European Union

Key facts and figures

• Area: 455 km2
• Population (est. 2010): 88,000 (density 191/ km2)
• Capital: Victoria
• Currency: Seychelles Rupee (1 EUR = SR 17.25 December 2012)
• Official Languages : English, French and Creole
• Gross Domestic Product: USD 11,600 per capita in 2011
• Main industries: tourism and fisheries
• Main imports: machinery, fuel, foodstuffs
• Main Exports: canned tuna, frozen fish, fuel (re-exports)
• Main Trading Partners: United Kingdom, France, South Africa, UAE, China, India
• Political status: Independent since 1976 and became a Republic
• Cooperation with the EU: since 1979 (Lomé Convention), ratified the 2010 revised Cotonou Agreement and signed the Interim Economic Partnership Agreement between the EU and Eastern and Southern Africa

International and Regional memberships

Seychelles is a member of:

• the African Union (AU),
• the Commonwealth,
• and of the Organisation Internationale de la Francophonie.

It is also an active member of a number of Indian Ocean and Southern African regional organi¬sations, including:

• the Common Market for Eastern and Southern Africa (COMESA);
• Indian Ocean Commission (IOC);
• Southern African Development Community (SADC);
• Indian Ocean Rim (IOR)

EU-Seychelles co-operation portfolio includes assistance through general budget support and projects with an overall budget of around EUR 36 million for the period 2008-13. Seychelles benefits from the European Development Fund (approx. EUR 20.4 million) and some EU budget lines such as the Global Climate Change Alliance (EUR 2.0 million), the Instrument for Stability (approx. EUR 0.8 million) and the Environment budget line (approx. 0.7 million), non State Actors budget line (EUR 0.25 million) a grant funding by the Infrastructure Trust Fund (EUR 4 million) and blended EU grants (EUR 7.8 million) with EIB loan in the water supply. Seychelles is in the process of achieving all the MDG's by 2015 in line with the EU policy on global poverty reduction.
Since November 2008 the Government has implemented a bold economic reform programme and results achieved so far have been praised by IMF during it regular reviews (ref: IMF website). This programme is characterised by a high level of ownership and a participatory approach under the message: "Together, we stand ready for the future".
 
This image depicts how budget support works emphasising the crucial role of the partner country’s government.

In consideration of the above the European Union decided in 2009 to approve a significant increase of the financial resources allocated to the country under the EDF (from EUR 5.9 million to EUR 17.4 million including the B envelope) and a restructuring of the country's national programme to include the first ever EU general budget support to Seychelles (EUR 16.5 million) of which EUR 8.0 million were frontloaded and disbursed in December 2009. The second tranche of EUR 2.375 million disbursed in October 2010 followed by a third tranche of EUR 2.375 million was disbursed in December 2011. A last tranche of € 2.5 million was disbursed in December 2012 thus concluding the implementation of the programme.

The general budget support of EUR 16.5 million was implemented under the Seychelles Economic Reform Programme (SERP) over the period 2009-2012. The objective was to mitigate the consequences of the global crisis and contribute to achieve macro-economic stability. Disbursement was linked to key performance indicators. The aim was to enhance public financial management and implementation of macro-economic policies conducive to economic growth. Focus was also laid on enhanced transparency and accountability for better management of public finances and creation of an enabling environment for private sector development.

The Seychelles also benefits from a sector budget support of EUR 3 million for the development and implementation of a Medium Term Education Strategy. This grant was recently included in its EDF program via an ad-hoc revision approved by the EU Member States in the last quarter of 2010, in response to the costs of piracy for its economy (i.e.: to mitigate the impact of additional budgetary expenditure for the surveillance of the EEZ). Under the programme, Seychelles will benefit from specialised technical assistance. In this way Seychelles will have the opportunity to maintain its level of services in social sectors.

 Other EU-funded programme include :

1. completion of the implementation of other bilateral EDF sponsored programs(namely: Solid Waste management program) financed under the 9th EDF and 

2. implementation of programmes from additional financial resources via EU budget lines in support of Seychelles:

   1.  Implementation of additional financial resources via the GCCA budget line (EUR 2 million to accompany the Seychelles' Strategy to fight climate change);

   2. Implementation of additional financial resources via the Instrument for Stability to support the Seychelles in the international fight against piracy (EUR 780,000);

   3. Implementation of the NSA budget line (EUR 250.000) to  support small-scale local development activities to be developed by civil society or local authorities for deprived groups, women's empowerment and gender issues, education (including disabled children), women and children in distress, child abuse, domestic violence, and rehabilitation of drug addicts. This complements a governance capacity building program addressed to State and Non State Actors in the area of human rights, which is financed via the EDF (EUR 650,000);

   4. Implementation of the Environment budget line (approx. EUR 700.000) for mainstreaming the management of invasive species as fundamental to preserving the ecological integrity and enhancing the resilience of Seychelles' World Heritage sites.

Seychelles and the European Union are working closely to facilitate a higher level of participation of Seychelles in regional programs of the Indian Ocean Commission (SmartFish and ISLANDS) which are all of great relevance to Seychelles and present development opportunities.

Following the launch and implementation of the economic reforms program, relations with European Investment Bank (EIB) have been re-launched and revamped successfully: the EIB agreed in March 2011 to provide EUR 8 million loan for the installation and operation of the first submarine fibre-optic cable for international connections from the Seychelles which has dramatically improved telecommunications and internet access in the Seychelles, and decreased communication cost. This loan was blended with a EUR 4 million grant funded via the EU Infrastructure Trust Fund. The fibre optic cable successfully landed in Seychelles in May 2012 and is operational. Other promising projects are in the area of supply of water.

In November 2011, the EIB agreed on a EUR 26.7 million loan for the implementation of a water and sanitation programme. The project will renew and expand water supply systems, upgrade and create sewerage systems, introduce water demand and resource management, and build capacity of the Public Utilities Corporation. The EU will contribute to this project through an EDF grant of up to EUR 2.4 million  for Technical assistance and an interest rate subsidy on the EIB loan to an amount estimated equivalent to EUR 5.4 millions over the duration of the loan. Other contributing development partners are the AFD for EUR 10 million and AfDB for EUR 11.5 million.

In line with the strategy to address the needs of private sector development, the EIB has provided a loan of EUR 5.0 million in August 2012 to the Development Bank of Seychelles (DBS) to support development of small and medium enterprises. This initiative will be supported by technical assistance to help the DBS to modernise its governance, credit risk management and financial monitoring.