2023
Seychelles’ fisheries sector ranks 2nd to tourism in terms of GDP contribution. Amidst high operating costs, rising electricity prices, and constraints faced by SMEs in accessing financing, the government has introduced different types of subsidies to help businesses stay afloat. Given limited government resources, however, optimization is key to accomplishing priority blue economy objectives. Hence, the Ministry of Fisheries and Blue Economy commissioned this report to quantify public sector support. The report aims to document where fishery-related subsidies were allocated between the years 2014 and 2021 and provide preliminary analyses of their environmental and socioeconomic impacts.
According to the findings, subsidies from the Seychelles Government are either directed towards individual operators or the fisheries sector as a whole. The former are provided through direct payments, such as grants for new vessels, income guarantees, and vessel decommissioning programs, or through cost-reducing transfers that, as the name implies, cut down the operational costs of running a business within the sector. On the other hand, subsidies going to research and management expenditures, marine protection, and infrastructure fall under general services.
In total, government support for fisheries for the years 2014-2021 was at least SCR 1.3 billion. The annual total ranged from SCR 108.4 million in 2014 to 200.5 million in 2019, with the annual average being SCR 163.4 million. General services accounted for 67% (SCR 871.8 million) of the total provided government support, while direct subsidies and cost-reducing transfers accounted for 33% (SCR 435.3 million). The latter mainly goes to the artisanal sector, which accounts for 58% of the subsidies, whilst semi-industrial and fish processing share was at 29% and 13%, respectively.
Comprising 25%, infrastructure support was the highest form of total subsidy provided by the government, ranging from SCR 3.2 million in 2014 to SCR 23 million in 2021, with the highest spending of SCR 63.9 million recorded in 2019. At 22% of the total subsidy, the second highest budget allocation went to fuel, averaging SCR 35.4 million annually. The government has also made significant investments in fisheries management, which represented the third highest subsidy making up 20% of total subsidy with annual average spending of SCR 32.2 million.
While subsidies allocated to general services delivered impacts that resonated throughout the sector, the study found that cost-reducing transfers generally yielded marginal improvements despite the magnitude of its allocation. The latter was also linked to biodiversity risks, as sustainability concerns have been raised on demersal fishing activities potentially exerting high extraction pressure on deep-sea ecosystems.
These findings highlight the importance of reviewing current subsidy arrangements to safeguard the environmental sustainability of marine resource utilization while optimizing overall national gains. Hence, the study recommends further research on the feasibility and impacts of complete or phased removal of fuel subsidies on individual operators. To complement such a study, it was also suggested to revisit management measures and evaluate their adequacy in comprehensively protecting marine resources. This was recommended to happen alongside improving data reporting and transparency, and efforts towards better monitoring and evaluation of the impacts of government support.