Seychelles Receives $10M Loan From AfDB To Re-Open Economy

  • African Development Bank(AfDB) has approved a $10 million loan to help the Republic of Seychelles mitigate the economic impact of COVID-19 outbreak in the country.
  • The COVID-19 pandemic has halted the country’s tourism sector – the main pillar of the island nation’s economy – being the worst affected of all major economic sectors globally.
  • The loan will be used to fund the country’s health and social response, support macro-economic stability, as well as safeguarding livelihoods and social safety nets.

African Development Bank (AfDB) has approved a $10 million loan to help the Republic of Seychelles re-open her economy and mitigate the economic impact of COVID-19 outbreak in the country.

The loan, which as approved on Monday in Abidjan, Cote d’Ivoire, will be used to fund the country’s health and social response, support macro-economic stability, as well as safeguarding livelihoods and social safety nets.

As of 14 March, Seychelles recorded its first case of COVID-19 and had 11 confirmed cases, all of which have fully recovered with no new cases or deaths. However, the COVID-19 pandemic has halted the country’s tourism sector – the main pillar of the island nation’s economy – being the worst affected of all major economic sectors globally.

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The acting Director-General for AfDB East Africa Regional Office, Nnenna Nwabufo, said in a statement released on Tuesday that, “the economic consequences of the COVID-19 pandemic have been more devastating than the disease itself in Seychelles. Tourism is one of the worst hit-industries globally, yet it is the main source of income for Seychelles, accounting for 25 per cent of its GDP.”

Nnenna Nwabufo – Deputy Director General at African Development Bank Group

Nwabufo added that the Bank’s loan will support the government’s efforts aimed at cushioning the country against the impacts of the pandemic.”

The loan from the African Development Bank is the latest assistance received from international financial institutions.

The statement from the AfDB also showed insufficient economic diversification, a small domestic market and vulnerability to external economic and environmental shocks are among the main challenges the Republic of Seychelles is faced with.

“The pandemic has seriously exacerbated these challenges and wiped out some of the country’s development gains. The Bank has revised the 2020 and 2021 GDP growth rate projections for the country downwards, from 3.3 per cent and 4.2 per cent to -10.5 per cent and -7.7 per cent, respectively,” said the statement.

In response to the crippling effect of the COVID-19 outbreak, the Seychelles government in March amended its budget, taking on an immense financial burden as it works to enhance the country’s health systems, mitigate job losses, and redress lost business and household incomes.

The amended budget provides an additional $3.6 million for the health sector, which will be used to help build robust early detection surveillance systems and improved testing capacity at points of entry. The government is also facilitating the building of isolation and quarantine facilities before international flights resume.

In addition, the government of Seychelle has committed to safeguarding 37,409 private-sector jobs through provision of a six-month wage grant while also increasing allocations to the national Social Protection Agency to widen safety nets for informal workers and other vulnerable groups.

 

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