Africa-Press – Cape verde. Cape Verde ends the year 2023 with the “pleasant” news of the country’s selection for the third compact of the Millennium Challenge Corporation (MCC) aimed at regional economic integration, the amount of which has not yet been disclosed.
The decision was communicated on December 14th and, according to the MCC, Cape Verde was selected in recognition of the country’s clear commitment to democratic governance and its significant development and poverty reduction challenges.
The news was celebrated by several political actors who classified the feat as “a great victory” for the country, which had been awarded similar packages in 2004 and 2011, in the amounts of 110 and 66 million dollars, respectively.
This news came in a year in which the Cape Verdean economy continued to grow, although more moderately and at a much lower level than the previous year.
According to the Bank of Cape Verde (BCV), the country’s economic growth slowed down in the first half of 2023 and weak demand, slightly more restrictive credit granting criteria for companies and the moderation of external tourist demand are highlighted as causes.
In its public report in October 2023, the BCV states that, as a result of these conditions, there was a moderation in private consumption and net exports and a contraction in investment.
The slowdown in economic activity extended to almost all sectors of the economy, with particular emphasis on services linked to tourism (namely, accommodation and restaurants, transport and commerce), which, from the BCV’s perspective, suggests that the positive effects delay in the recovery process from the pandemic crisis, with the end of restrictions on mobility and the tourist recovery, which began in 2021 and culminated in 2022, may have disappeared in 2023.
In the first half of 2023, the national economy grew 5.8% year-on-year, compared to the same period in 2022, it expanded 18.9%.
The year was also marked by the reduction in inflation. According to the BCV, the average annual inflation rate fell from 6.6% in August 2022 to 5.8% in August 2023. This reduction was mainly reflected in the softening of prices in the “food products and beverages” class. non-alcoholic”, in the reduction of prices in the “transport” class, as well as the reduction in prices in the “housing, water, electricity, gas and other fuels” class.
Likewise, the current account deficit registered a “slight improvement” compared to the previous year. According to the BCV, in the first half of 2023 the current deficit showed an improvement of 44.7 million escudos, standing at 3,237.4 million escudos, when last year it had an improvement of 11,434.4 million escudos for the 3,282.1 million escudos.
This evolution was mainly due to the slowdown in the growth rate of exports of tourism travel services and emigrant remittances, the reduction in exports of air transport services and the re-exports of fuel and food in national ports and airports.
At an economic level, the year 2023 was marked by the transfer of airport management to the company Cabo Verde Airports, within the framework of the Airport Public Service Concession Contract between the State of Cape Verde and VINCI Airports.
The scandal surrounding the reports from the General Inspectorate of Finance to the Environment and Tourism Funds, which point to irregularities, and the news of the abandonment, by Macau Legend, of businessman David Chow’s tourist project on the Santa Maria islet were other issues that marked the year that is now ending.
At a financial level, emphasis is placed on the maintenance of interest rates by banks and the launch, by the Cape Verde Stock Exchange (BCV), of the first green bonds, blue bonds and social bonds.
During the year the country hosted major events, notably the international conference of partners, promoted by the Government, on the island of Boa Vista, and which was attended by the main multilateral and bilateral partners, namely the United Nations, the European Union, the World Bank, IMF, Arab Development Bank, BIDC, ADB, national private partners and investment funds.
Held at the end of April, the meeting aimed to mobilize financial resources for the implementation of the Strategic Plan for Sustainable Development 2022-2026 (PEDS II).
Another notable event of the year that is about to end was the African Caucus 2023, on the island of Sal, an annual meeting that brings together finance ministers and governors of African central banks with the International Monetary Fund (IMF) and the World Bank.
Another novelty was the installation of a permanent representation of the IMF in Cape Verde and the selection of the country to access the Trust Fund for Resilience and Sustainability (RFS), in the amount of 32 million dollars.
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