The Republic of Seychelles has the highest gross domestic product (GDP) per capita in Africa, at nearly $17 billion in 2019. Being a small middle-income island country, Seychelles does not have spatial exclusion issues similar to those of other African countries. Around 75% of the 98 000 inhabitants live on Mahe, one of the three main islands. However, with its limited land space and high population density, the country has a delicate balance to observe in addressing land use, conservation and economic development. Inequality is significant.

Following the economic crisis and resulting sovereign debt default in 2008, the Republic of Seychelles through a prudent reform program made significant progress in achieving economic stability and fiscal sustainability. The Seychelles economy grew by an average rate of 4.2% per annum between 2009 and 2019. Tourism, the main driver of growth, accounts for approximately 30% of GDP. The economic shock from COVID-19 on the Seychellois economy is harsh, but recovery is expected to begin in 2021 with a projected increase of 4.7%. According to the 2013 household survey, about 6 out of 10 poor individual have a job, mostly in informal activities in the service sector that are expected to experience significant declines.

While the immediate priority is the containment of COVID-19 and recovery from its economic and social impact on the country, a focus on longer term structural issues is also warranted for a strong and resilient recovery. Among Seychelles’ development challenges is focus on greater productivity, participation and performance of its economy as means to increasing shared prosperity. Some of the main institutional challenges in this regard are notably barriers to open and operate businesses, scope for a more strategic and sustainable approach to social protection, as well as the need to broaden access to quality education and skills development. Climate change adaptation, including through strengthened disaster preparedness systems and enhanced coastal management, is also essential.