Tourism / Transport
During the plantation era, cinnamon, vanilla and copra were the chief exports. In 1965, during a three-month visit to the islands, futurist Donald Prell prepared for the then-crown colony Governor General an economic report containing a scenario for the future of the economy. Quoting from his report, in the 1960s, about 33% of the working population worked at plantations, and 20% worked in the public or government sector. The Indian Ocean Tracking Station on Mahé was closed in August 1996 after the Seychelles government attempted to raise the rent to more than $10,000,000 per year.
Since independence in 1976, per capita output has expanded to roughly seven times the old near-subsistence level. Growth has been led by the tourist sector, which employs about 30% of the labour force, compared to agriculture which today employs about 3% of the labour force. Despite the growth of tourism, farming and fishing continue to employ some people, as do industries that process coconuts and vanilla.
As of 2013, the main export products are processed fish (60%) and non-fillet frozen fish (22%).
The prime agricultural products currently produced in Seychelles include sweet potatoes, vanilla, coconuts and cinnamon. These products provide much of the economic support of the locals. Frozen and canned fish, copra, cinnamon and vanilla are the main export commodities.
Since the worldwide economic crises of 2008, the Seychelles government has prioritised a curbing of the budget deficit, including the containment of social welfare costs and further privatisation of public enterprises. The government has a pervasive presence in economic activity, with public enterprises active in petroleum product distribution, banking, imports of basic products, telecommunications and a wide range of other businesses. According to the 2013 Index of Economic Freedom, which measures the degree of limited government, market openness, regulatory efficiency, rule of law, and other factors, economic freedom has been increasing each year since 2010.
The national currency of Seychelles is the Seychellois rupee. Initially tied to a basket of international currencies, it was depegged and allowed to be devalued and float freely in 2008 on the presumed hopes of attracting further foreign investment in the Seychelles economy.
In 1971, with the opening of Seychelles International Airport, tourism became a significant industry, essentially dividing the economy into plantations and tourism. The tourism sector paid better, and the plantation economy could only expand so far. The plantation sector of the economy declined in prominence, and tourism became the primary industry of Seychelles.
In recent years the government has encouraged foreign investment to upgrade hotels and other services. These incentives have given rise to an enormous amount of investment in real estate projects and new resort properties, such as project TIME, distributed by the World Bank, along with its predecessor project MAGIC. Despite its growth, the vulnerability of the tourist sector was illustrated by the sharp drop in 1991–1992 due largely to the Gulf War.
Since then the government has moved to reduce the dependence on tourism by promoting the development of farming, fishing, small-scale manufacturing and most recently the offshore financial sector, through the establishment of the Financial Services Authority and the enactment of several pieces of legislation (such as the International Corporate Service Providers Act, the International Business Companies Act, the Securities Act, the Mutual Funds and Hedge Fund Act, amongst others).
During March 2015, Seychelles allocated Assumption island to be developed by India.
Although multinational oil companies have explored the waters around the islands, no oil or gas has been found. In 2005, a deal was signed with US firm Petroquest, giving it exploration rights to about 30,000 km2 around Constant, Topaz, Farquhar and Coëtivy islands until 2014. Seychelles imports oil from the Persian Gulf in the form of refined petroleum derivatives at the rate of about 5,700 barrels per day (910 m3/d).
In recent years oil has been imported from Kuwait and also from Bahrain. Seychelles imports three times more oil than is needed for internal uses because it re-exports the surplus oil in the form of bunker for ships and aircraft calling at Mahé. There are no refining capacities on the islands. Oil and gas imports, distribution and re-export are the responsibility of Seychelles Petroleum (Sepec), while oil exploration is the responsibility of the Seychelles National Oil Company (SNOC).