as the AfCFTA is implemented, thereby pushing up poverty rates. In the long term, as the economy adjusts and produces and exports its comparatively advantaged (lower relative cost) goods and services, poverty rates will decline.

In the Financial Flows scenario, the total number of people projected to live below the poverty line of US$22.70 will decline by 2% to 50 642 in 2043, representing 48.9% of the total population, or 82 000 fewer people, compared to the Current Path.

Infrastructure scenario

Infrastructure scenario

The Infrastructure scenario represents a reasonable but ambitious increase in infrastructure spending across Africa, focusing on basic infrastructure (roads, water, sanitation, electricity access and ICT) in low-income countries and increasing emphasis on advanced infrastructure (such as ports, airports, railway and electricity generation) in higher-income countries.

Note that health and sanitation infrastructure is included as part of the Health/WaSH scenario and that ICT infrastructure and more rapid uptake of renewables are part of the Leapfrogging scenario. The interventions there push directly on outcomes, whereas those modelled in this scenario increase infrastructure spending, indirectly boosting other forms of infrastructure, including those supporting health, sanitation and ICT. 

The intervention is explained here in the thematic part of the website.

Similar to other high-income countries, Seychelles has effectively achieved 100% electricity access and the Infrastructure scenario has minimal impact.

Indicator 9.1.1 in the Sustainable Development Goals refers to the proportion of the rural population who live within 2 km of an all-season road and is captured in the Rural Access Index.

Seychelles has effectively achieved full access on this measure. In 2019, 96.8% of all rural dwellers in Seychelles resided within 2 km from an all-weather road, which was marginally lower than the average of 98.1% for high-income economies. In both the Current Path forecast and the Infrastructure scenario, this is expected to rise to 100% in 2028.

Because Seychelles already does well on all dimensions of infrastructure, the impact of the Infrastructure scenario on GDP per capita is small, at a 1% (or US$425) improvement compared to the Current Path forecast for that year to US$33 834 by 2043.

By 2043, the proportion of the extremely poor population is expected to decline from 51.2% in 2019 to 49.2% in 2043 in the Infrastructure scenario, a difference of 2 percentage points.

Governance scenario

Governance scenario

The Governance scenario represents a reasonable but ambitious improvement in accountability and reduces corruption, and hence improves the quality of service delivery by government.

The intervention is explained here in the thematic part of the website.

As defined by the World Bank, government effectiveness ‘captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies’.

Chart 51 presents the impact of the interventions in the Governance scenario on government effectiveness.

In 2019, Seychelles’ scored 3 out of 5 for government effectiveness, below the average of 3.7 for high-income countries. In both the Current Path forecast and the Governance scenario, government effectiveness is estimated to increase over the period, although the increase in the Governance scenario is higher than in the Current Path forecast by 0.011 percentage points. Seychelles’ score for 2043 will be lower compared to the average for high-income countries at 3.9. Governance security will make little difference in government effectiveness because of the deeply rooted effects of the long-standing People’s Party on the Seychellois people.

In the Governance scenario, Seychelles’ GDP per capita is projected to increase to US$33 659 in 2043, which is US$250 more than the estimates in the Current Path forecast but lower than the average for high-income economies. This suggests that deepening of substantive democracy in the form of reducing corruption, improved gender empowerment, and better democracy can lead to more accountability, stronger institutions and greater inclusion. That is, improved democratic accountability can lead to an additional US$250 in GDP per capita compared with the Current Path in 2043.

The proportion of people living below the poverty line of US$22.70 is expected to decline to 49.3% in 2043 in the Governance scenario, which is higher than the high-income economies. It also corresponds to about 1 000 fewer people in poverty than in the Current Path forecast for 2043.

Impact of scenarios on carbon emissions

Impact of scenarios on carbon emissions

This section presents projections for carbon emissions in the Current Path for Seychelles and the 11 scenarios. Note that IFs uses carbon equivalents rather than CO2 equivalents.

Due to limited industrial activity, Seychelles’ total quantity of carbon emitted in 2019 was about 156 760 tons, and is set to increase to 218 170 tons in 2043. The Free Trade scenario will lead to the greatest carbon emissions in Seychelles by 2043 of 224 580 tons (about 6 500 tons more than in the Current Path), followed Manufacturing/Transfer scenario. The least carbon-intensive scenario is the Leapfrogging scenario as it leads to less carbon emissions than in the Current Path forecast in 2043.

Combined Agenda 2063 scenario

Combined Agenda 2063 scenario

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The Combined Agenda 2063 scenario consists of the combination of all 11 sectoral scenarios presented above, namely the Stability, Demographic, Health/WaSH, Agriculture, Education, Manufacturing/Transfers, Leapfrogging, Free Trade, Financial Flows, Infrastructure and Governance scenarios. The cumulative impact of better education, health, infrastructure, etc. means that countries get an additional benefit in the integrated IFs forecasting platform that we refer to as the synergistic effect. Chart 55 presents the contribution of each of these 12 components to GDP per capita in the Combined Agenda 2063 scenario as a stacked area graph.

The scenarios with the greatest impact on GDP per capita by 2043 are the Free Trade and Manufacturing/Transfers scenarios. In these two scenarios, GDP per capita increases by US$1 612 and US$1 142 above the Current Path forecast in 2043, equivalent to an increase of almost 5% in both instances. The scenarios with the least impact on GDP per capita are Health/WaSH and Demographics, which is understandable since Seychelles already does well in the delivery of healthcare and WaSH infrastructure and is already experiencing a demographic dividend. The impact of the interventions in both instances is therefore small. The synergistic effect of all scenarios is an extra addition to GDP per capita of US$741, different from the effects of the individual scenarios.

Whereas Chart 55 presents a stacked area graph on the contribution of each scenario to GDP per capita as well as the additional benefit or synergistic effect, Chart 56 presents only the GDP per capita in the Current Path forecast and the Combined Agenda 2063 scenario.

In the Combined Agenda 2063 scenario, Seychelles’ GDP per capita will increase to US$40 319 in 2043. This is US$6 910 (or 21%) more than in the Current Path forecast. However, Seychelles’ GDP per capita in the Combined Agenda 2063 scenario will still constitute only 67% of the average for high-income economies. In 2019, it was 60%, indicating that in the Combined Agenda 2063 scenario, Seychelles starts to close the gap.

The Combined Agenda 2063 scenario will reduce extreme poverty in Seychelles by 10 percentage points from 50% to 40%. Instead of 51 500 extremely poor people, Seychelles will have 42 200 in 2043.

See Chart 8 to view the Current Path forecast of the sectoral composition of the economy.

All six sectors of the economy will be larger in the Combined Agenda 2063 scenario by 2043 compared to the Current Path forecast, but the largest increase will accrue to the service sector that will increase by US$683 million (or 39%) compared to the Current Path forecast. The ICT sector will increase by 4% and manufactures by 2%. The increase for the other sectors, agriculture, energy and materials, are below 1%.

Implementing all 11 scenarios will increase the size of the Seychelles economy by 33% above the Current Path forecast in 2043 (US$3.1 billion instead of US$2.3 billion). The large reliance on tourism and fishing means that Seychelles is vulnerable to shocks such as the COVID-19 pandemic and the effects of climate change. A comprehensive development pathway that prioritises the diversification of the sources of growth and improved food production would provide Seychelles with a degree of protection against large swings in food prices and restrictions on international travel.

With its small, service-based economy and population, Seychelles released around 150 000 tons of carbon in 2019, that will increase to 218 000 tons in 2043. In the Combined Agenda 2063 scenario, Seychelles will release 241 000 tons of carbon in 2043, an increase of less than 11%.

Endnotes

  1. WorldAtlas, What languages are spoken in Seychelles?.

  2. Republic of Seychelles, National Policy on Ageing, November 2016.

  3. UN, World Population Prospects, 2019.

  4. National Bureau of Statistics, Unemployment, 2019.

  5. Ministry of Health Seychelles, Health of Our Nation, Health Sector Performance Report 2017.

  6. Government of Republic of Seychelles, National Food and Nutrition Security Policy, June 2013.

  7. H Amia, UNESCO: Seychelles is only country in Africa to achieve education for all, 13 May 2014, Seychelles News Agency.

  8. Commonwealth Network, Seychelles – Find industry and manufacturing expertise in Seychelles.

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Cite this research

Mustapha Jobarteh (2022) High-income Africa. Published online at futures.issafrica.org. Retrieved from https://futures.issafrica.org/geographic/income-groups/high-income-africa/ [Online Resource] Updated 19 August 2022.