VICTORIA, Seychelles — President Patrick Herminie’s State of the Nation Address has placed Seychelles cost-of-living relief at the centre of the government’s economic agenda, announcing a phased series of measures that include the reduction of public bus fares from R10 to R8 starting February 2026, the expansion of the Seychelles Trading Company’s essential commodities list by 12 additional everyday products, the relaunch of the STC card for low-income households, and forthcoming VAT exemptions on key household goods. These interventions are underpinned by a remarkably stable monetary environment in which the Central Bank of Seychelles Monetary Policy Rate stands at a record-low 1.75%.
For the majority of Seychellois, who rely on public buses for daily commuting and imported goods for over 90 percent of their household consumption, the announcements could translate into tangible monthly savings at a time when Seychelles consistently ranks at the top of Africa’s cost-of-living index according to Numbeo. Workers, students, pensioners, and lower-income families stand to benefit most immediately from the bus fare reduction, which will progress further to R7 in 2027 and R6 in 2028, eventually freeing up additional disposable income for essentials such as education and healthcare.
The expansion of the STC essential commodities list to cover 12 more items will help stabilise grocery prices by shielding a broader range of everyday products from the volatility of import costs and currency fluctuations. The relaunched STC card provides subsidised access to these products for low-income households. VAT exemptions and reductions targeting key household items are to be phased in progressively during the financial year ahead, with specific goods and scales of reduction to be announced in coming months. The Central Bank’s latest data shows gross international reserves at US$886 million and net international reserves at US$732 million as of January 27, 2026, exceeding targets and providing a comfortable buffer. Total excess liquidity stood above R4.328 billion as of January 13, while inflation for December 2025 continued its downward trend following earlier pressures from utility adjustments and currency effects noted in recent International Monetary Fund reviews.
Seychelles has long operated with a structural paradox: high per-capita income driven by tourism and financial services coexists with high living costs rooted in near-total import dependence and geographic isolation. International Monetary Fund reviews under the Extended Fund Facility have praised strong programme execution and fiscal surpluses recorded in 2025, while also noting that the islands remain vulnerable to external shocks including slowdowns in European tourism and global price pressures.
The measures announced in the State of the Nation Address directly confront this duality. By focusing relief on public transport and food staples—the two largest daily expenditures for most households—the government is prioritising inclusivity and ensuring that macroeconomic gains translate into visible improvements at the family level. Policymakers have acknowledged that these steps are not a complete solution, and that medium-term efforts to diversify the economy, invest in renewable energy, and develop the blue economy remain critical to reducing import dependency over time.
With bus fares set to drop as early as next month, Seychellois commuters will have concrete evidence that the cost-of-living relief agenda is already moving from pledge to practice.
📷 Image source: Seychelles Public Transport Corporation — sptc.sc
