Debt vs GDP / Bonds vs bills

All Data - Seychelles

Year 2012 2013 2014 2015 2016 2017
GDP (billions US$) 1.13 1.41 1.45 - - -
Total Outstanding Amount (Billion US$) 0.19 0.21 - - - -
Bonds - - - - - -
Bills 0.19 0.21 - - - -
Outstanding Amount/GDP (%) 16.66% 14.97% 0.00% - - -

Country Summary

In July 2015 Seychelles reached high-income status, after average gross national income (GNI) per capita reached USD 13 710 in 2013-14. The government has implemented sound macroeconomic policies and comprehensive structural reforms in recent years, which have supported robust economic growth, averaging 5.3% during 2011-15, driven primarily by tourism and information and communication technology (ICT). Growth rates nonetheless registered an overall downward trend from about 7.9% in 2011 to an estimated 4.6% in 2015, mainly because of decelerating growth in construction, as several large projects ended in those years. Seychelles’ medium-term growth outlook is moderate, with gross domestic product (GDP) projected to grow at 3.1% in 2016 and 3.7% in 2017. The traditional tourism and fisheries sectors are expected to remain the main drivers of growth. Prudent fiscal and monetary policies have helped consolidate macroeconomic stability, and inflation is expected to remain below 3% in 2016 and 2017.

Seychelles continues to face a number of challenges. The country suffers from insufficient economic diversification and vulnerability to external shocks, given the dependence of its economy on tourism and fisheries. The development of the private sector is therefore paramount in achieving a more diversified economy, reducing vulnerability and shielding the country from shocks. However, the private sector requires a more enabling environment to exploit its potential fully and expand into new business areas. Furthermore, growth needs to be made greener to protect Seychelles’ fragile natural environment better against the adverse impacts of climate change.

To promote the socio-economic development of the country, the government adopted the National Development Strategy (NDS) 2015-19 in November 2015, with the concept of the “Blue Economy” as its centrepiece. The concept emphasises the economic potential of Seychelles’ vast Exclusive Economic Zone (EEZ), a marine area of 1 374 000 km2 (the second largest in Africa), for inclusive growth. This innovative concept integrates conservation and sustainable use of ocean resources, oil and mineral wealth extraction, bio-prospecting, sustainable energy production and marine transport, as well as branding Seychelles a “blue” tourism destination. The NDS 2015-19 focuses on four “key results areas”: governance, economic development, social development, and environment and energy.

Seychelles is a small island developing state (SIDS), with high income inequality: the 2006/07 household survey measured the Gini coefficient of income inequality at 65.8. Poverty levels are, however, very low with only 0.25% of the population living on USD 1.25 or less per day in 2007. Around 90% of the 94 000 inhabitants live on Mahé, one of three main islands. However, with its limited land space and high population density, the country needs to observe a delicate balance in addressing land use, conservation and economic development. The country has begun to design policies and plans to address these issues holistically.

Source : African Economic Outlook 2016

Monetary policy & Public debt

Since 2008, the Central Bank of Seychelles is using a monetary and flexible targeting framework. The new framework was implemented as a consequence of the macroeconomic challenges the country faced over the last decade: a public debt level the size of the entire GDP, inflation rates reaching 60% and fiscal deficits. These macroeconomic imbalances led Seychelles to default on its sovereign foreign debt in 2008. This economic situation prompted an IMF intervention; an Extended Credit Facility was extended to Seychelles for two years.

As a result of these macroeconomic reforms, Seychelles public debt was reduced to 81%, down from the 151% level in 2008. The Public Debt Management Act, which was passed in 2008, was amended in 2012 so as to allow issuance of Treasury securities for monetary policy purposes. In 2014, liquidity surged in Seychelles financial markets, prompting the Central Bank to issue for the first time medium-term bonds; in addition, the Central Bank took measures such as fixing rates on key instruments (Deposit Auction Arrangement, the Standing Credit Facility, Standing Deposit Facility).

Market Structure

Market participants


The Central Bank of Seychelles (CBS) issues debt securities on behalf of the government; the Development Bank of Seychelles (DBS) is also an issuer: on January 27th, 2014, it issued a 2-year bond that was fully subscribed. 

Investor base

Commercial banks held more than 85% of Treasury securities in 2011 (Rs 1 billion, CBS). Other financial and non-financial investors have recently seen their share of market increase.

Instruments issued

Treasury Bills

Treasury bills have maturities of 91-, 182- and 365-days. After amendments of the Public Debt Management Act to allow issuance of Treasury securities for monetary policy purposes, Treasury bills started being issued twice a week.

In 2011, the outstanding market value of Treasury securities was Rs.394 million.

Treasury Bonds

Treasury bonds have maturities of 3-, 5- and 7-year. After the unstable economic situation in 2008-2009, the Central Bank stopped issuing Treasury bonds; in particular as short-term rates hit 30% in 2009. The Development Bank of Seychelles is the only para-statal institution to have issued a bond in 2010.

Average time to maturity and yield to maturity

There is higher demand for short-term Treasury bills on the Seychelles market. 

In 2012, the Central Bank issued more Treasury securities, bringing a rise in the interest rates across all instruments. The 91-d bill rate increased from 4.97% in 2011 to 8.47% in 2012; similarly, the 182-d bill rate increased from 5.59% to 8.6% in the same period and the 364-d bill rate rose from 6.79% to 8.85%.

Primary Market and Secondary Market

Primary market  

Depending on the government's financial requirements Treasury bills can be issued either on a tap or tender basis. The auctions are announced two months in advance.

The minimum bid size for all securities (Treasury bills and bonds alike) is Rs 5,000; any additional amounts must be in multiples of Rs 5,000.

For competitive bids, the CBS allocates Treasury Bonds beginning with the lowest bid and carrying it until all competitive bids have been fully allocated. The price defined by the competitive bids is the one applied in non-competitive offers.

Secondary market  

OTV vs. Exchange traded

There is no secondary activity and all investors, wholesale or retail, bid directly at the Central Bank.

Any capital markets activity is regulated by the Seychelles International Business Authority.

Clearing, settlement and custody

The clearing and settlement process is handled by the CBS which also acts at the custodian of all issued government 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