The African Development Bank is working on a financial facility to support Seychelles in its COVID-19 recovery programme according to a top official of the bank.
During a courtesy call on President Wavel Ramkalawan at State House today April 7, The executive director of AfDB, Cheptoo Amos Kipronoh, said that Seychelles the bank will support the government to heal the economy of its country.
“The facility will try and help Seychelles fully in the recuperation of its economy. I am seeing that the recovery process is going very well and the country has been able to vaccinate 60 percent of its population,” said Amos Kipronoh.
“We are also seeing that the hotel businesses are also recovering and the bed occupancy is now very high. So we are working closely with the government to ensure a strong recovery process so that the economy becomes more resilient,” he added.
The economic and social shock from COVID-19 (coronavirus) on the Seychellois economy has been severe. Economic growth declined significantly in 2020 to -13.5% from 3.9% in 2019 due to the significant disruptions in economic activities in Seychelles, driven by lower tourism activities which declined by more than 60%.
In addition, the fiscal deficit widened to 22.6% of gross domestic product (GDP) in 2020 on account of lower revenues and higher COVID-19-related spending and is projected to be 15.3% in 2021.
The recovery process has been gradual beginning this year with a resumption of tourism and related capital flows. If unmitigated, the poor are expected to bear a disproportionate impact of the economic shock. According to the 2013 household survey, about six out of 10 poor individual have a job, mostly in informal activities in the service sector that are expected to experience significant declines.
Seychelles which lies northeast of Madagascar, an archipelago of 115 islands with almost 98,000 citizens depends on Tourism as the major pillar of economy but since the emergence of Covid-19 tourists operations in the country was halted as many countries imposed measures some lockdown..
Amos Kipronoh’s meeting with President Ramkalawan was also organised to give an update on the current relationship between AfDB and Seychelles.
“I have had extensive discussions with the Ministry of Finance and it has given assurance that the relationship between the bank and Seychelles is very strong and would remain that way,” added the AfDB executive director.
Last year, Seychelles received a loan of $10 million from (AfDB) to support the government’s COVID-19 response programme. The loan is being used for macroeconomic stabilisation, strengthening the national health responses to the Covid-10 pandemic, as well as safeguarding livelihoods and social safety nets of the island nation.
The crisis response programme is aligned with ADB’s 10-year strategy and its five areas of high priorities, specifically to improve the quality of life of people in Africa.
As part of his mission in Seychelles, Amos Kipronoh will also visit projects that have been funded by the bank and ministries that have benefited from resources and other forms of support from the bank.
In April and May last year, Seychelles was also assisted by the World Bank and the International Monetary Fund in the form of a line of credit and emergency assistance totalling $38 million.
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 the importance to focus on greater productivity, participation and performance of its economy as means to increasing shared prosperity.