No potential buyers come forward for privatisation of Cape Verde’s flagship airline

30 November 2011

Praia, Cape Verde, 30 Nov – Cape Verde’s Finance Minister, Cristina Duarte, said Tuesday in Praia that the government had had problems finding a foreign partner for privatisation of airline TACV for the last two years.

Duarte also said that the government would make every effort to restructure the company in 2012, but that, “the process has not been easy.”

The minister was commenting on a report from a mission of the International Monetary Fund (IMF), which made some recommendations to the Cape Verdean government, specifically increasing the rate at which public companies running at a loss are privatised.

At the end of a 15-day mission to the archipelago, the report prepared by the IMF technicians recommended the need to create enough room for growth of private credit and reducing the foreign debt/GDP ratio to less than 50 percent.

The IMF considered that the General State Budget “is being carried out in line with the broadened programme for public expenditure on infrastructure, essentially funded by highly subsidised foreign loans,” and called for, “parity of the currency to continue to act as an appropriate monetary anchor.”

According to the report, “containment by the government of its budgetary and monetary policy, at the end of 2011, helped to reduce the loss of reserves although deficits (…) have increased significantly compared to last year.” (macauhub)