Five Key Lessons: The case of the Seychelles

In 2023, the United Nations Development Programme (UNDP) supported the Government of Seychelles to complete a Development Finance Assessment (DFA). The DFA is the first step in the INFF process towards the development of a National Integrated Financing Strategy. The report highlights the need to expand local and international private sector investment in the national development priorities; recommends the establishment of a national Private Sector Engagement Strategy to facilitate structured dialogue with the sector; and the strengthening of the Public-Private Partnership (PPP) Unit. Such initiatives complement existing efforts to mobilize private sector capital, including legislation to encourage private sector investment and the design of the SDG Investor Map. 

A reflection on the DFA process in the Seychelles highlights five key lessons to promote ownership, coherence, and integration towards a robust INFF. 

1. Promote ownership through nationally led and inclusive processes:  The inception phase of INFF development is of paramount importance requiring foresight and long-term considerations. An inclusive and participatory process is, therefore, key to ensuring that the right stakeholders come together to optimize assessments, add value, and avoid duplication.

2. Multidisciplinary analytics can better inform planning: Risk assessments that go beyond economic analysis to include climate change impact and multi-hazard disasters, are important to identify areas of investment in infrastructure, and basic services that can drive sustainable development and economic growth. 

3. Integration into National Planning Mechanisms increases ownership: The INFF process is most impactful when embedded within a country’s existing planning and financing policy systems and the institutions that manage them. Integration with the public financial management (PFM) process, and linkages made to the broader national development priorities outlined in national development strategy documents, NDCs, disaster risk reduction strategies and climate change adaptation plans increases coherence and ownership.

4. INFFs can serve as a blueprint for innovative finance: In 2018, the Seychelles the Blue Economy Debt For Nature swap converted US$21.6 million of national debt in exchange for government commitment to safeguard 30 per cent of its Exclusive Economic Zone through Marine Protected Areas. The current INFF process can further advance innovation in non-traditional sources of financing, including blended finance mechanisms or green finance initiatives that align with a government’s conservation efforts to protect natural resources. 

5. Promote coherence and efficiency through integration with existing initiatives: Leveraging existing partnerships and ensuring coherence with ongoing capacity-building initiatives for INFF development and implementation is crucial. Peer-to-peer exchanges and learning enabled through south-south cooperation mechanisms also offer valuable insight into “lessons learnt” and facilitate more robust INFF development in SIDS.