Cabo Verde: Cabo Verde Prime Minister, African Development Bank Head Affirm Commitment to Strengthen Island Nation’s Economy from Exogenous Shocks – African Business

The African Development Bank Group (www.AfDB.org) President Dr Akinwumi Adesina has met with Cape Verde Prime Minister José Ulisses de Pina Correia e Silva on an official visit to the institution’s headquarters in Abidjan. The two discussed the economic situation of Cabo Verde and emphasized the need to strengthen the country’s emergence in the face of exogenous shocks such as the war in Ukraine and the Covid-19 pandemic.

Adesina praised the Cabo Verde government for its “rapid and effective” response to the Covid-19 pandemic, which mitigated its shock. He was especially impressed by how the country was able to re-open its economy in October 2021, as a result of the vaccine roll-out. “It is important to note that by the end of June 2022, 85.2% of the population was fully vaccinated, in contrast with an African average of 16%. I congratulate you and your government for this remarkable effort,” Adesina said.

He went on to say that in 2020, the Bank had provided a lump-sum support package of € 24 million to Cabo Verde to help protect livelihoods and businesses, adding that Bank support for the government – whose budget spending grow by 1.6% of GDP in 2021 – enabled it to provide social protection and enhanced cash transfers to some 20,000 vulnerable households.

Adesina also thanked the government for its efforts to promote post-Covid economic growth. The 2020 growth rate was 14.8% lower than in 2020. However, it rose to 7.1% in 2021. In 2022, it is expected to rise to 5.1% and then 5.3% in 2023.

Dr Adesina listed the Bank’s investments in Cabo Verde to strengthen its emergence: financing the construction of Praia Airport, where the number of daily passengers rose from 400 to 1000; constructing power transmission lines; supporting digital development to make the country a technology hub; developing agricultural value chains, etc., and offered assurances that the Bank stood ready to support the country. “I know that many challenges remain: debt, the impact of climate change – an island country remains very exposed to climate change – and the Russian-Ukrainian war’s impact on food security.”  

Prime Minister de Pina Correia e Silva expressed admiration for the Bank’s support of African countries in addressing key development challenges and emerging problems. In particular, he welcomed the Bank’s support in the fight against Covid-19 and the Zika Virus, which have enabled the country to preserve its economy.

Access to concessional resource

“We must recognize the support of the African Development Bank in Cape Verde’s emergence.  We are here to find out if we can access financing instruments in this emergency from our bilateral partners and international financial institutions, such as the Bank Group,” the prime minister said.

“We need to increase our economic resilience and as a small island state, we will need not only finance on emergency terms, but also structuring financing to reduce our exposure to exogenous shocks while strengthening our resilience and creating the conditions for sustainable growth. We ask the African Development Bank to study the possibility of allowing Cape Verde access to concessional funds,” he added.

In addition to structuring infrastructure investments (the airport), Prime Minister José Ulisses de Pina Correia e Silva mentioned financing needs in agriculture, the digital economy, tourism, the blue economy, renewable energy (slated to rise from 20% to 50% by 2030), and human capital.    Adesina assured his guest of the Bank’s many financing options. “We will be by your side.”  

This visit will further strengthen the Bank Group’s excellent relationship with Cabo Verde, which joined the Bank in 1976. Since that time, the Bank has invested more than $643 million in 71 projects.

Prime Minister’s visit comes as the African Development Bank launches an important initiative to address the collateral effects of the war between Russia and Ukraine that is driving up food prices and raising the spectre of severe food insecurity in Africa. He said that the war was having a devastating impact on his country, which relies on imports for 80% of its basic products and energy needs.

The Board of Directors of African Development Bank approved, on 20 May 2022 (approval) the $1.5 Billion African Emergency Food Production Facilityhttps://bit.ly/3aAFXXs) to provide 20 million small farmers with certified seed –wheat, rice, maize and soy bean — to produce an additional 38 million tonnes of cereals to help African counties avoid an acute food crisis. Over the next two-years, the facility will lead to a US$ 12 billion increase in food production.

Adesina stated that success in the ongoing negotiations for the replenishment to the African Development Fund would help many fragile African states and small island countries such as Cabo verde have more resources to face development challenges and new issues. He urged the Prime Minster to keep arguing for a successful outcome to the negotiations.

Distributed by APO Group for African Development Bank Group (AfDB).

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Media contact:
Romaric Ollo Hien
Communication and External Relations Department
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