By Wanjohi Kabukuru, Nairobi, March 1 2011 – Three years ago, Seychelles President James Michel found himself in the uncomfortable seat of shepherding his country out of economic woods.
The Seychelles rupee was floated and it took a heavy beating from the world’s major currencies as inflation soared and essential consumer commodities prices hit the roof as Michel freed the economy. All observers led by the Bretton Woods institutions notably the International Monetary Fund (IMF) projected that it would take several years before the Seychelles economy stabilized again. Politically, President Michels’s fortunes were fast dwindling as the economic crunch gave his opponents campaign fodder.
For sometime it was obvious President Michel was walking a tightrope. Come 2011 and Michel’s bold economic moves of liberalizing the Seychelles economy have not only borne great fruits but have also silenced his critics and surpassed IMF’s projections. The IMF had indicated that the Seychelles economy would only grow at 4% in 2010.
Surprisingly the Indian Ocean nation clocked an impressive 6.2% economic growth mainly boosted by a record number of tourists who visited island nation, numbering 174,529 and Foreign Direct Investment (FDI) which saw some US$290million being pumped into her economy.
“Today, many countries, including certain European countries such as Greece and Ireland, are experiencing increasing levels of debt. Seychelles is heading towards a sustainable debt level. We are enjoying an economic environment in which growth levels are high, whilst inflation remains low. In 2010, we recorded 6.2% economic growth in real terms, with inflation at almost zero.” Says Michel.
Fending off his critics President Michel used his 2011 annual State of the Nation Address at the end of February this year to counter the opposition’s criticism of his administration, showcasing his achievements and outlining his policy projections.
“Our other economic indicators are very encouraging. In 2010 we saw a record number of tourists who visited Seychelles, totaling 174,529. Already, since the start of 2011, we are seeing an increase in the number of tourists over the corresponding period of 2010. The year 2010 was also an exceptionally good year for Foreign Direct Investment, when US$290 million entered the economy. In 2011, we expect this figure to be around US$120 million. The performance of the domestic economy remains very solid. There are economic indicators that are even more revealing: a fiscal surplus, fundamental to the continued reduction of our national debt; a stable exchange rate; foreign exchange reserves which had reached almost US$250 million at the end of January 2011 an equivalent of 2.4 months of imports.” Michel waxed lyrical of his government’s successes.
Fisheries which is a key pillar of Seychelles economy did not escape President Michel’s attention:
“With regard to fisheries, work is in progress to improve infrastructure to enable fishermen to have better access to resources and facilities. Improvement works have been made to the artisanal fishing port in Victoria, and work is continuing on the development of fishing ports at Bel Ombre and Providence. Other works concerning artisanal and semi-industrial fishing are currently either being implemented, or at the stage of tender preparation, for implementation later this year.” Noted Michel.
In an attempt to encourage the Seychellois to take an active part in the country’s economy through wealth creation President Michel announced that his administration has decided to sell 40% of its shares in the Seychelles Savings Bank to its clients and employees of the Bank who wish to buy shares.
He further reiterated that the Seychelles EXPO 2020 exhibition would be the launch pad for his government’s vision of the future ten years of development.
“In our vision for 2020, we are using our islands –Aurore, Soleil, Eve, Romainville and Perseverance to create economic space. We will make available opportunities for Seychellois to develop around 1,400 houses of different styles that blend well with our Seychellois creole identity and environment. These houses will be tendered out to Seychellois who aspire to either have their own homes or wish to undertake commercial developments. Our ‘waterfront’ project which has been re-launched as ‘La Promenade’ is reserved for Seychellois investments,” said Michel.
Ranked 7th in The African President Index’s Michel has turned the tables on his critics, by not only implementing painful economic reforms but also steaming the country towards international integration, stimulating the educational sector and setting the standards in global environmental conservation.
This change in fortunes comes at a time when the presidential elections of the Indian Ocean nation are just around the corner. Political analysts see this economic boom which has given a new sheen to the “Indian Ocean jewel” as a major boost to Michel’s re-election bid.