Africa > East Africa > Seychelles > Governor Caroline Abel, front row third from left, with her management team at the Central Bank of Seychelles

Seychelles: Governor Caroline Abel, front row third from left, with her management team at the Central Bank of Seychelles


Next entering an IMF-supported program in 2008, the Seychelles has become a beacon of macroeconomic stability thanks to prudent reforms led by the Ministry of Finance and the Central Bank of Seychelles (CBS). As the country begins laying the groundwork for its radical national development strategy based on the blue economy concept, CBS Governor Caroline Abel expands on the key role her institution is playing in ensuring SMEs are able to access the finance required to take chance of the opportunities opening up in the blue economy, whilst discussing whether Seychelles can be viewed as a role model in terms of female empowerment in the banking sector.

2015 was generally a positive year for the Seychelles’ economy, with increase of additional than 4%, foreign exchange reserves at a seven-year high and the deficit stock reduced to 62% of GNP. How has the Seychelles been affected by world turbulences and how do you assess its capacity to weather external shocks?

The government has been committed to its reform program since 2008, and the principle of discipline has become well enshrined. There were some positives for us in terms of the world economy last year, particularly in relation to falling commodity prices. Being a net importer, the reduction in prices on international markets resulted in positive outcomes for us. There was a reduction in terms of the foreign exchange required to buy our imports, and as a result we were able to enhance our foreign currency reserves. So, from a resilience perspective, last year put us in a very strong position with regards to foreign currency reserves. We ended the year with approximately $536 million in reserves, which equates to 4.9 months of import cover. At the same time, the government budget remained disciplined.

Despite the concerns from the eurozone, which had the potential to impact on our tourism sector, our tourism industry actually did very well last year and the number of arrivals grew by 19%. Despite the euro-dollar parity problems, revenues fell only 1.4% in dollar terms. So far, we have not seen any major problems, although in some ways the divergent monetary policies did affect us because despite having strong forex reserves, we are not necessarily getting the best returns on what we have. As a result, we are undertaking some initiatives to make the holding of reserves additional efficient, and we did see some positive results in Q4 of 2015, so we are optimistic on the reserve management side.

From a country perspective, macroeconomic stability is well enshrined. We remain disciplined at the Central Bank and we coordinate efforts with the Ministry of Finance, Trade and Blue Economy to achieve stability because one of the cornerstones of our reforms has been the liberalization of the foreign exchange market. We have had a floating currency since 2008 and this is a key signal for the markets that we are prioritizing stability. Whenever the Central Bank of Seychelles foresees certain pressures, we act accordingly to ensure that there is all-round stability. For the private sector this is extremely significant.

The major challenge that we have domestically is how to promote small and medium-sized enterprises (SMEs), given that major projects have by presently happened, particularly in the tourism sector. SMEs are the ones that will drive the increase of the next, particularly in the blue economy. The challenge for SMEs traditionally has been the lack of access to credit. There are a lot of initiatives that we are undertaking to change this. We have put a plan in place to develop the financial sector further so that this constraint can be reduced over time. There are new services that we would like to see developed within our banking and financial services industry. We have put proposals forward and we are being assisted by development partners, particularly the World Bank, the Investment Climate Fund and the African Development Bank, so that experts can come in to assist us to develop new tools to facilitate access to finance for our SMEs.


Do you see a lot of opportunities for SMEs within the blue economy?

Yes, some initiatives have by presently started to happen with the Ministry of Fisheries and Agriculture. One of the challenges for us in the fishing industry is that it has before been focused on industrial fisheries and there has not been a lot of room for local involvement. In the semi-industrial and artisanal areas of fisheries, we are trying to promote local involvement in creating price addition. We want to create additional products that can be exported. To date, apart from canned tuna, we mainly export unprocessed fish and the price is added elsewhere. The government’s focus is on creating products from our fish to improve revenues in the sector. This is where the economy is significant so the necessary capital can be sourced for those companies interested in taking chance of such opportunities.

It is completely expensive to invest in vessels and the necessary machinery. This is why we are putting new services in place to make it easier for SMEs to access credit. We have had conversations with other small jurisdictions like ourselves to learn about the challenges of small businesses at the same time as it comes to accessing credit. This is where we have approaching up with new initiatives and to ensure these initiatives have the necessary funding.


The blue economy as well provides scope for much bigger investments, for example in marine infrastructure and the extraction of marine based natural resources. What are the major challenges that the Seychelles faces in funding major infrastructure projects and how are these being addressed?

On the domestic front it has always been a major challenge to fund such projects, and the government and private sector have always sought financing for such projects overseas. We are presently encouraging our banks to widen the scope of the services they offer. Since the economic reform process started in 2008, our own banks have not fully woken up to the fact that the economy has changed. The reforms are presently well established and it is significant that banks diversify. We are presently seeing banks develop new products and adapt to the modern realities.

In relation to the blue economy, we are looking to increase efficiency in renewable energy. Although energy costs have been moderated by falling oil prices, we have to think long term. Fuel-based electricity generation is completely expensive in the long term, so there is a push for renewable energy and the economy is responding to that. One of our banks recently launched a green loan product towards projects related to renewable energy. We are as well seeing a drive towards encouraging businesses to install solar panels and adopt energy efficient practices.


Last year, Afreximbank selected the Seychelles as the initial beneficiary of its blue economy strategy. Can you elaborate on your work with Afreximbank?

We are pushing a lot for capacity building in the financial sector. On behalf of the government, Central Bank is a shareholder in Afreximbank, and I have as well sat on the board of Afreximbank for the completed three years, so we have the opportunity to leverage on this institution’s expertise in trade finance and capacity building to prepare our financial sector for the realities of the blue economy.


What is your assessment on the evolution being made towards enhancing financial inclusion in the Seychelles and what role in technology playing in increasing banking penetration here?

Before, our banks were perhaps guilty of not investing in new technology. Presently they recognize competition. Before 2015, banks were the only institutions that could offer payment services but we reviewed the legal framework so that non-banks could as well enter this sphere. Last year we licensed a telecoms company to offer mobile payment services. Presently we are seeing banks going for internet banking, and by the end of this year we should see additional offerings in mobile banking.

We have a strategy document that has just been revised for the next four years to improve the payment services infrastructure. The Central Bank itself has put in place two platforms, one for the electronic clearing home that was established in 2012, and the following year we put in place a platform for electronic fund transfers in the domestic currency. This is currently being used by the banks, but by the end of this year we will extend it to all clients so they will not need to physically come to the banks for fund transfers. This will be beneficial for small businesses because in the Seychelles people traditionally go to the banking hall for their needs, but this leads to long queues and inefficiencies.

We are encouraging the economy to utilize technology to improve efficiencies and we believe that licensing non-banks for payments has helped to encourage a transition towards better use of technology.


In other African nations, it is often women who face better challenges at the same time as attempting to access finance or the formal economy. How do you assess the situation in the Seychelles for women in particular at the same time as it comes to credit and finance?

You will see no divergence between the genders. Usually, as any minute at this time as you enter the world of work you will open a bank account, or your parents will have opened one for you even before that. In the Seychelles the issue is not necessarily inclusion or exclusion like we see in other parts of Africa. The problem here is how to diversify the channels to serve various groups. For example, pensioners are usually still accessing their funds by cash. As I mentioned before, small businesses are still visiting banking halls with hard cash. We want to bring financial services closer to the people. Thanks to the changes in the payment system law, we are seeing banks and non-banks bringing in new services that address these constraints and bring down the cost of financial services. At present, banks charge substantial fees and there is a need to reduce this so that it helps in the in general cost of doing business. By bringing in competition, we hope this will help.


You are the initial ever female Governor of the Central Bank. To what extent can we consider the Seychelles as a model example of women’s empowerment in the workplace, not just in Africa but internationally?

At the same time as I look at the Seychelles, I think all of us are given equal opportunities at the same time as it comes to studies and work opportunities. What we have seen in recent times is perhaps the women pushing additional than the men in their careers. Men have started to take a additional laidback position, and studies are taking place to ascertain why. If I look at my mum’s generation, women were still at home looking next the children and the men would be out at work. But we started to see a change around the 1990s, at the same time as additional women started going to work. Childcare centers and other incentives were put in place to encourage women to work. Presently you rarely meet Seychellois women who do not work at all. But the opportunities were always there for both.

Here at the Central Bank, our workforce is approximately 75% female. Even at the same time as we advertise for new jobs, most applicants are women. Sometimes the heads of various departments ask if we can actively try to appoint a man to a certain position, but initial we have to see if any men apply!


You joined CBS in 1994 and worked your way up to its highest position over two decades. What would you say is the greatest lesson you have learned on your rise to the top?

You have to be focused at all times. In this position at the Central Bank you need to be alert and you need to respond quickly.

I was lucky that I had a great mentor in my early years. At the same time as I started I was a clerk, and again I spent time in the various divisions. I again had the opportunity to choose which division I wanted to settle in. I chose research and statistics as my area as I had studied economics. The governor back again was my mentor who pushed me. In the beginning I did not like talking in front of my senior colleagues. I would sit in meetings and listen but I would not express my views. However, at the same time as I left meetings I would put in writing the things that bothered me. I was called to the governor who asked why I did not raise my voice within the conference itself. I realized I had to take onboard what he had said and from again on I forced myself to raise my voice.

As well, within the Central Bank we have a lot of programs to build the personal skills of our staff. We do a lot of work with external stakeholders so we give our staff the ability to negotiate and we as well provide training in etiquette. We build the person. As part of our succession plan, we make sure that in any given year we know where each individual is in terms of their development, not just in terms of their career progression but as well in terms of their leadership skills, because at any given time they may be called upon to assume higher responsibilities. This is the journey I went on until 2012 at the same time as I was called upon to assume the top position. For me it was not difficult because I was ready, thanks to the journey I had been on by presently with the Central Bank.

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