Seychelles - Governance and Economic Reforms Support Program (GERSP)

The proposed operation is a loan to the Republic of Seychelles of US$20 million (UA 14 million) to finance the Governance and Economic Reforms Support Program (GERSP). It is the first in a 3-year programmatic series, for the years 2021, 2022, and 2023. The program results from a request to the Bank by the Government of Seychelles in February 2021. The proposed GERSP deepens reforms that were introduced through the Seychelles’ COVID-19 Crisis Response Budget Support Program that was approved in June 2020 for an amount of US$ 10 million and will be completed in July 2021. The GERSP loan will contribute to financing the fiscal gap due to declining fiscal revenues and increased spending while reducing the risks in the public debt profile. It will also create more and better opportunities for all Seychellois by (i) conserving the fiscal space and reducing debt vulnerabilities, thus allowing the Government to allocate its scarce resources to priority projects and protecting the vulnerable population; (ii) removing the constraints for doing business, thus enabling local MSMEs to better engage in international trade; and (iii) improving access to renewable energy and better solid waste management practices, thus enhancing inclusive growth and environmental sustainability. Another dimension of the reforms is a partial re-profiling of short-term public domestic debt to mitigate roll-over risks and complement domestic financing.