The World Bank approved on June 25, a $15 million loan from the International Bank for Reconstruction and Development (IBRD) in support of the Republic of Seychelles’ response to the economic and social fallout of the COVID-19 pandemic. The Development Policy Lending will help enhance the country’s response mechanisms in health, social protection and the private sector, and to support the country’s post-crisis recovery through strengthened financial systems and climate resilience.
“This financing will ultimately contribute to protect the most vulnerable as well as build economic resilience for future shocks,” noted Mark Lundell, Country Director for Seychelles. The operation’s focus on protecting lives and livelihoods will strengthen social assistance programs in aid of vulnerable households, and the deployment of financial mechanisms to manage the adverse economic impacts of COVID-19 in the private and financial sectors.
“Protecting jobs in these uncertain times is indeed paramount given the devastating effects of this global pandemic on Seychelles economy, particularly on the tourism and fishery sectors,” added Sashana Whyte, World Bank economist and the operation’s co-task team leader.
The operation will seek to offset losses of revenues among hard-hit private sector operators by helping secure payment of salaries, as well as temporarily lessening the tax burden for businesses, thus enhancing liquidity and maintaining their viability during the pandemic.
“Likewise, the operation will support Seychelles’ Climate Change Policy which aims to strengthen the long-term resilience of key sectors such as tourism and protect economic development in the vulnerable coastal zone,” added Brenden Jongman, World Bank Economist and the project’s co-task team leader.
Furthermore, the operation comprises prior actions to promote transparency in the domestic financial sector, which has the potential to improve the business regulatory framework,and help build the necessary buffers for future shocks and improve the country’s overall growth prospects.
World Bank Group COVID-19 Response
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans.