The Budgetary Aid Group (GAO) to Cabo Verde (Cape Verde) is concerned about the West African archipelago’s level of public debt, which has been increasing since 2008 and is expected to reach 106 percent of the country’s gross domestic product in 2016, according to the Cape Verdean press.
Citing a statement issued by the GAO, Cape Verdean newspaper A Nação said that the members of the group also noted inefficiency at some public companies, which remain a tax burden and risk to the State.
In the report on the latest mission to Cabo Verde (4 to 13 November 2013), which has just been published, the GAO started by noting the recovery of the Cape Verdean economy since the recession in 2009 and that growth reached 4 percent in 2011 due to “strong” levels of public investment.
“Official figures for 2012 and 2013 are not available yet, although some indicators suggest a cooling of economic activity,” the statement said. The GAO added that “confidence in business sectors such as tourism, transport and construction has deteriorated, as has foreign direct investment (FDI), which has fallen significantly.”
The members of the GAO said, however, that the outlook for 2014 “is still uncertain” considering the recovery of the Euro Zone, the archipelago’s main partner, and a continued expansionist tax policy at the same time as credit to the economy will continue to “retract” due to high levels of debt default.
Cabo Verde’s GAO’s members are the African Development Bank (ADB), the World Bank, the European Union, Luxembourg, Portugal and Spain. (macauhub)