World Bank helps Seychelles reform its social protection system

WASHINGTON, March 25, 2021 — The World Bank has approved a $30 million credit for the government of Seychelles as it strives to strengthen the efficiency and effectiveness of its social protection systems.

“This support will help align the social protection system with the country’s challenges, including demographic changes and post-COVID-19 recovery, while focusing on the multidimensional causes of poverty and exclusion,” Noted Erik von Uexkull, World Bank Country Representative for Seychelles.

Seychelles has a generous, comprehensive but fragmented social protection system, with no less than 30 programs ranging from universal pensions and social protection for the poor to programs targeting orphans and people with disabilities. In this context, the government of Seychelles has requested support from the World Bank to improve the efficiency and quality of its social protection system.

“World Bank assistance will support government efforts to improve the efficiency and effectiveness of existing programs, based on international best practices, so that a higher percentage of social protection expenditure is allocated to those in need”, Noted Edmundo Murrugarra, Senior Social Protection Economist at the World Bank and Project Manager. “There is a need to improve the social protection system to ensure that it distributes more resources to those living in the bottom 40% of the income distribution and to make it more efficient.”

The country spent nearly 7% of its GDP on social protection in 2020, higher than the averages seen in sub-Saharan Africa, small-state islands and upper-middle-income countries, even taking into account effects of COVID-19.

While the current design of the social protection system is recognized for its impact on poverty reduction, it must be adapted to the new demographic context”, added Anita M. Schwarz, World Bank Lead Economist and Project Co-Lead.Current social protection expenditures are significantly biased in favor of the elderly population. The elderly make up 9% of the population, but they make up 22% of all beneficiaries of non-contributory programs and receive up to 42% of total benefits.

Joel C. Hicks