Seychelles Maps Productivity Reforms to Lift Wages, Create Jobs and Secure Future Growth by 2040

World Bank-backed productivity reforms could raise Seychelles’ GDP by 13% by 2040, create 2,900 additional jobs and improve wages and household purchasing power. Success will depend on coordinated action to modernise business rules, strengthen workforce skills and expand affordable, inclusive digital services.

Seychelles has built one of Africa's strongest development records, but preserving that success will require the island economy to produce more value from its workers, businesses and technology. A new World Bank report argues that carefully coordinated productivity reforms could raise incomes, create better employment and protect living standards as the population ages and employers face persistent skills shortages.

The 2026 Seychelles Country Growth and Jobs Report: Modernize, Utilize, Digitalize: How to Raise Productivity to Deliver Growth, Good Jobs, and Social Mobility estimates that its proposed reforms could increase gross domestic product by 13% by 2040. They could create 2,900 additional jobs and generate economic gains equivalent to more than 7,600 better-paying positions.

Real wages could rise by almost 8%, while household purchasing power could increase by more than 8%. These projections are not guaranteed outcomes. Their delivery will depend on whether Seychelles can implement complementary reforms across business regulation, education, labour markets and digital infrastructure.

Why Productivity Is Becoming Seychelles' Defining Economic Test

More than three decades of economic growth have given Seychelles Africa's highest income per capita, according to the information accompanying the report. Yet high-income status does not protect the country from structural pressures associated with its small population, limited domestic market and geographic isolation.

An ageing population could gradually constrain labour-force growth and place additional pressure on public finances. Businesses are already struggling to find workers with appropriate skills, while high operating and trade costs can make it difficult for local companies to compete or expand.

Productivity is therefore becoming increasingly important. If the number of available workers grows slowly, Seychelles must generate more economic value from its existing workforce, capital and technology. Higher productivity could allow businesses to increase wages while remaining competitive, enabling households to secure a larger share of national economic progress.

Finance, Economic Planning, Trade and Investment Minister Pierre Laporte has said continued reforms supporting productivity, innovation and private-sector growth will be necessary to achieve Seychelles' ambitions. The challenge for the government is to convert this policy direction into measurable improvements for workers, young people and businesses.

Modernising Business Rules Without Weakening Worker Protection

The World Bank's "Modernize" pillar focuses on improving the conditions under which companies invest, recruit and grow. Its recommendations include updating labour regulations, improving foreign-worker management, strengthening commercial justice and reducing obstacles to trade and investment.

Clearer rules and faster dispute resolution could lower uncertainty for businesses. Smaller enterprises could benefit substantially because they generally have fewer resources to navigate complicated procedures, prolonged legal disputes or regulatory delays.

A more predictable commercial environment could also attract investment and encourage established companies to expand. However, policymakers will need to ensure that domestic businesses can participate in new opportunities rather than being displaced by larger competitors.

Labour reform presents a particularly sensitive balancing act. Seychelles relies on foreign workers in parts of its economy, but it also wants better career opportunities for Seychellois citizens. Tight restrictions could intensify labour shortages and raise business costs, while poorly managed recruitment could weaken incentives to train local workers or expose migrants to inadequate employment conditions.

The precise changes proposed for labour regulations, commercial procedures and investment rules are not specified in the available material. Their effectiveness will depend on consultation with employers, workers and other affected groups.

Connecting Young Seychellois to Better Employment

The report's "Utilize" pillar puts human capital, workforce skills and youth vulnerability at the centre of Seychelles' growth agenda. This recognises that headline economic growth will not automatically produce social mobility if young people cannot acquire the capabilities demanded by employers.

Stronger links between education, training institutions and businesses could help reduce the mismatch between qualifications and available jobs. Career guidance, technical education, workplace learning and continuing professional development could create more reliable pathways from school into productive employment.

For young Seychellois, the potential gains include wider career choices and access to better-paying positions. Employers could benefit from a stronger domestic talent pool and reduced difficulty in filling specialised roles. The government could gain through higher tax revenue and lower social costs associated with unemployment and exclusion.

However, vulnerable young people may need more than training courses. Financial constraints, limited digital access and weak connections to employers can prevent qualified candidates from entering the labour market. Targeted employment services and practical support may therefore be necessary.

Progress should be judged through employment rates, wage growth, job retention and employer demand, not simply by the number of people enrolled in training. Authorities must also examine whether benefits are reaching different income groups and communities.

Can Digitalisation Convert Isolation into Opportunity?

The "Digitalize" pillar calls for better-quality, more affordable internet access, expanded digital government and stronger digital skills. For a small island economy, digital adoption could help companies reach international customers, manage operations more efficiently and reduce some disadvantages created by distance.

Entrepreneurs could use e-commerce and digital payments to access new markets, while established businesses could improve logistics, customer service and internal management. Digital public services could reduce administrative burdens and make government processes more accessible.

Connectivity alone, however, will not produce the projected gains. Smaller businesses may lack the financing or expertise to adopt new systems. Workers in routine occupations may require retraining as automation changes job requirements. Greater reliance on technology will also increase cybersecurity, privacy and service-continuity risks.

The reforms will have their greatest effect if implemented together. Skills programmes will deliver limited results if businesses cannot invest, while regulatory improvements may have little effect if firms remain constrained by costly connectivity or labour shortages.

Development partners can provide technical support, financing and independent evaluation. Businesses must invest in innovation and workforce development, while worker organisations and civil society can help ensure that job quality and inclusion remain central.

What matters next is whether Seychelles establishes a funded implementation plan with clear responsibilities, deadlines and measurable targets. The cost of the reforms and the assumptions behind the projected GDP, wage and employment gains also require scrutiny.

Seychelles' next economic chapter will ultimately be judged not by projections but by whether productivity improvements translate into better wages, sustainable businesses and credible opportunities for its young people.