Eastern Africa's Manufacturing Sector: a National Validation Workshop on November 12Th 2013
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Eastern Africa’s Manufacturing Sector Promoting Technology, Innovation, Productivity And Linkages SEYCHELLES COUNTRY REPORT October 2014 EASTERN AFRICA’S MANUFACTURING SECTOR Promoting technology, innovation, productivity and linkages SEYCHELLES COUNTRY REPORT October 2014 EASTERN AFRICA’S MANUFACTURING SECTOR - SEYCHELLES COUNTRY REPORT THE AFRICAN DEVELOPMENT BANK GROUP The production of this report has been coordinated by the African Development Bank (AfBD). Designations employed in this publication do not imply the expression of any opinion of the institution concerning the legal status of any country, or the limitation of its frontier. While efforts have been made to present reliable information, the AfDB accepts no responsibility whatsoever for any consequences of its use. Vice President: Zondo Sakala Regional Director (EARC): Gabriel Negatu Lead Economists: Stefan Muller, Abraham Mwenda Chief Regional Economist and Task Manager of the Report: Tilahun Temesgen Senior Country Economist: Susan Mpande Copyright 2014 – AFRICAN DEVELOPMENT BANK GROUP Photo Credits: AfDB photo files. PUBLISHED BY African Development Bank Group – Eastern Africa Regional Resource Centre (EARC) Khushee Tower Longonot Road, Upper Hill Nairobi, Kenya Phone: (254) 20 2712925/26/28 Fax: (254) 202712938 Email: [email protected] Website: www.afdb.org TABLE OF CONTENTS Executive Summary..................................................................................................................................................................ix Introduction..............................................................................................................................................................................xii 1 The Current Status of Manufacturing in Seychelles................................................................................................................1 1.1 Overview of Economy........................................................................................................................................1 1.2 Descriptive overview.........................................................................................................................................3 1.2.1 Size of manufacturing sector in the economy ..........................................................................................3 1.2.2 Structure of the manufacturing sector.....................................................................................................7 1.3 Estimate of competitiveness and comparative advantage...................................................................................15 1.3.1 Overall competitiveness of the manufacturing sector............................................................................15 1.3.2 Competitiveness of key manufacturing sub-sectors..............................................................................18 2 Explaining competitiveness and comparative advantage.....................................................................................................21 2.1 Enablers for the Manufacturing Industry.............................................................................................................21 2.1.1 Overview...........................................................................................................................................21 2.1.2 Legal and regulatory environment......................................................................................................22 2.1.3 Industrial, innovation and manufacturing sector policies.........................................................................23 2.1.4 Incentives for the manufacturing sector...............................................................................................24 2.1.5 Support institutions..........................................................................................................................25 2.1.6 Infrastructure: Energy, Water, Transport and Communication.................................................................27 2.1.7 Trade logistics...........................................................................................................................29 2.1.8 Access to finance..............................................................................................................................30 2.1.9 Education, training and skills level........................................................................................................31 2.2 Product Diversification and Structural Transformation of the Manufacturing Sector...................................................3 3 2.2.1 Product diversification........................................................................................................................33 2.2.2 Structural transformation....................................................................................................................37 2.3 SWOT analysis of the manufacturing sector in ...................................................................................................39 2.3.1 Key sub-sector 1: Processing and preserving of fish and fish products....................................................39 2.3.2 Key sub-sector 2: Beverages..............................................................................................................41 2.3.3 Key sub-sector 3: Essential oils and coconut oil....................................................................................43 2.3.4 SWOT analysis of manufacturing sector in Seychelles ...........................................................................45 3 Policy Options: Harnessing Opportunities and Easing the Constraints to Manufacturing in Seychelles................................49 3.1 Long-term vision.............................................................................................................................................49 3.2 Structural transformation..............................................................................................................................49 3.2.1 Overall economic framework..............................................................................................................50 3.2.2 Population growth and workforce........................................................................................................50 African Development Bank Group I EASTERN AFRICA’S MANUFACTURING SECTOR - SEYCHELLES COUNTRY REPORT 3.2.3 Linkages to agriculture, resource base and services...........................................................................51 3.3 Harnessing technology, innovation, productivity, and linkages.............................................................................51 3.4 Improving the Business Enabling Environment..................................................................................................52 3.4.1 Basic backbone infrastructure services provision.................................................................................52 3.4.2 Services sector..................................................................................................................................52 3.4.3 Public sector.....................................................................................................................................53 3.5 Scope for benefits from regional integration.......................................................................................................53 3.6 Lessons of experience....................................................................................................................................53 4 Conclusions, Road Map and Action Plan..............................................................................................................................57 4.1 Conclusions..................................................................................................................................................57 4.2 Road Map and Action plan...............................................................................................................................57 References..............................................................................................................................................................................62 ii African Development Bank Group LIST OF TABLES Table 1: Seychelles Rupee's nominal and real effective exchange rate, 2000-2012 (2007 = 100)......................................................1 Table 2: Composition of Seychelles GDP in %, 2000-2011............................................................................................................2 Table 3: Manufacturing, value added (MVA) in Seychelles, 2000-2011............................................................................................4 Table 4: Employment in the manufacturing sector in Seychelles, 2000-2012...................................................................................5 Table 5: Seychelles exports of manufactured products, 2001-2012..............................................................................................5 Table 6: Manufacturing output, per sub-sector (2004-2011)..........................................................................................................8 Table 7: Number of manufacturing firms in Seychelles, 2010-2012............................................................................................... 12 Table 8: Employment per manufacturing sub-sector