WASHINGTON, August 2, 2017 – The World Bank has issued its first Systematic Country Diagnostic on the Seychelles, Africa’s only high-income economy. Its findings will inform the Bank’s operational work in the country and contribute to its public debate on the new, national development planning process.
Seychelles’ economic performance has been strong, both over the long-term and recently, and employment rates are high. However, as this analysis shows, growth has been driven mainly by factor accumulation. The challenge now for Seychelles is to sustain growth by raising productivity.
“While absolute poverty levels in the Seychelles are low, inequality is significant,” said Alex Sienaert, Senior Country Economist, and the report’s main author. “Increasing the direct participation of Seychellois in a skills-intensive, sophisticated economy is the main challenge in terms of the country’s social sector.”
The report indicates the need for a development model that fosters strong economic inclusion. In the Seychelles, the labor market is rewarding workers with technical and job-relevant skills, which are in scarce supply. The pressure is now on for the education system to equip graduates with the right tools to reap the benefits of the opportunities offered by the Seychelles’ increasingly sophisticated economy.
Social spending, already at generous levels, also needs to be better targeted to shore up the its sustainability, boost its impact on protecting the vulnerable, and enable more Seychellois to get high quality jobs.
The report also suggests that state performance is another of the key challenges facing the Seychelles today. A high-performing economy requires a public sector that is efficient enough to deliver good quality public services, agile enough to respond to emerging priorities, and small enough not to divert scarce financial and human resources away from the private sector.
The Seychelles has already made much progress on this front but can build on it further to position the government and state-owned enterprises to support a high-performing, high-participation economy.
The report’s preparation included consultations with relevant stakeholders.
