Cape Verdean government “plans to reinvigorate the implementation of reforms in public companies”, namely restarting the privatisation process of several state-owned companies, halted April last year as a result of covid19 pandemic, as stated on final report of the 3rd and last review of the International Monetary Fund (IMF) under the Policy Coordination Instrument technical assistance program.
With an economy still facing severe economic impacts of Covid-19 pandemic along with significant levels of public debt (relatively to GDP), privatisation plan target companies like CV HANDLING, a subsidiary fully owned by ASA, responsible for the airport management and air traffic control, which by it’s turn shall be subject to a long term concession agreement for airport management business.
Equally on the concession of port services, currently in charge of the public company ENAPOR, responsible to manage all 9 ports across the country, with leading “Porto Grande” (São Vicente Island) and “Porto da Praia” (Santiago Island) representing the majority of passengers and cargo volumes. In this field a significant set of investments are in progress, namely, a new cruise terminal located in São Vicente Island as well as the extension of Maio Island Port, both initiatives co-finance by foreign development entities namely, Orio Fund (Dutch Facility for Infrastructure Development) and African Development Bank (AfDB), respectively.
The list of key or strategical companies to be privatised includes ELECTRA, the public company responsible to produce and distribute energy and water, this last vital resource provided mostly based on desalinization plants located in several islands. It is also to expect the completion of privatisation and sale of state qualified participations on pharmaceutical sector companies, INPHARMA and EMPROFAC, process of a high relevance considering the increase relevance of this sector on the pandemic context.
Last May 2019 Cape Verdean state acquired the remaining 40% share rights on CV TELECOM, entity providing for landline and mobile network operator (MNO), from Brazilian OI that way ending a long term dispute threatened to be taken to international arbitrage resolution and becoming the owner of 100% of issued capital.
Therefore, is without surprise that CV TELECOM is equally on the asset list aimed to be privatised, with Cape Verdean State working to identify a financially strong and technically reliable partner, that could play a decisive role on scale up, modernization and business model restructuring of a vital economic sector like this.
As a conclusion, and like in other countries that enroll such privatisation programmes, the target shall be increased efficiency of companies operating in strategical sectors of economy, along with reducing the size and role of the public sector, aiming for a desired reduction of public debt and deficit. A privatisation program which is naturally a stock markets enabler, supported in the country by BVC (Cape Verde Stock Exchange) which, as an aside, is also identified as a disposable asset.