World’s most-vaccinated nation sees a pickup in tourism

Tourism has picked up in Seychelles after vaccinating a larger proportion of the population against the coronavirus than any other nation.

The number of visitors to the island archipelago in the Indian Ocean fell by 92% to 6,785 in the first quarter when the international travel area almost came to a standstill. The Seychelles have since reopened their borders and several airlines have resumed their flights. The country recently saw a surge in Covid-19 infections, although it subsided this week.

The tourism figures “are not numbers before Covid, but it is a significant improvement,” said Minister of Finance, Economic Planning and Trade, Naadir Hassan, in an interview on Thursday. While the government banned the mixing of households and sporting events in response, given the increased viral load, the minister said the economy could not handle another border closure, whether or not there was another surge.

“If we close our main sector, tourism, it will be affected,” said Hassan. “That means we are not generating any revenue, which will have an immediate effect on our exchange rate, and the government will not be able to sustain its economy.”

Read more: Seychelles Covid Outbreak Eases, Booster Shot taken into account

Falling tourism revenues have put a heavy strain on the government’s finances. This requires more disciplined spending and a significant reduction in support for Air Seychelles Ltd., Seychelles Public Transport Corporation and other government agencies, the minister said.

The budget deficit is expected to fall from 18% in 2020 to 15.3% of gross domestic product this year, according to the budget published in February. The Seychelles are currently in talks with the International Monetary Fund about the provision of budget support.

The nation’s debt is roughly 100% of its gross domestic product. At the end of last year, rupees 18.1 billion ($ 1.1 billion) were owed, a little more than half of that to outside creditors.

The government plans to reorganize its debt and replace some domestic loans with more external funding. A move she hopes will lower her interest bill, Hassan said.

Read more: Seychelles sees budget deficit tight in 2021

More stories like this are available on bloomberg.com

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