Seychelles Development Policy Lending

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This development policy loan (DPL) is designed to support the adjustment and reform strategy of the Government of the Seychelles. The operation involves a single tranche of €6.4 million (US$9 million equivalent) and is conceived as a one-time operation supporting structural reforms to put the Seychelles on a sustainable development path. The objective of the operation is to help the Seychelles establish a stable macroeconomic environment and sustainable fiscal framework. This will be achieved through fiscal adjustment underpinned by public administration and civil service reforms and a reduction of the role of the state in commercial activities. The operation also supports establishment of a targeted social safety net. By providing foreign exchange in a timely manner, the operation will directly contribute to stabilization of the economy during a period of global slowdown and will help in building public support for the reform process. The DPL is expected to achieve substantial measurable outcomes during 2009 and 2010 and to contribute to the achievement of restoring internal and external balances with the assistance of the international financial institutions and development partners.