Like many other countries around the world, Seychelles is facing several overlapping crises. First, the post-pandemic recovery has been slower than anticipated, and the government is yet to regain its growth momentum. Then, the war in Ukraine triggered a cascade of economic shocks, including rising commodity and fuel prices and double-digit inflation, even in developed economies. Finally, climate change poses a persistent threat to the country whose economy relies heavily on natural resources. With this backdrop, building a sustainable, forward-looking economy becomes imperative, and in Seychelles, this economy must be blue.
To commemorate the fisheries week, SeyCCAT has invited Jean-Francois Ferrari, Minister for Fisheries and the Blue Economy, to share his views on the blue economy in Seychelles, the role of fisheries, and how SeyCCAT’s innovative financing models, like the Blue Grants Fund, can support the country on its development path.
SeyCCAT: Minister Ferrari, when thinking about the Blue Economy, what do you see as immediate priority areas and what are the long-term, strategic goals?
J-F. Ferrari: Considering our economic perils and urgency caused by the pandemic, the main focus is to secure our revenue streams and people’s sources of livelihood, and we need to do it fast.
The immediate priority is to strengthen the existing blue sectors before we start investing in new ventures. For example, we are working on boosting our fisheries, ports, and even tourism and agriculture to some extent. These sectors are already established but the lack of consistent innovation made them unsustainable. With the right measures in place, we can turn these sectors around relatively fast. And for this we are looking at the Blue Economy again, specifically at research, technical know-how, and sustainable business models. Applied to the lagging sectors, this knowledge can help transform their value chains, generate employment, and make these economic spaces profitable.
Another priority is to transition to sustainable fisheries. Thanks to the fisheries’ crucial role in the economy of Seychelles, there is an established pathway and a body of research for this transition. Interestingly, some studies have highlighted economic opportunities that have already received significant groundwork. For example, there is an increased focus on value-adding services in the fisheries sector, and we have already secured funds under innovative financing initiatives that can be allocated for such programs.
As for the long-term strategic aspirations, we would like to tap into emerging sectors such as marine biotechnology, extractive industries, aquaculture, renewable energy, and research and development.
We have already made some steps towards these new sectors. For example, through a project grant received from the African Development Bank, we are working to advance marine biotechnology. Another example is the recent launch of the aquaculture sector in partnership with the Seychelles Fishing Authority and the Seychelles Investment Board.
Working in tandem with our partners, we have developed a business offer for local entrepreneurs, that allows them to skip costly and technology-intensive early steps (such as hatcheries) and focus on value-adding services down the value chain, such as growing fish to maturity and securing distribution to international markets.
In the future, these emerging sectors could offer additional sustainable revenue streams and help diversify our economy, making it less vulnerable to economic shocks and external influences.
SeyCCAT: Minister, what do you think are the biggest obstacles for developing a sustainable ocean-based economy in Seychelles and where do you see the opportunities?
J-F. Ferrari: One of the biggest obstacles, in my view, is the mindset. It is also the root cause of other challenges. People of Seychelles need to understand that they have an instrumental role to play in our shared development. For some, the Blue Economy is a fancy term that they cannot relate to, while others equate the concept with marine conservation, negating the entire “economy” part.
Also, many local entrepreneurs are not risk-takers and often prefer maintaining the business status quo. There are historic reasons for this behavior, but it prevents us from fully embracing the innovation offered by the Blue Economy, including new business models.
On the flip side, mindsets change, and I hope that with investment in public outreach and education, we will see more Seychellois businesses embracing change.
Finally, there is also an issue of resources – both human and financial, which is a shared challenge among Small Island Developing States. This has been accentuated even more since Seychelles graduated as a high-income country. This status disqualifies us from previously available funding opportunities that could have been used to invest in technology and catalyse innovation.
And it brings me to opportunities. To overcome our resource limitations, we have leveraged external partnerships. Thanks to Seychelles’ good international standing and pioneering use of sustainable finance (the Blue Bond and the Debt-for-Nature Swap), we have received a lot of support for our Blue Economy work.
Our country is seen as a Blue Economy leader among small islands, and it is further emphasized through our strong international outreach (including the great work of SeyCCAT) that helped us build a solid reputation.
This, combined with a strong track record in project implementation, makes Seychelles attractive for funding, especially from impact investors looking to pilot new concepts and secure good publicity.
Additionally, Seychelles boasts a huge Exclusive Economic Zone (EEZ) and ocean which constitutes about 99.9% of the territory. Just this fact alone brings ample opportunities for the development of a sustainable ocean economy.
SeyCCAT: How do you see the role of fisheries?
J-F. Ferrari: My time in office has reinforced my conviction that both fisheries and the Blue Economy are instrumental for the Seychelles’ economic development. However, it is important to understand the multi-sectoral nature of the Blue Economy. It is a big umbrella concept that covers different economic activities connected to the ocean, including fisheries, marine conservation, tourism, aquaculture, marine energy, technology and many more. In Seychelles, of course, fisheries are of paramount importance.
Fisheries have been traditionally an important economic activity; even more so since the development of industrial tuna fishing in the 1980s. In Seychelles, fisheries account for approximately 90% of the total export revenue. But the sector is struggling, and profits have been going down. To turn it around, we need to modernize the sector and apply the Blue Economy principles, including a transition to sustainable, well-managed fisheries.
Studies such as the Value Chain Study commissioned by the SWIOfish3 have highlighted several areas of opportunity for the sustainable growth of the fisheries sector, and we are taking these findings on board.
For example, to increase the profitability of our fisheries, we need to switch our export model from raw products to products farther down the value chain. Fostering domestic value chains will help increase profit margins and economic benefits from the sector.
While fisheries remain a priority sector where we can have quick gains, it is not the only one that we are looking into. For example, we need to advance marine conservation, both to protect our natural heritage and to ensure that we are not exhausting our ocean resources, and we can continue advancing our economy not only today but tomorrow and a decade from now.
To give some food for thought: a study financed under the Seychelles-European Union’s Economic Partnership Agreement, pinned the blue economy’s contribution to GDP at approximated 50%, for the years 2017-2019. In other words, half of our economy is already Blue.
SeyCCAT: Where do you see cooperation opportunities between SeyCCAT, and the Blue Grants Fund specifically, and the Ministry?
J-F. Ferrari: The Ministry, through the Department of the Blue Economy, oversees the SWIOfish3, which is a World Bank project that facilitates our transition to sustainable fisheries. The Blue Bond is a component of SWIOfish3; US$3 million of its proceeds is managed by SeyCCAT as the Blue Grants Fund. In this respect, there is already some cooperation between the Ministry and SeyCCAT. This cooperation is progressing well as the Department of the Blue Economy assists in the evaluation of the BGF projects and the SWIOfish3 project team ensures the continuity of the BGF activities and readily updates the Department.
We have also worked with SeyCCAT on Debt Swap proceeds projects, including preparing project concepts and resource mobilization plans. I am looking forward to expanding our cooperation in the future, building on our shared strategic objective and dedication to Seychelles’ prosperity.
SeyCCAT: Thank you, Minister. At SeyCCAT we are also looking forward to more opportunities to expand our partnership
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Prepared by Ekaterina Sleta