Africa-Press – Cape verde. The Standard & Poor’s (S&P) credit rating agency has upgraded Cape Verde’s rating to B+, citing fiscal and external progress, and assigning a “positive outlook,” in a note dated Friday and consulted by Lusa.
“We have raised our long-term rating from B to B+ and reaffirmed our short-term rating at B for Cape Verde,” wrote the agency, which had upgraded the rating from B- to B in August 2024.
“Strong tourism and remittance flows are driving Cape Verde’s rapid economic growth and supporting the improvement in its external and fiscal position,” it explained.
S&P expects Cape Verde to “register primary general government surpluses (excluding interest payments) over the next three years, facilitating further reductions in the debt-to-GDP ratio.”
State-owned enterprises are considered “contingent liabilities for the State,” although the agency considers them “controllable.”
“[The profile of public debt], mainly concessional, long-term and low-cost, and relatively high economic growth support the improved risk rating – we forecast that the average cost of interest payments on Cape Verde’s public debt will be 6.6% of revenues in the period 2026-2029, one of the lowest in Africa and well below nominal GDP growth,” it pointed out.
The financial rating agency addressed the political situation in the archipelago, noting that the legislative elections in May 2026 and the presidential elections in November present “some uncertainty, predicting a close contest between the ruling Movement for Democracy (MpD) and the opposition African Party for the Independence of Cape Verde (PAICV)”.
“The latter advocates greater state intervention and more social spending, but the country’s solid institutional framework ensures stable transitions and does not usually imply major radical policy changes,” wrote S&P.
In preliminary forecasts, “average real GDP per capita growth of 4.3% is predicted between 2026 and 2029, higher than that of many comparable countries,” although, in the eyes of the rating agency, “the shortage of professional skills, the lack of interconnection between the islands, and the limited supply of water and electricity” represent “structural obstacles” to the economy.
Cape Verde’s external vulnerabilities “continue to decrease,” it added, after registering “a current account surplus of 3.8% of GDP in 2024, and the trend is estimated to have continued in 2025 with a surplus of 3.3%, the first in almost four decades.”
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