Cabo Verde advised to solve the problem of loss-making public companies

10 November 2016

The Budget Support Group (BSG) urged Cabo Verde (Cape Verde) to settle “quickly the unsustainable financial situation” of public air transport and housing companies, saying that delays in restructuring represent “a big risk” to the economy, according to a statement published on Wednesday in Praia.

The statement from the BSG, whose members are the African Development Bank, World Bank, Luxembourg, Portugal and the European Union, was read at the end of the second annual assessment mission to Cabo Verde made by that body, which ended on Wednesday.

The issue involves public airline TACV and housing company Imobiliária, Fundiária e Habitat (IFH). For TACV “the continued subsidisation of operations may give the wrong signs to private sector interests.”

The BSG in 2016 has contributed to the Cabo Verde state budget through donations and loans, with about 26.5 million euros and the partners remain concerned about the “high budget deficit” and “rapid public debt accumulation public, recorded in recent years.”

Cabo Verde’s Minister for Economy and Employment, José Gonçalves, recently announced that in the first quarter of 2017, the government will present concrete solutions to solve the problems experienced by TACV, which are expected to involve reducing staff, among other measures.

Gonçalves added that the partners supporting Cabo Verde are already “worn out” with the restructuring of TACV, a process that has dragged on for more than 20 years, so now want a solution, especially as the company depends on these partners for funding. (macauhub)