Cabo Verde negotiates financial assistance programme with the International Monetary Fund

9 May 2018

The Cabo Verde (Cape Verde) government is negotiating a financial assistance programme with the International Monetary Fund (IMF) focused on public debt, Cabo Verde’s prime minister Ulisses Correia e Silva said in Lisbon on Tuesday.

“We are working with the Fund on a programme to pay off a portion of the external debt, which will have to be negotiated with the partners later,” the Prime Minister told Portuguese state news agency Lusa on the sidelines of his participation in the Horasis Global Meeting, in Estoril, Lisbon.

The aim, he said, is to “keep the downward trajectory of debt growth and get it to a sustainable level, below 100% and later to 60%, which has been set to ensure the macroeconomic stability of the indexation,” of the Cape Verdean currency to the euro.

Ulisses Correia e Silva said that Cabo Verde does not have a debt servicing problem, but there is a problem of debt stock, given that much of the financing obtained for the construction of infrastructure was granted under favourable conditions, with interest at below-market rates.

The Cabo Verde archipelago has a level of public debt that the IMF estimates will remain at 124.7% of gross domestic product this year and increase to 126.7% in 2019, causing the country to have the second largest debt as a percentage of GDP in sub-Saharan Africa. (macauhub)