Cape Verde is among the five countries with the highest debt-to-GDP ratio in sub-Saharan Africa along with Angola and Mozambique, with ratios all above 100%.
Recently Fitch Ratings affirmed Cabo Verde’s ‘B-‘ rating as reflecting a significative public and external debt, large sovereign contingent liabilities and the economy’s high dependence on tourism, severely affected by covid-19 pandemic.
During a virtual meeting sponsored by Fitch Ratings its Senior Director Jan Friederich stated:
“(…) we are at the level we were at when the major global debt relief initiatives were implemented for the most indebted countries over 20 years ago, and there are already several countries where debt interest accounts for more than 30% of revenues, such as Angola, Ghana, Nigeria and Zambia”.
To refer that along in 11 other countries Cape Verde adhere to the World Bank Debt Service Suspension Initiative (DSSI) including Mozambique and Angola, allowing countries to benefit from extended moratorium on debt payments until the end of the first half 2021.
The DSSI agreement was approved last in April 2020 and offers a temporary suspension of “official sector” or government-to-government debt payments to 73 countries. Payments covered are not forgiven but delayed, with a repayment period of five years and a one-year grace period.