Seychelles secures $25m loan to improve tax revenues, economic reforms

The African Development Bank Group (AfDB) has approved a $25 million loan to Seychelles to implement the first phase of the Economic Resilience and Green Recovery Support Programme.

The programme is aimed at economic governance management across the archipelago. According to a statement, the operation, the first in a series of programmes scheduled for 2024, 2025 and 2026 is aimed at supporting Seychelles to improve tax revenues and enhance governance in the public sector, including efficiency of public spending and public service delivery as key pathways to advance governance and economic management reforms.

The loan will also support current efforts of the Seychelles' ministry of Investment, Entrepreneurship and Industry to drive economic diversification and transformation in the key sectors of fishing and tourism. These initiatives include the revision of relevant legislative frameworks to promote growth of the private sector, supporting the recently approved industrial policy.

The programme will also help the Seychelles authorities to deepen reforms that promote environment and climate resilience, assisting the government's efforts to integrate climate adaptation and mitigation into the National Development Strategy for 2024-2028.

The government is also implementing measures to improve the health of the country's financial system so that it can do more to support real sector growth. Specifically, the new programme will support efforts by the authorities to introduce a licensing regime for the virtual asset sector.

The overall aim of the program is to contribute to Seychelles' medium-term objectives of improving access to renewable energy, enhancing inclusive growth, and creating jobs, while leaving room for manoeuvre in the budget sphere and promoting debt sustainability. This will enable the government to allocate resources to priority projects and programs while protecting more vulnerable social groups.

As of 1 July 2024, the AfDB's approved and ongoing portfolio in Seychelles comprises seven operations for a total commitment of $33.7 million.