Cabo Verde’s deputy prime minister, Olavo Correia, said after a meeting with the country’s president, Jorge Carlos Fonseca, that the economy is “full of confidence” and that the goal is for it to grow at 7% a year.
“The Cape Verdean economy, today, is to be trusted,” Correia said. “It is full of confidence, it is predictable and it is growing. We are growing at 5% a year, which is … above the average of African growth, but also of the world economy.
“We have a momentum that will take us to growth of 7%,” he concluded.
The deputy prime minister, who is also minister of finance, was received for a working meeting at the presidential palace in Praia, where he and Fonseca discussed the state of the country.
According to Correia, inflation in Cabo Verde is below 2%, while the budget deficit is less than 3% of gross domestic product and “on a permanent downward trajectory in the last three years”. The expectation, he added, is for an increase in investment from abroad, on the part of foreign companies and the diaspora, though this has not yet materialised.
Public indebtedness has meanwhile decreased to 124% of GDP from 130% three years ago – that is, during the current parliament – while the country’s international reserves are currently equivalent to five months of imports.
“The Cape Verdean economy is stable, it is growing, but we need to continue to do more, better and faster, so that we achieve economic growth of 7%,” Correia said. “But inclusive economic growth, which includes all Cabo Verde’s social sectors and all the islands and regions.”
At the end of the meeting, as is usual after this kind of event, the president did not speak to journalists.
However, the deputy prime minister explained that the meeting also served to provide the head of state with “all information” on the process of issuing a concession for the operation of private national airports, which the government intends to go ahead with later this year.
The International Monetary Fund on 15 July approved a policy coordination instrument for Cabo Verde that foresees the gradual elimination of subsidies to loss-making public enterprises and aid for the continuation of structural reforms.
The 18-month programme is to “leverage the reform programme of the authorities within the framework of the Strategic Plan for Sustainable Development and aims to enhance macroeconomic stability through fiscal consolidation and reforms that foster growth to support the sustainability of debt and budget,” a statement distributed earlier by the IMF reads. “The budgetary programme will be anchored in the primary balance [excluding interest on debt] and in eliminating, over time, budgetary support for loss-making public enterprises in a context of advancing reforms.”
The economic situation of Cabo Verde, which the IMF praised on this occasion, has improved in recent years, with the archipelago moving from 1% GDP growth in 2015 to around 5% projected for this year. This has been achieved with low inflation and a shrinking budget deficit, which is set to narrow to 2.2% of GDP this year from 4.6% in 2015.
PVJ/ARO // ARO.
Lusa
