AfDB chief and Prime Minister of Cabo Verde discuss the country’s economic situation
The President of the African Development Bank Group, Dr. Akinwumi Adesina, met with Cape Verdean Prime Minister José Ulisses de Pina Correia e Silva during an official visit to the institution’s headquarters in Abidjan. The two men discussed the economic situation in Cape Verde and underlined 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 Verdean government for its “quick and efficient” response to the Covid-19 pandemic, which softened its shock. He notably noted how the country had managed to reopen its economy as early as October 2021, alongside the deployment of the vaccine. “It is important to note that at the end of June 2022, 85.2% of the population was fully vaccinated, compared to an African average of 16%. I commend you and your government for this remarkable effort,” Adesina said.
He went on to say that in 2020 the Bank had provided a EUR 24 million lump sum support program to Cabo Verde to help protect livelihoods and businesses, adding that the Bank’s support to the government – whose budgetary expenditure increases 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 commended the government for its work to enable post-Covid economic recovery. Growth in 2020 had fallen by 14.8% but rebounded to 7.1% in 2021 and is expected to reach 5.1% in 2022 before recovering to 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 increased from 400 to 1,000; construction of power transmission lines; support digital development to make the country a technological hub; development of agricultural value chains, etc., and ensured that the Bank was 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 impact of the Russian-Ukrainian war on food security.
Prime Minister de Pina Correia e Silva expressed his admiration for the way the Bank is helping African countries address key development challenges and emerging issues. He particularly 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 resources
“We must recognize the support of the African Development Bank for the emergence of Cape Verde. 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 than the Bank Group,” said the Prime Minister. said.
“We must increase our economic resilience and as a small island state, we will need not only emergency financing, but also structural financing to reduce our exposure to exogenous shocks while strengthening our resilience and creating the conditions for sustainable growth. We call on the African Development Bank to study the possibility of enabling Cape Verde to access concessional funds,” he added.
In addition to structuring investments in infrastructure (the airport), Prime Minister José Ulisses de Pina Correia e Silva spoke of the financing needs in agriculture, the digital economy, tourism, the blue economy, renewable energies (to increase from 20% to 50% by 2030) and human capital. Adesina reassured his host about the various financing opportunities that the Bank could offer his country. “We will be by your side.”
This visit will further strengthen the Bank Group’s excellent relations with Cabo Verde, which joined the Bank in 1976. Since then, the Bank has invested more than $643 million in 71 projects.
The Prime Minister’s visit comes as the African Development Bank launches a major initiative to deal with the collateral effects of the war between Russia and Ukraine which is driving up food prices and raising the specter of a serious food insecurity in Africa. The war, he said, is having a terrible impact on his country, which depends on imports to meet 80 percent of its basic commodity and energy needs.
On May 20, 2022, the African Development Bank’s Board of Directors approved the $1.5 billion African Emergency Food Production Facility to provide 20 million smallholder farmers with certified seeds — wheat, rice , corn and soybeans — to produce an additional $38 million. tonnes of cereals to help African countries avoid an acute food crisis. The facility will generate a US$12 billion increase in food production over the next two years.
Adesina said the success of the ongoing negotiations on the replenishment of the African Development Fund would help many fragile African countries and small island states such as Cabo Verde to have more resources to address development challenges and emerging issues. He urged the Prime Minister to continue advocating for a resounding success of the negotiations.