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 while he 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 Seychelles’ economy stabilised again.

Politically, President Michel’s fortunes were fast dwindling as the economic crunch gave his opponents campaign fodder. For some time it was obvious he was walking a tightrope.

Come 2011, however, and his bold economic move to liberalise Seychelles’ economy have not only borne fruit but have also silenced his critics and surpassed the IMF’s projections.

The IMF had indicated that the economy would grow by only 4% in 2010. Surprisingly it clocked an impressive 6.2% economic growth, boosted mainly by a record number of tourists who visited the country – numbering 174,529 – and foreign direct investment (FDI), which saw some US $290 million being pumped into the 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,” Mr Michel told the Delhi Sustainable Development Summit last month.
“We are enjoying an economic environment in which growth levels are high, while inflation remains low. In 2010, we recorded 6.2% economic growth in real terms, with inflation at almost zero.”

Fending off his critics, Mr Michel used his 2011 state-of-the-nation address at the end of February 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, totalling 174,529. Already, since the start of 2011, we are seeing an increase in the number of tourists over the corresponding period of 2010,” he said.

“The year 2010 was also an exceptionally good year for foreign direct investment, when US $290m entered the economy. In 2011, we expect this figure to be around US $120m.

“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 $250m at the end of January 2011, an equivalent of 2.4 months of imports.”

Mr Michel waxed lyrical on his government’s successes, and fisheries, which is a key pillar of Seychelles’ economy, did not escape his 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,” he said.

“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.”

In an attempt to encourage the Seychellois to take an active part in the country’s economy through wealth creation, the President 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 stressed that the Seychelles EXPO 2020 exhibition will be the launch pad for his government’s vision of the future 10 years of development.

“In our vision for 2020, we are using our islands – Aurore, Soleil, Eve, Romainville and Perseverance – to create economic space,” he said.

“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 relaunched as La Promenade, is reserved for Seychellois investments.”

Ranked seventh out of 52 in the recent Kenya-based National Media Group’s African Presidents Index, Mr Michel has turned the tables on his critics, not only by carrying out painful economic reforms but by steering the country towards international integration, stimulating the educational sector and setting standards in global environmental conservation.

This change in fortunes comes at a time when the presidential election is 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 his re-election bid.

By Wanjohi Kabukuru, Nairobi