Seychelles
Country
Seychelles

Select Country +

IMF’s recent engagements on infrastructure governance

Public Investment Management Assessment (PIMA) January 2023
Climate PIMA (C-PIMA) January 2023
Review of the Public Financial Management (PFM) Legal Framework November 2024

 

 

Related Documents

PIMA and C-PIMA Technical Assistance Report

PIMA and C-PIMA Country Summary Assessment

 

 

 

Summary of PIMA report

(Published in November 2023)

 

Seychelles’ significant investments in public infrastructure in the 1990s contributed to the development of the economy and built a relatively large stock of public capital. However, this was largely debt-financed, pushing Seychelles debt-to-gross domestic product (GDP) to 200 percent by the early 2000s. During the period of rapid fiscal consolidation following the global financial crisis, investment as a share of total expenditure fell from an average of around 23 percent in the 1990s to 13 percent in the 2000s. Although this picked up in the mid-2010s when the government increased investment, it subsequently fell away by the end of the 2010s to be below 10 percent of expenditure for the first time in 20 years.

 

⚠ Some users may experience reduced functionality using Internet Explorer. For the optimal experience, use Chrome or another alternative browser.

 

 

Summary of C-PIMA report

(Published in November 2023)

 

Climate change and natural disasters have significant macroeconomic and fiscal implications in Seychelles. Annual mean temperature in Seychelles have risen steadily over the past decades and are projected to increase by 1.7-3.2°C towards 2100 relative to the 1995–2014 baseline across the 2-4.5 and 5-8.5 Shared Socioeconomic Pathway emission scenarios. This would likely lead to increased intensity and frequency of storms and heavy rainfalls, while water shortages will be exacerbated by prolonged droughts. The sea level has already risen at a rate of 5.6-6.6 millimeters per year between 1993 and 2010. The sea level could rise by 0.59-0.82 meters on average by 2100 under these scenarios. Combined with high tides and storm surges, the rise in sea levels poses a major risk to coastal infrastructure and population that are concentrated in the coastal areas. These climaterelated events could result in substantial damage to infrastructure and main economic sectors, with disproportionate impacts on the vulnerable groups due to their limited capacity to adapt/respond to climate change and natural disasters. Authorities indicate that adapting to climate risks in Seychelles would cost about USD 39 million per year (about 2.7 percent of GDP) by 2030. IMF analysis shows that Seychelles has financial resilience to withstand a reasonably large disaster but would suffer a heavier debt burden. The country is also vulnerable to tail-risk events, which are increasingly likely with climate change—a catastrophic tail risk event would make debt unsustainable.

 

⚠ Some users may experience reduced functionality using Internet Explorer. For the optimal experience, use Chrome or another alternative browser.