Country Summary

Economic performance and outlook:  Overall economic performance has been remarkable, especially over the past decade, albeit with a few setbacks. The 5.9% real GDP growth in 2016 was driven primarily by tourism and fisheries. These sectors also contributed considerably to foreign exchange earnings, employment, and growth in auxiliary sectors. The medium-term growth outlook is favourable. GDP growth was estimated at 4% in 2017 and is projected to be 3.4% in 2018, resulting in a continued increase in real GDP per capita; the traditional tourism and fisheries sectors are expected to remain the main growth drivers. Inflation was –1% in 2016, due to lower than anticipated prices of oil and other imports, as well as tight monetary policy. 

Macroeconomic evolution: Inflation is expected to remain low, although rising international fuel prices since late 2016 and the government’s expansionary fiscal measures in 2017 could trigger inflationary pressures. The increase in current expenditure (which rose from 26.9% of GDP in 2014 to an estimated 33.5% in 2017) was partially offset by a corresponding increase in total revenue (from 34.5% of GDP in 2015 to an estimated 39.5% in 2017) and the continued tight monetary policy. Lower than budgeted capital outlays and strong tax revenue growth helped increase the 2016 budget surplus to almost 1% of GDP. The budget position remained in surplus in 2017 but is projected to decline to a small deficit in 2018 and 2019. The government is mindful of its debt management policy and commitment to reduce the debt-to-GDP ratio from its present 64% to less than 50% by 2020. Fiscal discipline, coupled with effective debt restructuring in the wake of the 2008 financial crisis, have supported the debt reduction strategy. Gross official reserves in 2016 and 2017 were equivalent to around 4 months of imports. 

Tailwinds: Foreign direct investment (FDI) continued to be strong, notably in the hospitality sector, helping finance the current account deficit and build up international reserves. Continued vibrant tourist arrivals and higher revenue from tourism (which saw almost 20% growth in mid-2017 from one year before), have been key drivers of economic growth. Domestic private investment is increasingly important, notably in growing small- and medium-size enterprises. The sustainability of this source of growth depends on the extent to which challenges in access to finance and a skilled labor force are addressed. The government is paving the way for private sector–led growth by promoting FDI and improving the business environment for local investors. Public investment is expected to increase in 2018–19 as the government continues its infrastructural development program. The reintroduction of the Unemployment Relief Scheme in 2017 is likely to increase employment. 

Headwinds: Growth rates in 2017 and 2018 are expected to be slightly lower than in 2016, due largely to risks associated with the external sector. These risks include vulnerability to developments in Europe—the origin of most tourists—including Brexit and rising international fuel prices since late 2016 that could put pressure on inflation and the balance of payments. Domestically, a slowdown in the construction sector is expected to hinder growth. There is need for continued focus on economic diversification, structural transformation, and regional integration to deal with major challenges, notably a small domestic economy, geographical remoteness, high transportation costs, insufficient skilled labour, and vulnerability to external shocks.

Source: African Economic Outlook 2018

Fixed Income


  • Seychelles is 10th in the ABMDI 2017 Ranking Report. 
  • Debt issuance is mainly for monetary purposes. 
  • The government of Seychelles mainly uses Treasury bills for its debt issuance purposes. 

Issuance strategy 

Debt issuance is mainly for monetary purposes. Although the short-term plan is to reduce the share of domestic debt in the total debt portfolio, the Medium-Term Debt Strategy indicates that a lengthening of the maturity profile of the domestic debt portfolio is preferred, while the development of the domestic securities market is a stated objective of the plan. 

Benchmark issues 

The government of Seychelles does not have benchmarks in its issues. 

Yield curve 

There is no benchmark yield curve in Seychelles. 

Challenges in building an efficient yield curve 

  • Lack of issuance strategy: government bond issuance is infrequent. Whenever there is an issuance, it is on a tap basis. 
  • Illiquid and limited secondary market: most investors buy and hold securities.

Guide to Buying Bonds

Procedures for market participation

Application forms (for 91-d, 182-d, 365-d)  and prospectus may be obtained at the Public Debt Section of the Central Bank of Seychelles between 8.30am and 12-noon. Tenders are placed by filling a tender form and should be deposited in the tender box at the Central Bank before the closing date specified in the notice.

Auction results are made available the same day to applicants whose Tenders have been accepted in whole or in part.  The Bills are payable 91-days, 182-days and 365-days after the date of issue, which will be three working days.  The Average Tender Rate will be published on the Central Bank website on the auction date. Detailed instructions on how to purchase Treasury securities is available here. 

Settlement cycle

All securities settle on a T+3 basis.


Interest income on fixed-income instruments are taxed at a rate of 5% for residents and 15% for non-residents.

There is no capital gains tax in Seychelles; moreover Seychelles enjoys double taxation agreements with the following countries: Bahrain, Barbados, Botswana, China, Cyprus, Indonesia, Malaysia, Mauritius, Oman, Qatar, South Africa, Thailand, United Arab Emirates, Vietnam, Zambia and Monaco. 

Market restrictions

Openness to international investors 

Foreign investors need not get approval to invest in the capital markets. Bonds can be purchased by any individual; in the case of a body of persons, they should be incorporated or registered under the laws of their country of domicile.

To encourage investments in the country, the Seychelles has instituted an investment bureau and board, the Seychelles Investment Board (SIB). A new investment code was also enacted in 2005.

Capital controls 

The implementation of macroeconomic reforms in 2008 was accompanied with the removal of capital controls.

Restrictions on foreign exchange and profit repatriation

The Central Bank Act of 2004 was amended in a session of the National Assembly on October 31, 2008 removing the Bank’s control of the exchange rate. A new exchange rate system was then implemented; the rupee now operates under a free floating regime.

There are no restrictions on repatriation and conversion of foreign exchange, investment income.

Credit rating

In October 2013, Fitch assigned a rating of B+ on the long-term local currency debt of Seychelles, on the outlook of the progress made after the implementation of the IMF reforms in 2008.

List of Primary Dealers