Portugal analyses Caixa Geral de Depósitos taking stake in the Cabo Verde Sovereign Fund

10 May 2018

The Portuguese government is analysing a proposal submitted by its Cape Verdean counterpart for Portuguese state bank Caixa Geral de Depósitos (CGD) to acquire a stake in the Cabo Verde (Cape Verde) Sovereign Fund, the archipelago’s finance minister said on Wednesday in Lisbon.

Olavo Correia, speaking after a meeting with his Portuguese counterpart Mário Centeno in Lisbon, declined to comment on the content of the proposal, “which is being analysed,” giving assurances that the Cape Verdean government can guarantee the reimbursement of the securities to whoever buys them.

In July 2017, in statements to Portuguese state news agency Lusa, Olavo Correia expressed CGD’s willingness to take a stake in the Sovereign Private Investments Fund, with an initial capital of 100 million euros, which aims to allow companies to have access to the market and capital to finance larger investments.

The creation of the fund was announced by the Cape Verdean prime minister, Ulisses Correia e Silva, but details about its capitalisation and the conditions for access to the fund’s guarantees have yet to be known.

The Minister of Finance corrected the prime minister by stating that Cabo Verde has not asked for and will not request financial assistance from the International Monetary Fund (IMF), and rather will ask for support to “make the macroeconomic framework credible in the future, so that we can attract more investment, from residents, the diaspora and foreigners, to accelerate the country’s economic growth.”

On Tuesday, Cape Verdean Prime Minister Ulisses Correia e Silva said Cabo Verde was in talks with the IMF for a programme of financial assistance for public debt, estimated at 124.7% of GDP this year and 126.7%t in 2019, the second highest debt-to-GDP ratio in sub-Saharan Africa. (macauhub)