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AfDB Board approves US $20 million ADF loan for private sector development program in the Seychelles
The Board of Directors of the African Development Bank Group on Tuesday, December 3, approved a US $20 million African Development Fund loan for the Inclusive Private Sector Development and Competitiveness Programme (IPSDCP). The program aims to address the key constraints to private sector development and competitiveness in Seychelles, with a focus on inclusiveness, public sector efficiency and SME development.
The project comprises two components: (a) addressing key constraints to private sector development; and (b) strengthening Performance Management Systems to maximize public-sector efficiency.
Seychelles has recorded considerable success in implementing reforms aimed at achieving macroeconomic stability and the promotion of private-sector-led growth. Fiscal consolidation and investment climate reforms have led to economic recovery and a credible path to debt sustainability. However, the country faces challenges with regards to building resilience against external shocks by strengthening economic competitiveness and ensuring inclusive economic growth that caters to the need of vulnerable segments of the population.
The program is anchored on the Bank’s 2011-2015 Country Strategy Paper which focuses on strengthening private sector development and economic competitiveness, with three components (1) infrastructure development; (2) enabling financing and regulatory environment; and (3) human capital development.
It is also in sync with the Bank’s broader strategic framework set out in the new Ten Year Strategy (in particular through its emphasis on inclusive growth and job creation), the new Private Sector Development Strategy approved in July 2013.
The main target beneficiaries of the program include MSMEs, key government entities and civil society groups. Other include private sector operators (in particular MSMEs, with a special emphasis on those owned or operated by women and youth), and public institutions. Given the strategic focus of the program, domestic MSMEs will be key beneficiaries. Given the expected positive impact on growth, job creation, and economic competitiveness, the entire Seychellois population can be considered to be indirect beneficiaries. Budget execution, as supported with funds from the IPSDCP, will also have direct impact on the population through spending on social services, including health and education, and on infrastructure.
The Bank’s active portfolio in Seychelles comprises six operations approved and/or ongoing including two projects, two studies, one policy-based partial risk guarantee, and one emergency relief assistance. The total commitment, net of cancellations, is UA 15.597 million* as of June 2013.
* As of December 2013, 1 UA (Unit of Account) = US $1.53521