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Seychelles – a socio-economic snapshot

Seychelles – a socio-economic snapshot

The Republic of Seychelles, an archipelago of 115 islands, gained its independence in 1976. Over 4 decades, its per capita income has expanded by roughly seven times. Its estimated GDP (Purchasing Power Parity) for 2016 of around US$2.6 Billion originates from: 83.5% contributed by services (inclusive mainly tourism), 13.9% by industry and 2.6% by agriculture. Estimated GDP (per capita) for 2016 was around US$28,000. The International Monetary Fund (IMF) has predicted GDP annual growth between 3.5% and 3.7 % through 2018.

Today, the pre-independence, subsistence level of existence for a large majority of the population is a distant past for the bulk of the Seychellois. Seychelles has progressed to emerge as the very first high-income economy in Africa, according to World Bank’s classification. This is a positive and well-acclaimed achievement that nevertheless, comes with a price. The status disqualifies the economy from concessional resources for economic, social and environmental development and conservation. Yet the statutory adverse conditions of lack of economies of scale due to size, distance from main markets, paucity of skilled as well as qualified human and natural resources leave the small, face-to-face island economy very vulnerable to external shocks on which it depends for a large majority of its daily consumables. Thus, the focus on judicious management of resources under the present national theme of transparency, accountability and good governance, is timely and appropriate at this juncture.

On the international stage, poverty rates in Seychelles are expected to remain among the lowest in the world outside the ‘Organization for Economic Cooperation and Development’ (OECD). Recent estimates show that extreme poverty, using the international poverty line of US$1.90 per day in 2011 purchasing power parity (PPP), stood at 1.1% of the population in 2013. In the same year, moderate poverty, based on the US$3.1 per day (in 2011 PPP) poverty line was 2.5% of the population. Income inequality is one of the Republic’s main concern as it is considered substantial, with a gross income-based Gini index of 0.46 in 2013, one of the highest in the region.

A recent poverty analysis based on national household expenditure surveys by the National Statistics Bureau (NSB) revealed that 40% of the Seychelles population lives below the established poverty line in the high-cost Paradise. Creating a lot of concern, the Government has reverted to focus attention on policies to try and lower the cost of living by exempting VAT on a longer list of items considered essential and raising remuneration by introducing the 13th month salary across the board. The effectiveness of those policies remains to be felt by consumers in the free market environment of Seychelles. However, it seems more likely that the effects of cost-push inflationary tendencies as well as the reluctance for merchants and traders to pass on the VAT exemptions to customers seem to militate against the intended result of alleviating the exorbitant cost of living plight of the consumers in the absence of any form of price-controls of yester-year. Other innovative medium to long-term solutions must be found and tabled for consideration.

The consumers referred to above are locals as well as the tourists whose industry is the most significant foreign exchange earner ahead of the second pillar of the economy, which is the fisheries industry. The fact remains that with stiffer regional and global competition, Seychelles cannot afford to price itself out of the market to the benefit of its competitors in the region and further afield. Given much more efficient access to information, all potential clients have choices and cost is one of their primary concern in deciding the location of their next holiday destination.  Thus reasonable prices, enhanced presence in terms of visibility on various relevant markets and quality service delivery as the perfect hosts, always with the famous Seychellois smiles should remain our consistent KPIs (Key Performance Indicators).

The prevalence of the rule of law, peace, stability, safety and security are elements that are often taken for granted, yet, they are the very platforms for a successful and growing tourism industry.  The prevalent challenges such as social-ills, especially with regards to drugs and alcohol abuses leading to petty crimes should also be addressed with greater effectiveness and conviction. Their respective levels could make or break the country’s goose that has been laying golden eggs in a significant way since the opening of the Seychelles International Airport.

This one quintessential infrastructure opened up the tourism industry that has brought much wealth and spin-offs to the island economy. It is clear that in this era of sustainable development and need to mitigate against the adverse effects of Climate Change, Seychelles has the potential to do a lot more than it has been able to register to-date.

What if we could independently produce and store renewable energy starting with solar, that is clean, free, natural from all our roof-tops? What if we could harvest much of the healthy rain-water that falls from the latter? What if from the same roof-tops, we could all enjoy hot water showers and baths? What if we could introduce and operate a smart-grid through Public Private Partnerships that could take on as much renewable energy that can be produced from various existing modes to store and deliver to where its needed? What if in doing so we benefit from a new and more powerful fiber-optic cable that will greatly enhance our connectivity with the world, consolidate our aspirations for the building of a ‘knowledge-based society’ and give a boost to the potentials of our third economic pillar – the Financial and Logistics Services Sector? What if the apparent lack of inclusivity claimed by the World Bank is partially addressed by each roof owner becoming a minor shareholder in the venture responsible to produce, mange and deliver the renewable energy produced? Could such transformational development single out Seychelles as one of the foremost environmentally conscious and forward-looking nations of the region? Would that like the construction of our international airport be the catalyst for the creation of more opportunities, wealth creation and prosperity?

Indeed, what if?  You may think I’m a dreamer and I would not be the only one – but in all the above aforementioned scenarios, I am far from dreaming. Those are realizable objectives that are being proposed through a PPP. They are currently at the very early stages of being proposed to Government by investors. Due diligence of the investors and detailed feasibility of the proposals have yet to be finalized pending an indication of interest from the State to partner and realize the “Hexagon Infrastructure Program”.

Government is not being requested to contribute financial capital but rather use its leverages as a facilitator and enabler on the local scene to make it all happen. It is realizable as long as leaders from all angles see and believe in the latent potentials of such a comprehensive set of investments in an era where it is being acknowledged that Foreign Direct Investment is abating and needs a boost to sustain economic growth and development.

Standing at a cross-road on the eve that Seychelles is going to launch the processes for developing an inclusive long-term Vision 2032 followed by its 5-year National Development Strategy to articulate in greater detail how the visions of the Seychellois people will be achieved, the time has come to think in effective, transformational terms rather than making cosmetic and paper-plastering propositions in this unique and timely opportunity to lay even more solid foundations for the next generation.  We all have our part to play and we should be forward looking, bold and willing to embrace innovations in the era of Sustainable Development.

Read the full article: https://eturbonews.com/162307/seychelles-socio-economic-snapshot

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