International Trade in the Seychelles

News Related to International Trade in the Seychelles

Business outline for the Seychelles

Economic Overview

After having dropped heavily under the effects of the global recession (which provoked a massive reduction in public consumption, tourism income, tuna exports and the situation was aggravated by the rise in oil prices and food products), the growth has rebounded in 2010 thanks to the global revival, the booming of the tourism sector and the financial aid from the IMF (a growth of 4% against -1.3% in 2008).  This acceleration should strengthen in 2011. 

After having canceled the confirmation agreement signed in 2008, the government negotiated an extended fund facility (EFF) with the IMF in December 2009. This program in mid-term emphasizes fiscal, public administration and public sector reforms, its objective is to consolidate the country's economic stability and to guarantee a long-term growth. 

Seychelles is classified as an upper-middle income country. Currently, it benefits from the highest rate of alphabetization in Africa and the best health care system of the continent. Under the effects of the recession, the unemployment rate, which was very low, has strongly increased to attain 5% in 2010.

FDI in Figures

Under the effects of the global economic slowdown, Seychelles experienced a decrease of FDI flows in 2009, but they started to increase again after the revival, a trend that should continue.

The government of Seychelles has taken the regulatory measures that are needed to create a suitable environment to foreign investments. But some factors are discouraging to FDI, such as the black market economy, limited export opportunities and the fluctuations in the traffic of tourism.

The fishing sector (smoked tuna, frozen fish) attracts most of the FDI and the country's main trade partners are the Great Britain, France and Spain.

Foreign Trade Overview

Seychelles is quite open to trade. As a fact, the country's foreign trade policy aims at promoting an interdependent trade regime, taking into consideration the interests and fundamental values of the country.  Seychelles is a member of COMESA (The Common Market of East and South Africa) and has started negotiations with the WTO in 2007. 

Customs duties still remain comparatively high in Seychelles. In spite that the country does not have any major trade barriers, the lack of infrastructures and skilled manpower are some of its obstacles to trade.  The government of the archipelago has taken many initiatives to encourage foreign trade such as tax incentives for the tourism industry, corporate tax reductions for farmers and fishermen and the rationalization of customs procedures at the ports. 

Seychelles imports much more than what it exports, which created a colossal trade deficit in 2008, it was slightly reduced since the drop in imports and the revival of exports. It is estimated that its trade balance will remain in the red during the next few years.

Its main trading partners are the European Union, Saudi Arabia and Mauritius.