World Bank approves $15 million loan to help Seychelles counter COVID's economic effects
The loan will also help to offset losses of revenues among hard-hit private sector operators, as well as temporarily lessening the tax burden for businesses. (File photo: Gerard Larose, Seychelles Tourism Board)
(Seychelles News Agency) - The World Bank has approved a $15 million loan from the International Bank for Reconstruction and Development to support Seychelles' response to the economic and social fallout of the COVID-19 pandemic.
The World Bank said this week that the loan will help enhance the country's response mechanisms in health, social protection and the private sector, and it will 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, the country director for Seychelles, a group of 115 islands in the western Indian Ocean.
When answering questions in a live press conference last Thursday, the President of Seychelles, Danny Faure, warned that the pandemic has put the country in crisis and that if the situation continues the island nation will face more difficult times ahead.
Elizabeth Agathine, the principal secretary for economic planning in the finance ministry told SNA via email that the support "will assist the country in stabilising its macroeconomic situation. The funds will go towards the financing of the amended budget which was approved earlier in April."
A World Bank economist and the operation's co-task team leader, Sashana Whyte, said that "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."
Already 91 businesses have filed for permission to make employees redundant as they cannot sustain their activities from which nearly 190 Seychellois workers could lose their jobs.
The loan will also help 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.
Through the loan, the World Bank will also provide support for the 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.
Earlier this year, the World Bank gave Seychelles a $6.9 million line of credit that has been transferred into the country's international reserves.
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.