The Cape Verdean parliament has passed a law stipulating that the country’s domestic and foreign public debt in the short and medium term cannot exceed 60% of the Gross Domestic Product (GDP) at market prices, according to local press reports.
The law also sets out that if the government in office exceeds the maximum limit at the end of the financial year it, “is obliged to present well defined strategies that bring it back to the stipulated limit.”
The Law on the Constitution, Issuance and Management of Public Debt was approved with only favourable votes from the MPD, the ruling party.
MPD member of parliament João Duarte said this law fills a gap in terms of public debt accumulation discipline and obliges the government to present quarterly reports on the state of public debt to Parliament.
The law applies to debt of all public sector entities, except for those of local authorities governed by a special law, and refers only to the direct debt of the State – that is to securing financial resources to respond to the financing needs of the implementation of the constitutionally defined priority tasks of the State.