The African Development Bank has approved a $34 million policy-based loan to Seychelles to support reforms aimed at strengthening public services, improving the business environment and building greater climate resilience.
The financing, approved on 22 September, supports the third and final phase of the Economic Resilience and Green Recovery Support Programme. The African Development Bank provided $25 million for each of the first two phases in 2024 and 2025, bringing its total financing across the three phases to $84 million.
According to the African Development Bank, the latest phase is designed around three areas: economic governance and public financial management, private-sector development and climate resilience.
Digital tools at the centre of public-sector reform
A significant part of the programme involves digitising government processes. Planned measures include electronic invoicing to strengthen tax compliance, a national e-procurement system and a one-stop investment portal intended to make it easier for businesses and investors to interact with the state.
The reforms also include a Government Business Service Centre designed to consolidate services for businesses. For a small island economy, reducing administrative friction can be particularly important because firms operate within a limited domestic market and often face comparatively high transaction and logistics costs.
The programme therefore illustrates how digital government can form part of a wider economic reform strategy rather than functioning solely as a technology initiative.
Building on earlier reforms
The Bank says previous phases have already produced measurable changes. Business and other tax revenues increased from 6.4% of GDP in 2023 to 8.2% in 2025, while private-sector credit growth reached 12.1% in 2024.
Those figures are relevant because Seychelles, like many African economies, must balance the need for public investment with the constraints of a relatively small domestic financing base.
The Bank’s 2026 economic outlook for Seychelles projects real GDP growth of 3.1% in 2026 and 3.4% in 2027, supported by tourism and domestic demand. It also identifies shallow capital markets, external financing costs and climate shocks among the country’s structural constraints.
Climate resilience and the business environment
The final programme phase extends beyond fiscal administration. Measures include electricity-sector planning, marine spatial planning and reforms related to employment and a phased national living-wage framework.
For Seychelles, the connection between economic policy and climate resilience is particularly direct. Tourism, fisheries, coastal infrastructure and energy costs are all exposed to environmental and external shocks, meaning climate policy can have immediate consequences for public finances and private investment.
The country has previously used instruments including a sovereign blue bond to mobilise finance linked to ocean sustainability. The African Development Bank has also identified opportunities for Seychelles to deepen domestic capital markets and expand access to green and diaspora finance.
A small-state reform test
The $34 million facility is policy-based financing rather than funding for a single infrastructure project. Its significance therefore depends on whether the reforms it supports translate into stronger institutions, easier investment processes and greater resilience over time.
That makes Seychelles a useful case study for other small African economies. Digital public services, stronger procurement systems and investment facilitation do not remove structural constraints such as small market size or exposure to external shocks. They can, however, reduce the cost of doing business and improve the state’s ability to mobilise and manage resources.
For Seychelles, the final phase of the programme will test whether the gains recorded in revenue mobilisation and private-sector credit can be consolidated while climate and economic vulnerabilities remain firmly on the policy agenda.
References
- African Development Bank: $34 million loan for Seychelles public services, private-sector growth and climate resilience
- African Development Bank: Seychelles Economic Outlook
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