AfDB Approves $25M Loan to Support Seychelles' Economic Resilience and Green Recovery

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

The Board of Directors of the African Development Bank Group (AfDB) has approved a $25 million loan to Seychelles for the first phase of the Economic Resilience and Green Recovery Support Programme. This initiative is designed to strengthen economic governance management across the archipelago and is part of a broader series of programmes slated for implementation in 2024, 2025, and 2026.

Objectives of the Programme

The primary goals of this operation are to assist the Seychelles authorities in:

Improving Tax Revenues: The programme aims to enhance tax mobilization efforts, providing critical funds for investments in circular economy projects.

Enhancing Public Sector Governance: It will focus on increasing the efficiency of public spending and service delivery, which are vital for advancing governance and economic management reforms.

Driving Economic Diversification: Support will be given to the Seychelles Ministry of Investment, Entrepreneurship, and Industry to foster economic transformation, particularly in the key sectors of fishing and tourism. This includes revising legislative frameworks to promote private sector growth and supporting a recently approved industrial policy.

Climate Resilience and Financial Sector Improvements

The programme will also facilitate deeper reforms aimed at promoting environmental sustainability and climate resilience. It seeks to assist the government in integrating climate adaptation and mitigation strategies into the National Development Strategy for 2024-2028.

In addition to environmental goals, the government is focused on enhancing the health of Seychelles’ financial system to better support real sector growth. Specifically, the new programme will back efforts to introduce a licensing regime for the virtual asset sector, which is expected to attract new investments and stimulate economic activity.

Medium-Term Economic Goals

Overall, the programme aims to contribute to Seychelles' medium-term objectives by:

Improving Access to Renewable Energy: By promoting sustainable energy solutions, the government hopes to transition towards a greener economy.

Enhancing Inclusive Growth: The programme aims to create jobs while ensuring that vulnerable social groups are protected.

Promoting Debt Sustainability: By allowing the government to allocate resources efficiently, the programme will help maintain fiscal space for priority projects and initiatives.

As of July 1, 2024, the AfDB’s approved and ongoing portfolio in Seychelles consists of seven operations with a total commitment of $33.7 million. The approval of this loan is a significant step towards bolstering Seychelles’ economic resilience and supporting its journey towards sustainable development.