AfDB Approves €40 million Budget Support Loan to Cape Verde
Tunis, 29 October 2009 – The African Development Bank (AfDB) Group has approved a €40 million loan to Cape Verde to help the country respond to the impact of the global financial crisis while maintaining the momentum of its reform agenda. The loan will help to reinforce reforms, especially in the areas of public finance management and the business climate – the two components of the additional budget support to the Poverty Reduction Strategy Support Programme (PRSSP-II).
The impact of the economic and financial crisis, have seriously affected the tourism sector, the main driver of growth in Cape Verde. According to forecasts, the economic slowdown will persist in the second half of 2009 and in 2010. The budget support approved by the AfDB Board of Directors on Wednesday, 28 October 2009 in Tunis, is therefore designed to stimulate growth while enabling the government to continue implementing its economic and institutional reform programme and protecting hard-won gains.
According to Gabriel Negatu, AfDB Governance Director, “Cape Verde ranks amongst the leading performers in Africa today. Indeed, thanks to its sound economic and governance policies, the country has registered strong socioeconomic and governance results. The proposed additional budget support will help the country mitigate the impact of the financial crisis.”
In response to the financial crisis, the Cape-Verdean Government has put in place a series of counter-cyclical measures, such as easing the tax burden on economic operators, as well as reducing public spending. The Government’s strong commitment in implementing these measures is commendable and has brought progress in a relatively short time, as evidenced by the early signs of recovery.