Seychelles President James Michel surprise announcement that he plans to leave office next month has shocked many in the Indian Ocean archipelago island and dealt a blow to the ruling party, Parti Lepep, that lost majority for the first time in history in parliament since it came to power in 1977.

Michel has been in office since 2004 and took the decision to step down on October 16 after his party lost to the Seychellois Democratic Alliance, the opposition coalition, in the parliamentary election held on September 8-10.

Parti Lepep, which means The People’s Party, won 10 parliamentary seats while the opposition took 15 seats.

Michel’s came about five months after parliament reduced the presidential term limits from three five-year terms to two five-year terms. The president was serving his third, Seychelles News Agency reported.

“After 12 years as president, the time has come to hand over the reins of power to a new leader. A new leader who will take Seychelles to the next frontier of its development,” AFP quoted Michel saying.

He was elected for the third-term in December, last year. He defeated Wavel Ramkalwan, the opposition leader by about 193 votes.

Danny Faure, the vice-president will succeed Michel for the remainder of the term. Presidential election is held after five years.

Ahead of the presidential election last year, the opposition said that the nation needed change. Parti Lepep claimed it would steer Seychelles to economic stability, BBC reported.

The opposition claimed that the economic growth had favored the rich while education system had deteriorated, coupled with an increase in drug abuse and social ills among its 93,000-people population, Reuters reported.

During Michel’s tenure, the nation recovered from the global economic crisis in 2008. Last year, World Bank classified Seychelles as a high income economy. Inflation rate also fell to 4.4 percent.

Seychelles depends on tourism and fishing as its major sources of foreign exchange.

Michel’s decision to step down represents a major challenge to the ruling party’s stay in power.

The opposition, already enjoying majority members in the parliament will hope to win the presidential election through Ramkalwan who had narrowly lost to Michel, in last year’s election.

The archipelago might also see its first female president through Alexia Amesbury, who became the first female presidential candidate last year.

Seychelles, made up of 115 islands has experienced political stability since 1977 when Parti Lepep came to power through a bloodless coup d’état. It has won the elections since multi-party democracy resumed in 1993.