Seychelles Country Report

Seychelles' political landscape has traditionally been dominated by the Parti Lepep (PL), now led by President Danny Faure, who took over from James Michel following his resignation in 2016 after the PL lost its parliamentary majority to the Linyon Demokratik Seselwa (LDS) opposition coalition. Presidential elections, due in December 2020, are likely to be close-run between the PL and LDS candidates, but modest fundamental policy differences between the main parties assists policy stability. Social unrest is rare although peaceful demonstrations are likely in the run-up to the presidential elections. The government has acknowledged an increase in crime rates, particularly on the main island of Mahé, and reacted quickly by setting up a National Intelligence Agency in December 2018, which is likely to mitigate the main risks of financial crime and illegal fishing. Petty crime is likely on the islands of Mahé and Praslin, although levels are low compared to other African countries. Seychelles continues to improve its overall business environment, as shown by the gains made in the World Bank Doing Business rankings. Tourism, fisheries, and offshore financial activities are the main stimulants of growth. However, the economy’s high dependence on tourism for foreign exchange earnings leaves the external account vulnerable to developments in major tourist markets, such as the European Union and, increasingly, China. The country’s lack of resources and land as well as its physical remoteness will continue to constrain Seychelles’ growth prospects. New offshore hydrocarbon discoveries could turn Seychelles into one of Africa’s most important oil hubs in the coming years and boost its economic diversification. The government has offered tenders for offshore deepwater blocks for oil exploration along the Seychelles-Mascarene Ridge Basin, and has signed production agreements with two oil companies, PetroQuest International and East African Exploration. Exploration will likely be tightly regulated in keeping with Seychelles’ ‘blue economy’ water resources sustainability.