Those experiencing poverty in Seychelles live on less than $6.85 a day, which was estimated to be nearly 5.6% of the population in 2023. The majority of poverty is concentrated in certain districts of Mahé, the largest island. Issues like substance abuse and teenage pregnancy affect people in poverty – these can hinder efforts in poverty reduction, though they are taking steps.

Foreign Investment and Tax Reform

The government is utilizing its newest Fitch Rating to create more employment opportunities. A Fitch Rating evaluates an entity’s ability to pay back loans, keep promises and generally be a sound investment for a financial institution. This will lead to more FDI, allowing the government to further invest this money in creating employment. Recent increases in employment have been shown to reduce poverty in Seychelles from 5.9% to 5.6% from 2022 to 2023—this is vital for poverty reduction.

By reducing the tax from 30% to 25% for profits of more than 1 million SCR, the 2022 reform reduces strain on businesses in Seychelles and equally facilitates more Seychellois businesses.  Businesses below the 1 million threshold now also benefit from a 15% tax on profits, down from 25% before 2022. This is promising for smaller business owners who may experience levels of poverty.

Regional Disparities

One challenge to poverty reduction in Seychelles is a high level of income inequality. However, the government is helping to address this intra-regional inequality by investing in the education system. Currently, Seychelles spends 10% of its GDP on education. It has also invested in health care and created social safety nets; an example of this is how it increased pensions and the minimum wage.

The World Bank

In 2021, the World Bank gave Seychelles a loan of $30 million for reforms on its social protection system, which is important for poor Seychellois as it covers pensions, welfare and help for those with disabilities. The World Bank estimated that the COVID-19 pandemic halted efforts in poverty reduction. This resulted in the percentage increasing from 25% to 37%, which was essential for further poverty reduction.

Multidimensional Poverty Index Report

Seychelles released its 2019 MPI report, a useful resource to help understand poverty within the country. The Seychelles’ Poverty Alleviation Department created this report as a way to produce a guideline for future policies for poverty reduction in Seychelles. This makes it easier to understand the situation of the poorest Seychellois and understand the challenges they face.

Despite these challenges, the future is bright for Seychelles. It has demonstrated economic growth and investment in its workforce even after 2020. By securing foreign investment, a future is secured for the poorest and most vulnerable of the Seychellois.

– Callum Bennett

Callum is based in Colchester, Essex, UK and focuses on Global Health and Politics for The Borgen Project.

Photo: Flickr