Economy - in greater depth:
The economy rests on tourism and fishing. Presently, tourism accounts for about 12.7% of the GDP and the manufacturing and construction sectors (including industrial fishing) account for about 28.8%. In 2000, industrial fishing surpassed tourism as the most important foreign exchange earner.
Tourism is one of the most important sectors of the economy, accounting for approximately 16.6% (2000) of GDP. Employment, foreign earnings, construction, banking, and commerce are all dominated by tourism-related industries. Tourism earned $631 million in 1999-2000. About 130,046 tourists visited Seychelles in 2000, 80.1% of them from Europe (United Kingdom, Italy, France, Germany, Switzerland).
Industrial fishing in Seychelles, notably tuna fishing, is rapidly becoming a significant factor in the economy. Earnings are growing annually from licensing fees paid by foreign trawlers fishing in Seychelles' territorial waters. In 1995, Seychelles saw the privatization of the Seychelles Tuna Canning Factory, 60% of which was purchased by the American food company Heinz. Similarly, some port operations have been privatized, a trend that has been accompanied by a fall in transshipment fees and an increase in efficiency. Overall, this has sparked a recovery in port services following a drastic fall in 1994.
While the tourism and industrial fishing industries were on a roll in the late 1990s, the traditional plantation economy atrophied. Cinnamon barks and copra -- traditional export crops -- dwindled to negligible amounts by 1991. There were no exports of copra in 1996; 318 tons of cinnamon bark was exported in 1996, reflecting a decrease of 35% in cinnamon bark exports from 1995.
Despite attempts to improve its agricultural base and emphasize locally manufactured products and indigenous materials, Seychelles continues to import 90% of what it consumes. The exceptions are some fruits and vegetables, fish, poultry, pork, beer, cigarettes, paint, and a few locally made plastic items. Imports of all kind are controlled by the Seychelles Marketing Board (SMB), a government parastatal which operates all the major supermarkets and is the distributor and licensor of most other imports.
In an effort to increase agricultural self-sufficiency, Seychelles has undertaken steps to make the sector more productive and to provide incentives to farmers. Much of the state holdings in the agricultural sector have been privatized, while the role of the government has been reduced to conducting research and providing infrastructure.
Many of the other industrial activities are limited to small scale manufacturing, particularly agro-processing and import substitution. Agriculture (including artisanal and forestry), once the backbone of the economy, now accounts for only around 3% of the GDP. The public sector, comprising the government and state-owned enterprises, dominates the economy in terms of employment and gross revenue. It employs two-thirds of the labor force. Public consumption absorbs over one-third of the GDP.
The country’s economy is extremely vulnerable to external shocks. Not only does it depend on tourism, but it imports over 90% of its total primary and secondary production inputs. Any decline in tourism quickly translates into a fall in GDP, a decline in foreign exchange receipts, and budgetary difficulties. Furthermore, recent changes in the climate have greatly affected the tuna industry.
The Ministry of Finance is responsible for economic decisions and budgetary policy. A separate Monetary Authority supervises the banking system and manages the money supply. Although foreign banks operate branches in Seychelles, the government owns the two local banks -- the Development Bank of Seychelles, which mobilizes resources to fund development programs, and the Seychelles Saving Bank, a bank for savings and current accounts. The commercial banking sector is presently made up of the following:
The first four are branches of foreign banks and the latter is a joint venture between the Seychelles government and the Standard Chartered Bank African PLC. Commercial banks offer the full range of services.
1. Oil-prone Source Rocks containing Type II kerogen in coaly deltaic shales of the Middle Jurassic and in marine shales of the Upper Jurassic;
2. Mixed source rocks bearing Type II/III kerogen in deltaic marine shales of the Lower Cretaceous that are II correlative of oil-generating shales in Somalia;
3. Gas-prone sources containing Type I kerogen in Upper Triassic fluvial shales and Paleocene marine shales, the latter being correlative of oil and gas generating source rocks of the Deep Continental Shelf trend of the Bombay High Oil Province offshore west India;
4. Evidence of hydrocarbon generation and migration with well shows, such as 0.7 ml benzene in DST-1 of Reith Bank-1, 10,010 ppm of 99.8% n-C4 headspace gas coincident with as small fault in the same well and 20% petrol vapours at an immature level of volcanics in Owen Bank A-1;
5. Clastic reservoirs with measured porosities up to 22% in the Early-Middle Jurassic; and
6. Sealing lithologies both locally in syn-rift, and regionally in post-rift sequences. An extensive seismic dataset, plus a variety of remote sensing data have been collected which bolster the well data by confirming the presence of:
7. A variety of trapping styles, dominated by tilted fault blocks, stratigraphic pinchouts and reefs;
8. Multiple heating events, with the principal event post-dating trap formation; and
9. Hydrocarbon generation and migration with the presence of: a) numerous DHIs on seismic, including gas chimneys, flat spots, bright spots, phase changes and chemosynthetic reefs; b) gas sniffer anomalies, involving ethane/iso-butane in the southeast and propane/normal butane/total hydrocarbon in the north and northeast; c) UV fluorescence anomalies, especially over the wells and in the southeast; and d) 4 types of beach-stranded tar that correlate to the local source rock stratigraphy.
However, to date all exploratory and stratigraphic test wells (a total of 9 since the 1970s) in the Seychelles have failed to find commercial hydrocarbons. The most recent wildcat by Enterprise Oil in 1995 detected gas but failed to find hydrocarbons
In addition to the now booming tourism and building/real estate markets, Seychelles has renewed its commitment to developing its financial services sector. Government officials and industry participants believe this could overtake the tourism industry as the chief pillar of the economy by 2017. Indeed, the popularity of Seychelles in the offshore world is growing immensely with the sector setting records each of the last 4 years in a row. The recent passage of a revised Mutual Fund Act 2007, Securities Act 2007 and Insurance Act 2007 are meant to be the catalysts to move Seychelles from just another offshore jurisdiction to a full fledged Offshore Financial Center (OFC).
The Seychelles International Business Authority (SIBA) is charged with overseeing the quickly growing offshore industry. Seychelles is home to a number of offshore incorporation specialists including firms like Sterling Offshore Ltd., a Seychelles based firm of legal and business consultants specialising in offshore company formation, mutual funds, hedge funds and captive insurance.
GDP - real growth rate: -1% (2006 est.)
GDP - per capita: purchasing power parity - $7 800 (2002 est.)
GDP - composition by sector:
services: 66,4% (2005 estimate)
Population below poverty line: NA%
Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%
Inflation rate (consumer prices): 3% (1999)
Labor force: 26,000 (1996)
Labor force - by occupation: industry 19%, services 57%, government 14%, fishing, agriculture, and forestry 10% (1989)
Unemployment rate: NA%
revenues: $343,3 million
expenditures: $332,2 million, including capital expenditures of $36 million (1994 est.)
Industrial production growth rate: NA%
Electricity - production: 241,3 million kWh (2003)
Electricity - production by source:
fossil fuel: 100%
other: 0% (1998)
Electricity - consumption: 224,4 million kWh (2003)
Electricity - exports: 0 kWh (2003)
Electricity - imports: 0 kWh (2003)
Exports: $312,1 million (f.o.b., 1998)
Imports: $459,9 million (c.i.f., 2005)
Imports - commodities: machinery and equipment, foodstuffs, petroleum products
Debt - external: $276,8 million (2005 est.)
Economic aid - recipient: $16,4 million (1995)
Currency: 1 Seychelles rupee (SRe) = 100 cents
Exchange rates: Seychelles rupees (SRe) per US$1 - 5.77 (February 2007), 5.5 (2005), 5.3060 (September 1999), 5.2622 (1998), 5.0263 (1997), 4.9700 (1996), 4.7620 (1995)
Fiscal year: calendar year