Cabo Verde: African development bank to fund $10M support to counter inflation
The African Development Bank (ADB) will provide funding of US$10 million (9.9 million euros) to Cabo Verde to support measures to mitigate the crisis caused by rising prices, the prime minister announced on Monday
“It was agreed to provide budgetary aid of US$10 million to support Cabo Verde in this phase, to support measures to deal with the inflation crisis and a number of projects that are also underway,” said the prime minister, Ulisses Correia e Silva, in a statement to journalists after a meeting last Saturday in Côte d’Ivoire with the president of the ADB, Akinwumi Adesina.
Measures to mitigate increases in fuel prices due to the conflict in Ukraine will require a financial effort of 45.3 million euros from the state of Cabo Verde, according to industry, trade and energy minister, Alexandre Monteiro, at a press conference earlier this month to announce new measures to mitigate the impact of the war, on the day that the average price of fuel on sale in the country rose by over 25 percent, to be in force during the month of July.
The archipelago is facing a deep economic and financial crisis, stemming from the sharp drop in tourism demand since March 2020, due to the Covid-19 pandemic.
In 2020, it experienced a historic economic recession, equivalent to 14.8% of GDP, followed by a 7% growth in 2021 driven by the recovery of tourism demand. For 2022, due to the economic consequences of the war in Ukraine, namely price escalation, the government lowered its growth forecast from 6% to 4%.
According to the head of government, the ADB is an institution with which “Cabo Verde has very strong relations in terms of investment and funding”.
“We must remember that the port of Maio is financed by the ADB, the Technology Park and other programmes that will essentially target the value chain in the agriculture sector. There is also a programme aimed at youth entrepreneurship, which is being worked on, finalised to be implemented,” Ulisses Correia e Silva said today.
The prime minister had previously announced that the president of the ADB had accepted the invitation of the government to inaugurate, in September, the works of the port of Maio.
Maio island has around 7,000 inhabitants and is the third least populated in the archipelago. It has been famous for its salt extraction activities since the 17th century.
The work to refurbish Porto Inglês, on the island, is one of the largest public contracts underway in the country and has been undertaken since 2019 by Teixeira Duarte, in consortium with another Portuguese company and a Cabo Verdean company, awarded for 1.910 million escudos (17.2 million euros).
The work is part of the project for “Expansion and modernisation of the ports of Inglês (Maio island) and Palmeira (Sal island), for 35 million euros, with funding of 50% from the ADB.
The contract, with an estimated contractual duration of 18 months, is being carried out by Portuguese companies Teixeira Duarte (37%) and SETH Sociedade de Empreitadas (33%), together with Armando Cunha Cabo Verde SA (30%).
According to previous information from the government, the two work contracts of the project funded by the ADB will increase the level of service of the ports on the islands of Maio and Sal, and “improve the living conditions of the people in the direct area of influence” of the work.
The improvement will be more evident in Maio, where the ADB has provided an additional 1.5 million euros for investment in the port access road and a programme to support young people and women on the island.