Cabo Verde achieves goals agreed with the International Monetary Fund

31 March 2020

Cabo Verde has achieved all of the targets laid down in the support programme drawn up by the International Monetary Fund (IMF) and “with a strong performance,” wrote the deputy prime minister and minister of Finance on his official Facebook account, commenting on a statement issued in Washington.

In the statement, the executive board of the IMF said that the performance of the archipelago under the Policy Coordination Instrument (PCI) was “very strong”, and all quantitative targets were reached at the end of September 2019.

The exception, the statement said, was tax revenue, although it was only missed by a very small margin, due to the fact that rates on international trade were lower than expected.

The PCI is in force from July 2019 until January 2021 and is based on a request from Cabo Verde for assistance in the implementation of the country’s Strategic Plan for Sustainable Development (2017/2021).

This plan has five objectives – tax recovery and debt sustainability, restructuring of state enterprises, improvement of monetary policy structure and continued creation of reserves, promotion of the stability of the financial system, and the promotion of structural reforms to favour growth.

The IMF noted that the growth of Cape Verdean economy has been “robust,” reaching more than 6% year-on-year at the end of September 2019, with an estimate of 5.5% for the year bolstered by “strong activity in services, especially tourism, construction and industry.”

However, the IMF’s economic outlook for Cabo Verde in 2020 is overshadowed by the consequences of the current pandemic, which has halted tourist flows and suspended business activities, with the executive committee saying that in the mid-term the outlook remains positive, and growth is expected to resume in 2021 and return to pre-Covid-19 values of approximately 5.0%. (macauhub)