The Board of Directors of the African Development Bank (AfDB) on Wednesday, February 24, 2016 approved the 2016-2020 Country Strategy Paper (CSP) for Seychelles, which aims to foster a more diversified economy with greater resilience to external shocks and job creation for youth.

The approval comes with a US $39-million financing package which will be complemented with trust fund resources, climate funds as well as resources to be mobilised from parallel and co-financing mechanisms.

According to papers presented to the Board, the Bank support will focus on establishing a more conducive business environment to enable private sector activity in traditional as well as new sectors of economic activity.

The Bank' strategy is built on two pillars - enhancing energy infrastructure to promote inclusive and green growth; and supporting policy reforms to stimulate private sector activity and economic diversification.

The first support pillar focuses on one energy project - the Project for Improved Power Supply on La Digue and upgrading of power stations - while the second pillar envisages a 3-year program based operation on private/financial sector development.

Under its public-sector window, the Bank will help create a more conducive environment for existing and new businesses in general. It will also seek to provide targeted assistance from its private-sector window. Non-lending activities are also programmed to specifically support the development of businesses that have the potential to engage in high value-added, transformative economic activities to promote economic diversification.

The new CSP has mainstreamed cross-cutting themes such as green and inclusive growth as well as gender equality in line with the Bank's 2013-2022 Ten Year Strategy. It is also fully aligned with the Bank's High-5 priorities, notably 'Light up and power Africa' and 'Industrialize Africa', as well as with the Sustainable Development Goals (SDGs). Furthermore, the new CSP emphasizes advisory services in specialized areas, notably financial sector development, where the Bank will support the launch of a 'Blue Bond'.

Seychelles, a small island developing (SID) state with some 94,000 inhabitants (2014) has made enormous progress from 1980 (with gross national income, GNI, per capita of US $2,080 to 2014 and GNI per capita of US $13,710), reaching high-income status in July 2015. It has strong social indicators: the 3rd highest Human Development Index ranking in Africa, and seven out of eight Millennium Development Goals met. Continued political stability and good governance have been key to this success story.

However, the country continues to face a number of challenges given the dualistic structure of its economy that depends on tourism and fisheries - notably insufficient economic diversification and vulnerability to external shocks, including climate change.

In approving the CSP, the Board emphasised the need to develop the private sector by providing it with a more enabling environment to fully exploit Seychelles' private sector potential. Furthermore, strong green growth will help protect Seychelles' fragile natural environment against the adverse impacts of climate change.

Seychelles' National Development Strategy (NDS 2015-19) was adopted in November 2015, with the concept of the 'Blue Economy' as its centrepiece. This innovative concept integrates conservation and sustainable use of ocean resources as a well as branding Seychelles a 'blue' tourism destination.