Africa-Press – Cape verde. The Budget Support Group (GAO) will provide Cape Verde with between 50 and 60 million euros to finance the State Budget for 2024 (OE’2024), Deputy Prime Minister and Minister of Finance, Olavo Correia, announced today.
The government official was speaking at a press conference to review another mission to evaluate the performance of the group’s archipelago, made up of Spain, Luxembourg, Portugal, the European Union, the World Bank Group and the African Development Bank (AfDB), and that this year is presided over by Portugal.
“We are talking about estimates. It’s 50 to 60 million euros. We are working within this limit and if we can do better, even better for Cape Verde”, said Olavo Correia.
GAO provides financial support and technical assistance to the state budget through grants and loans in support of national development priorities.
During its last week-long mission that ended today, GAO discussed with the Cape Verdean Government issues related to macro-economic stability, the fiscal situation, public finance management, employment and employability, poverty reduction and social protection, energy transition, security, health, the blue economy, climate action and connectivity.
In the final statement, the group highlighted that the Cape Verdean economy is operating above its growth potential, reflecting the recovery of post-pandemic economic activity, despite the downward revision of the growth forecast for 2023 from 6.8 % to 5.7%.
He reiterated, however, the need to accelerate the process of economic diversification, including tourism, making reforms more structural for a more attractive, prosperous and dynamic business environment, boosting investment, contributing to job creation and inclusive sustainable growth.
On the other hand, the GAO recognized the progress made in the budget consolidation agenda in 2023 with higher-than-expected increases in revenue and contributing to the improvement of budget balances and reducing the need for domestic loans.
“Partners encourage authorities to continue revenue mobilization efforts, while intensifying measures to rationalize tax incentives,” said the statement read during the press conference.
The document also states that the GAO welcomes the update of the State Business Sector (SEE) reform agenda, highlighting, however, that there are still concerns regarding the fiscal risks associated with these companies, especially with regard to possible guarantees and capitalizations to support the investment plans of companies with lower profitability.
On the other hand, he reiterated the importance of accelerating efforts to improve the performance of SEE companies, which could contribute to strengthening the business environment in the country and boosting the development of the private sector.
At the level of public procurement, the GAO welcomed the progress in preparing the evaluation of the methodology for evaluating systems and the public contracting process, but expressed some concern about the recurrent use of contracting via direct award on an urgent basis imperative, which from the partners’ perspective could compromise the quality/price ratio of public acquisitions.
Another concern expressed has to do with the increase in the failure to present accounts on time by institutions and autonomous entities.
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