{
  "title": "IMF Executive Board Approves US$60 Million Extended Credit Facility Arrangement for Cabo Verde",
  "publication": "IMF News, June 15, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/06/15/pr22202-cabo-verde-imf-executive-board-approves-usd60m-ecf-arrangement",
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  "summary": "IMF Executive Board Approves US$60 Million Extended Credit Facility Arrangement for Cabo Verde",
  "publishDate": "2022-06-15",
  "sections": [
    {
      "heading": "Approval and Financing",
      "content": "- Executive Board approved a 36-month arrangement under the Extended Credit Facility (ECF) for Cabo Verde equivalent to SDR 45.03 million (190 percent of quota or about US$60 million).\n- Immediate disbursement: SDR 11.26 million (47.5 percent of quota, about US$15 million), fully usable for budget financing to support reform implementation.\n- Prior Fund support: Rapid Credit Facility in April 2020 (100 percent of quota, SDR 23.7 million, equivalent to US$32.3 million at the time of approval).\n- The ECF will help shore up international reserves, preserve debt sustainability, increase resilience to shocks (including climate change), and make growth more inclusive.\n- The financing package is intended to help mitigate the lingering impact of the COVID-19 pandemic and the spillover effects of the war in Ukraine, reduce the fiscal deficit and preserve debt sustainability, protect vulnerable groups, and support a reform agenda that leads to higher and more inclusive growth."
    },
    {
      "heading": "Program objectives and key policy actions",
      "content": "- Four main objectives aligned with the government’s medium-term economic development plan (PEDS):\n  - Strengthen public finances to preserve public debt sustainability and expand social safety nets.\n  - Reduce fiscal risks from public enterprises and improve their financial management and transparency.\n  - Modernize the monetary policy framework and improve the resilience of the financial system.\n  - Raise growth potential and build resilience to shocks through structural reforms and economic diversification.\n- Key policy actions under the program:\n  - Measures to boost revenue and improve the efficiency of spending.\n  - Strengthening state-owned enterprises to mitigate fiscal risks.\n  - Continue modernizing the monetary policy framework and safeguarding financial stability.\n  - Capacity development strategy aligned with the program.\n  - Specific measures mentioned: gradual and growth-friendly fiscal consolidation, increase social spending to protect vulnerable groups, strengthen tax administration, enhance public financial management, reform state-owned enterprises, bolster international reserves, carefully unwind crisis-related support measures, monitor non-performing loans, and further strengthen the AML/CFT framework.\n- Emphasis on climate adaptation given Cabo Verde’s high vulnerability to climate change."
    },
    {
      "heading": "Economic context and outlook",
      "content": "- Recent performance and shocks:\n  - Severe COVID-19 recession in 2020: about 15 percent contraction.\n  - Strong rebound in 2021: growth of 7 percent, supported by easing travel restrictions and a highly successful vaccination program.\n  - Growth forecast for 2022 revised downward from 6 percent to 4 percent due to spillovers from the war in Ukraine, higher commodity prices, weaker tourism prospects, and an ongoing five-year drought.\n- Balance and reserves impacts:\n  - Projected significant widening of the current account deficit to about 14.1 percent of GDP in 2022 and lower international reserves.\n  - Overall fiscal deficit expected to improve to 6.3 percent of GDP in 2022, from 7.3 percent of GDP in 2021."
    },
    {
      "heading": "Selected economic indicators (2019–27)",
      "content": "- Real GDP (annual percent change): 5.7; -14.8; 7.0; 4.0; 4.8; 5.5; 5.0; 4.5; (2027 value listed without number in table header)\n- GDP deflator: 0.6; -0.9; 1.8; 2.6; 2.0\n- Consumer price index (annual average): 1.1; 1.9; 6.5; 3.5\n- Consumer price index (end of period): 5.4\n- Exports of goods and services (annual percent change): 10.2; -58.7; 39.3; 11.2; 32.6; 11.0; 9.6; 9.0; 9.3\n  - Of which: tourism: 9.4; -69.1; 48.4; 14.2; 22.2; 18.7; 11.8; 8.7; (final years continue in table)\n- Imports of goods and services (annual percent change): 1.6; -23.2; 14.4; 5.8; 7.1; 6.4; 7.3\n- Money and credit (change in percent of broad money, 12 months earlier):\n  - Net foreign assets: 7.8; -6.6; 6.0; -10.6; 2.7; 2.1; 2.3; 1.3\n  - Net domestic assets: 10.3; -4.0; 12.2; 5.3; 4.6; 4.3\n  - Net claims on the central government: -4.8; -1.3; 0.7; 0.3; -0.1; -0.4\n  - Credit to the economy: 2.9; 5.1; 3.2\n  - Broad money (M2): 8.4; 3.8; 7.7; 6.8; 6.7; 6.6; 5.6\n- Savings and investment (percent of GDP unless indicated):\n  - Domestic savings: 37.3; 20.7; 31.0; 30.0; 35.2; 33.9; 35.3; 34.7\n  - Government (component): 0.1; -7.4; -4.5; -2.6; -1.8; 1.7; 2.5\n  - Private (component): 37.2; 28.1; 35.5; 37.0; 34.1; 33.6; 31.8; 32.3\n  - National investment: 37.1; 35.7; 42.3; 44.1; 41.4; 39.8; 39.9; 39.0\n- Savings-investment balance: 0.2; -15.0; -11.3; -14.1; -6.2; -5.9; -4.7; -4.6; -4.2; -3.4; -10.7; -6.7; -4.9; -3.2; -0.5; -4.3; -8.1; -2.7; -3.7\n- External current account (including official transfers): -2.5; -17.6; -14.2; -16.1; -7.2; -5.7; -5.6; -5.2\n- Overall balance of payments: -1.0; 1.5; 1.2\n- Gross international reserves (months of prospective imports of goods and services): 6.3; 5.2\n- Government finance (percent of GDP):\n  - Revenue: 26.8; 24.7; 22.6; 25.4; 24.8; 25.5; 25.9; 26.3; 26.5\n  - Tax and nontax revenue: 23.9; 21.4; 20.6; 23.5; 23.6; 24.4; 24.9; 25.7\n  - Grants: 1.0; 0.9; 0.8\n  - Expenditure: 28.5; 33.8; 29.9; 31.7; 30.4; 29.5; 27.3\n  - Primary balance: -6.4; -5.1; -3.6; 0.0\n  - Overall balance (incl. grants): -1.7; -9.1; -7.3; -6.3; -2.1; -0.8\n  - Net other liabilities (incl. onlending): -3.0; -1.2; -0.7; -0.2\n  - Total financing (incl. onlending and capitalization): 14.0; 6.2; 4.2\n  - Net domestic credit: 2.8; -0.3\n  - Net external financing: 1.4\n- Public debt stock and service:\n  - Total nominal government debt: 114.0; 142.6; 143.0; 145.9; 139.7; 132.5; 124.0; 116.2; 109.6\n  - External government debt: 82.6; 103.1; 101.5; 103.6; 97.7; 93.1; 88.4; 83.7; 79.6\n  - Domestic government debt: 31.4; 39.5; 41.5; 42.0; 39.4\n  - External debt service (percent of exports of goods and services): 14.8; 13.4; 17.7; 14.7; 9.5\n  - Present value of PPG external debt:\n    - Percent of GDP (risk threshold: 55%): 55.8; 70.3; 60.3; 55.9; 53.4; 51.4; 49.3; 47.3; 45.6\n    - Percent of exports (risk threshold: 240%): 119.9; 335.9; 208.1; 188.4; 145.8; 136.3; 128.4; 121.0; 113.7\n  - Present value of total debt:\n    - Percent of GDP (benchmark: 70%): 92.4; 105.4; 104.7; 97.9; 95.0; 90.5; 84.7; 79.7; 75.5\n- Memorandum items:\n  - Nominal GDP (billions of Cabo Verde escudos): 213.9; 180.7; 196.8; 213.8; 229.8; 247.7; 266.6; 285.5; 304.2\n  - Gross international reserves (€ millions, end of period): 666.1; 582.4; 591.3; 491.0; 544.3; 577.6; 623.3; 677.5; 710.3\n- Exchange rate note: The Cabo Verdean exchange rate has been pegged to the Euro since 1999, at a rate of 110.265 CVE/€.\n\nIMF Press Release No. 22/202\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/06/15/pr22202-cabo-verde-imf-executive-board-approves-usd60m-ecf-arrangement"
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    "Published: June 15, 2022",
    "Executive Board approved a 36-month arrangement under the Extended Credit Facility (ECF) for Cabo Verde equivalent to SDR 45.03 million (190 percent of quota or about US$60 million).",
    "Immediate disbursement: SDR 11.26 million (47.5 percent of quota, about US$15 million), fully usable for budget financing to support reform implementation.",
    "Prior Fund support: Rapid Credit Facility in April 2020 (100 percent of quota, SDR 23.7 million, equivalent to US$32.3 million at the time of approval).",
    "The ECF will help shore up international reserves, preserve debt sustainability, increase resilience to shocks (including climate change), and make growth more inclusive.",
    "The financing package is intended to help mitigate the lingering impact of the COVID-19 pandemic and the spillover effects of the war in Ukraine, reduce the fiscal deficit and preserve debt sustainability, protect vulnerable groups, and support a reform agenda that leads to higher and more inclusive growth.",
    "Four main objectives aligned with the government’s medium-term economic development plan (PEDS):",
    "Key policy actions under the program:",
    "Emphasis on climate adaptation given Cabo Verde’s high vulnerability to climate change.",
    "Recent performance and shocks:",
    "Balance and reserves impacts:",
    "Real GDP (annual percent change): 5.7; -14.8; 7.0; 4.0; 4.8; 5.5; 5.0; 4.5; (2027 value listed without number in table header)",
    "GDP deflator: 0.6; -0.9; 1.8; 2.6; 2.0",
    "Consumer price index (annual average): 1.1; 1.9; 6.5; 3.5",
    "Consumer price index (end of period): 5.4",
    "Exports of goods and services (annual percent change): 10.2; -58.7; 39.3; 11.2; 32.6; 11.0; 9.6; 9.0; 9.3",
    "Imports of goods and services (annual percent change): 1.6; -23.2; 14.4; 5.8; 7.1; 6.4; 7.3",
    "Money and credit (change in percent of broad money, 12 months earlier):",
    "Savings and investment (percent of GDP unless indicated):",
    "Savings-investment balance: 0.2; -15.0; -11.3; -14.1; -6.2; -5.9; -4.7; -4.6; -4.2; -3.4; -10.7; -6.7; -4.9; -3.2; -0.5; -4.3; -8.1; -2.7; -3.7",
    "External current account (including official transfers): -2.5; -17.6; -14.2; -16.1; -7.2; -5.7; -5.6; -5.2",
    "Overall balance of payments: -1.0; 1.5; 1.2",
    "Gross international reserves (months of prospective imports of goods and services): 6.3; 5.2",
    "Government finance (percent of GDP):",
    "Public debt stock and service:",
    "Memorandum items:",
    "Exchange rate note: The Cabo Verdean exchange rate has been pegged to the Euro since 1999, at a rate of 110.265 CVE/€.",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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