End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF's Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
- IMF team reaches a staff level agreement with the Cabo Verdean authorities on the completion of the first review of the Extended Credit Facility arrangement signed in June 2022.
- Despite a challenging global economic environment, Cabo Verde continues to make good progress in implementing its economic reform program to reduce the fiscal deficit, preserve debt sustainability, protect vulnerable groups, and foster higher and more inclusive growth.
Praia: An International Monetary Fund (IMF) team led by Justin Tyson conducted a mission in Praia from November 2-11, 2022, to discuss the implementation of Cabo Verde's economic reform agenda under the Fund-supported program. The IMF Executive Board, on June 15, 2022, approved a 36-month arrangement under the Extended Credit Facility (ECF) for Cabo Verde in an amount equivalent to SDR 45.03 million (190 percent of quota or about US$60 million at the time of approval), to help fill financing gaps together with the support of continued financing from Cabo Verde's development partners (seePress ReleaseNo 22/2022). At the end of the mission, Mr. Tyson issued the following statement:
"Following productive discussions, the IMF team and the Cabo Verdean authorities reached staff-level agreement on the completion of the first review under the ECF arrangement. This agreement is subject to approval by the IMF Executive Board in January 2023. Upon completion of the review, SDR 11.26 million (about US$16 million) will be made available to Cabo Verde, bringing cumulative disbursements under the program to around US$32 million."
"The Cabo Verde economy is recovering from the impact of the COVID-19 pandemic. After contracting by almost 15 percent in 2020, the economy recorded 7 percent growth in 2021 and the recovery continued strongly over the first half of 2022 (about 17 percent y/y in the first half), supported by a rebound in tourist arrivals. Economic activity was supported by credit growth. Risks to the outlook remain elevated from the weak external environment, with higher global food and fuel prices also starting to push up inflation in Cabo Verde".
"Overall performance and progress on the reform program have been strong despite the challenges caused by the war in Ukraine, rising commodity prices and the lingering effects of the COVID-19 pandemic. All the quantitative targets assessed at end-June 2022 and structural benchmarks have been met."
"Preliminary data suggests an improvement in the fiscal position during the first half of 2022. The gains in tax revenues were broad based, driven by the rebound in economic activity and supported by policy measures. Fiscal risks from State-Owned Enterprises continue to be monitored closely."
"Monetary policy remains focused on safeguarding the peg and strengthening the policy framework. Reserves are at comfortable levels. The BCV is gradually unwinding COVID-19 related support, with the resumption of robust economic activity, and considering the liquidity in the banking system."
"The mission met with Prime Minister Ulisses Correia e Silva, Vice Prime Minister and Minister of Finance and Business Development Olavo Correia, Central Bank Governor Oscar Santos, Minister of Family, Inclusion and Social Development Fernando Freire, members of the Economic and Finance Committee of the National Assembly, other government and central bank officials, representatives of the private sector, and development partners."
"The team thanks the authorities for their open and constructive discussions and looks forward to continuous close cooperation as the program progresses."
