This country profile was published in November 2009 in our annual 'Africa in 2010' issue. The next edition, 'Africa in 2011' will be on sale in November 2010.

Country Profile

Top Seychelles Companies

Top Seychelles Banks

President James Michel has promised that the run-up to the next national elections in 2011 will be all about the economy. And rightly so, as much of 2009 was spent mending record high inflation rates which were only second in Africa to the hyperinflation in Zimbabwe. The IMF came to the rescue in November 2008 after the government defaulted on bond payments, and since then Michel has been reforming the state machinery and its control of the economy. Things left to be done include a revision of the tax system, an overhaul of parastatal management and the streamlining of the civil service. 


James Michel and the newly-dubbed Parti Lepep (People’s Party) tend to absorb all of the oxygen in the political atmosphere, leaving little for long-time opponent Wavel Ramkalawan and the Seychelles National Party (SNP). In June, Michel fully stepped out of the shadow of former President France Albert René, who stepped down as president of the Seychelles People’s Progressive Front, prompting Michel to rename it and to begin enticing SNP heavyweights to switch sides in exchange for jobs in state enterprises. The opposition is at a loss to offer alternatives to cooperation with the IMF, and SNP backers fear that this could lead to Ramkalawan’s fifth consecutive electoral loss. 


The IMF predicts that GDP will contract by 8.7% in 2009, recovering to positive territory in 2010 at 4%. That may suit Michel’s electoral timing, but people are unlikely to feel the impact of the turnaround very quickly. Inflation is due to level out at 33.4% for 2009 and will drop to single digits for 2010, at about 4%. 


Government spending is also limited by a heavy foreign-debt load, and President Michel has not made as much progress as he would have liked. With about $800m in foreign public and commercial debt, the Seychelles is not only one of Africa’s richest but also one its most indebted countries on a per capita basis. Michel has called for half of the debt to be cancelled. In April, the Paris Club agreed to a $70m cancellation, and others may follow as negotiations continue. 


The economy is dependent on two main sources of income: tuna and tourism. In May, after a series of pirate attacks near the Seychelles, the government requested international support. India quickly dispatched reinforcements. The number of attacks has declined and fishing activity is on the rise after hauls on European trawlers were reduced by as much as half. The tourism industry, which accounts for one third of GDP, was set to fall between 15-25% in 2009. In April, popular opposition led to the cancellation of plans for a resort facility due to concerns about land and food security. 


Parti Lepep’s election chances could depend on a turnaround in visitor numbers, as 30% of the population is employed in tourism-related jobs and unemployment has risen to a record 3.6%. Most investors are looking forward to a quick end to the tourism drought; the Four Seasons opened a new resort in February while Indian investors were in talks in July to lease the island of Coëtivy for a huge integrated tourism development. 


Two new industries hold promise for economic growth in the future: oil and offshore financial services. President Michel and the Seychelles Petroleum Company are playing up the potential for huge oil reserves in unexplored waters, as virgin territories for exploration disappear globally. A mapping exercise was completed in June, with an eye to a licensing round sometime in 2010, but the oil majors may stay away, leaving the minnows to take their chances.

Seychelles's Top Companies

No companies from the Seychelles featured in The Africa's Report's Top 500 Companies in Africa 2009. 

Seychelles's Top Banks

No banks from the Seychelles featured in The Africa's Report's Top 200 Banks in Africa 2008. 

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