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Modernize, Utilize, Digitalize: How to Raise Productivity to Deliver Growth, Good Jobs, and Social Mobility in Seychelles
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Modernize, Utilize, Digitalize: How to Raise Productivity to Deliver Growth, Good Jobs, and Social Mobility in Seychelles
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Modernize, Utilize, Digitalize: How to Raise Productivity to Deliver Growth, Good Jobs, and Social Mobility in Seychelles
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This report examines how Seychelles can sustain prosperity and expand opportunities by addressing structural constraints that limit growth and productivity. It argues that modernizing labor and business regulations, investing in human capital, and accelerating digital transformation are key to creating more and better jobs, raising incomes, and strengthening economic resilience. It estimates that a comprehensive reform package could increase GDP by 13% by 2040, create 2,900 additional jobs, boost real wages by nearly 8%, and improve living standards for households.
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September 17, 2026
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Seychelles has achieved one of Africa’s strongest development records, becoming the continent’s only high-income economy. Yet maintaining high living standards and expanding opportunities for future generations will require a new growth model. As a small island state, Seychelles faces structural constraints including a limited domestic market, high transport and logistics costs, vulnerability to external shocks, and a narrow range of economic opportunities.
The <a href="https://openknowledge.worldbank.org/entities/publication/9264a4f5-29c4-40ff-903b-9891303c089a” rel=”nofollow noopener” target=”_blank”>Seychelles Country Growth and Jobs Report 2026 addresses a fundamental question: What economy does Seychelles aspire to have in 2040, and what is required to achieve this? The report finds that raising productivity is the most effective way to accelerate growth, create more and better-paid jobs, and expand opportunities for all Seychellois. By modernizing labor market regulations and the business environment, making better use of its human capital, and embracing digital transformation, Seychelles can build a more productive, resilient, and prosperous economy that delivers greater economic opportunities, higher incomes, and better living standards.
The report estimates that implementing a comprehensive package of reforms could increase GDP by 13 percent by 2040, create 2,900 new jobs, generate the equivalent of more than 7,600 better-paying jobs, raise real wages by almost 8 percent, and improve household living standards while maintaining fiscal sustainability.
KEY FINDINGS
Structural constraints continue to limit growth. Seychelles’ geography, small market size, and exposure to external shocks constrain economic diversification and increase the cost of doing business. Tourism and fisheries remain the dominant drivers of economic activity, underscoring the importance of targeted reforms to strengthen productivity and resilience.
Labor market rigidities are holding back productivity. Labor regulations have changed little over the last three decades, reducing flexibility for firms and workers. At the same time, population aging, skills shortages, and limited labor supply have increased reliance on foreign workers, who now account for a significant share of private-sector employment.
Youth vulnerability threatens long-term prosperity. Challenges such as school disengagement, substance abuse, teenage pregnancy, and weak school-to-work transitions are undermining human capital development and social mobility. Without action, these vulnerabilities could limit future productivity and labor force participation.
Private sector dynamism remains limited. Most productivity gains come from established firms, while business creation and innovation remain relatively weak. High costs related to trade, finance, electricity, and commercial processes continue to constrain investment and growth.
Digital adoption is lagging. While internet connectivity has expanded significantly, digital transformation remains incomplete. Affordability, reliability, digital skills, and trust continue to limit digital uptake by businesses, households, and government institutions.
POLICY PRIORITIES
The report identifies three interconnected priorities to raise productivity, create more and better-paid jobs, and expand economic opportunities for all Seychellois. These reform areas are mutually reinforcing and should be implemented together to achieve the full benefits for citizens, firms, and the economy.
Modernize: Modernize the labor market and business environment to help firms grow, invest, and compete. This includes reforming labor regulations to increase flexibility while protecting workers, improving trade facilitation, reducing barriers to investment, strengthening commercial justice, and modernizing the management of foreign labor. Together, these reforms would help businesses become more productive, encourage entrepreneurship, and support job creation.
Utilize: Invest in people and ensure that all Seychellois can contribute to, and benefit from, economic growth. This includes addressing youth vulnerability, improving education outcomes, strengthening skills development, and creating better pathways from school to employment. By making better use of the country’s human capital, Seychelles can get more Seychellois into work and better-paid jobs, raise living standards, and reduce future skills shortages.
Digitalize: Accelerate digital transformation to raise productivity across the economy. Priorities include improving the affordability, quality, and reliability of internet services, expanding digital government, strengthening digital skills, and supporting technology adoption by businesses, particularly small and medium-sized enterprises. A more digital economy can help Seychelles overcome some of the constraints imposed by its small size and geographic isolation while creating new opportunities for innovation and growth.
If Seychelles implements this reform agenda as a comprehensive package, the benefits could be substantial. By 2040, GDP could increase by 13 percent, creating 2,900 additional jobs and generating the equivalent of more than 7,600 better-paying jobs. Workers could earn almost 8 percent more in real terms, while households could see their purchasing power increase by over 8 percent. Together, these gains would support higher living standards, greater economic opportunity, and a more prosperous future for Seychellois families.
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