Cape Verde: Government wants public debt at 100pct of GDP within three years

Cape Verde’s government foresees that the weight of public debt will fall to 100% of GDP within three years and in 2020 intends to repay over 11.7 billion escudos (€106.1 million).

The forecasts are in the draft State Budget for 2020, approved in general by parliament tomorrow.

Deputy prime minister and minister of finance, Olavo Correia, said that international organisations have pointed to extraordinary progress in the evolution of the country’s public debt in recent years.

According to the government proposal, the State Budget for next year presents a budget deficit of 3,569 million escudos (€32.3 million), raising the total value of net borrowing requirements to over 8,483 million escudos (€76.9 million).

After a peak of 128.3% of GDP in 2016, the stock of Cape Verde’s public debt fell to around 120% in 2018 and 2019, with the report for next year stressing the imperative to contain the propensity to excessive public debt and forecasting 118.5% of GDP in 2020.

“Political measures should lead to the reduction of debt to GDP to a level equal to or less than 100% in 2023/2024 and maintain the risks and costs associated with indebtedness at an adequate and bearable level”.

The government foresees the repayment of 7,064 million escudos (€64 million) of internal debt and 4,645 million escudos (€42.1 million) of external debt for 2020.

Overall, the proposed budget is 73 billion escudos (€663 million), 2 billion escudos (€18 million) more than in 2019, and provides for GDP growth of 4.8 to 5.8% compared with 2019.