WASHINGTON, December 11th, 2023 – The World Bank Board of Executive Directors has approved a US$25 million Development Policy Financing (DPF) loan for Cabo Verde, marking a crucial step to strengthen fiscal consolidation and sustainable economic growth. The DPF operation consists of credits from the International Development Association (IDA)*.
The DPF is strategically aligned with Cabo Verde’s efforts to address challenges posed by the pandemic and accelerate the achievement of the SDGs. “By rebuilding fiscal space – including through climate-conscious public investments – and pursuing transformative reforms, Cabo Verde aims to create a more equitable and resilient economic recovery”, said Anna Carlotta Massingue, Senior Economist.
The operation, the first in a series of three, is aligned with Cabo Verde's Strategic Plan for Sustainable Development II (PEDS II) and supports efforts to rebuild fiscal space while introducing key reforms for a sustainable economic future. It consists of two pillars: Pillar A, "Rebuilding Fiscal Space,” focuses on mobilizing domestic revenue, streamlining tax incentives for greater efficiency, strengthening climate resilience of public investments, and enacting reforms to improve the performance of State-Owned Enterprises. Pillar B, "Green and Blue Economy,” fosters diversification beyond the “sand-and-sea” tourism offering by investing in sustainable digital technologies, implementing measures for long-term fisheries sustainability, enhancing diversification in the tourism sector, and promoting increased women's participation in economic activities.
“This operation underscores the World Bank Group’s commitment to working hand-in-hand with Cabo Verde to achieve its development objectives. The approval of the DPF marks an important milestone in these collaborative efforts to build a more sustainable and inclusive economic future for the people of Cabo Verde,” said Rosa Delgado, Economist and acting World Bank Cabo Verde Resident Representative.
*The International Development Association (IDA) is the World Bank’s fund for the poorest. Established in 1960, it provides grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. IDA resources help effect positive change in the lives of the 1.6 billion people living in the countries that are eligible for its assistance. Since its inception, IDA has supported development work in 113 countries. Annual commitments are constantly on the rise and have averaged $21 billion over the past three years, with about 61% going to Africa.