Africa Banking Cabo Verde Cape Verde Coronavirus Economy Finance Government

Cabo Verde announces measures to support companies

The government of Cabo Verde has launched State-backed lines of credit in the amount of 4 billion escudos (US$7.6 million) to boost liquidity of companies during the current pandemic, prime minister Ulisses Correia e Silva said on Tuesday in Praia.

The prime minister was speaking at the end of a meeting of the Social Consultation Council (CCS), which adopted a tri-partite agreement including fiscal, financial and social security measures to mitigate the effects of the COVID-19 pandemic, protect employment and companies and keep the economy in operation.

“With the opening of credit lines with State guarantees that may be up to 100% we have set up conditions, if treasury support is required, and companies are required to continue operating, to have resources available at zero or low credit risk for companies to continue conducting their activities,” he said cited by Cape Verdean news agency Inforpress.

Of that total amount of 4 billion escudos, 1 billion will be earmarked for large companies in all areas of activity and with a guarantee of up to 50%, another credit line of 1 billion escudos for companies in the tourism, restaurant, events and related sectors, travel agencies, transport, entertainment and similar, with guarantees of up to 80%.

Another 1 billion-escudo credit line was also established for small and medium enterprises in all sectors of activity with guarantees of up to 100%.

According to Ulisses Correia e Silva, these lines of credit also include 300 million escudos for micro-financing institutions and 700 million escudos in guarantee lines for micro, small and medium enterprises, focused on supporting public procurement operations.

As well as the credit lines, the prime minister also announced that in order to mitigate the effects on liquidity of companies, the public Treasury will “immediately pay” outstanding invoices from suppliers of goods and services, in an amount that may total 1 billion escudos.

In terms of fiscal measures the head of the government mentioned flexibility in payment of fees and taxes by companies, by extending payment deadlines, implementing exemptions, payment in installments and suspending and extending deadlines for tax.

Correia e Silva also noted the need to boost the liquidity of commercial banks make prudential rules more flexible and added that the Bank of Cabo Verde, as the central bank, would soon announce measures to allow for a moratorium on loan repayments and restructuring of loans of companies and individuals.

The prime minister warned, meanwhile, that the fiscal, financial and social security measures directed towards companies in order ot mitigate the effects of the COVID-19 pandemic would be conditional upon keep jobs in place.

Source: Macauhub

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