The African Development Bank Group President Dr Akinwumi Adesina has met with Cabo Verde Prime Minister José Ulisses de Pina Correia e Silva on an official visit to the institution’s headquarters in Abidjan.
The two discussed the economic situation of Cabo Verde and emphasized the need to strengthen the country’s emergence in the face of exogenous shocks such as the war in Ukraine and the Covid-19 pandemic.
Adesina praised the Cabo Verde government for its “rapid and effective” response to the Covid-19 pandemic, which mitigated its shock. He particularly noted how the country had managed to re-open its economy as early as October 2021, in tandem with the vaccine roll-out. “It is important to note that by the end of June 2022, 85.2% of the population was fully vaccinated, in contrast with an African average of 16%. I congratulate you and your government for this remarkable effort,” Adesina said.
He went on to say that in 2020, the Bank had provided a lump-sum support package of € 24 million to Cabo Verde to help protect livelihoods and businesses, adding that Bank support for the government – whose budget spending grow by 1.6% of GDP in 2021 – enabled it to provide social protection and enhanced cash transfers to some 20,000 vulnerable households.
Adesina also praised the government for its work to enable post-Covid economic recovery. Growth in 2020 had fallen by 14.8% but bounced back to 7.1% in 2021 and is expected to reach 5.1% in 2022 before rising to 5.3% in 2023.
Dr Adesina listed the Bank’s investments in Cabo Verde to strengthen its emergence: financing the construction of Praia Airport, where the number of daily passengers rose from 400 to 1000; constructing power transmission lines; supporting digital development to make the country a technology hub; developing agricultural value chains, etc., and offered assurances that the Bank stood ready to support the country. “I know that many challenges remain: debt, the impact of climate change – an island country remains very exposed to climate change – and the Russian-Ukrainian war’s impact on food security.”
Prime Minister de Pina Correia e Silva expressed his admiration for the way in which the Bank helps African countries to address key development challenges and emerging issues. In particular, he welcomed the Bank’s support in the fight against Covid-19 and the Zika Virus, which have enabled the country to preserve its economy.
Access to concessional resources
“We must recognize the support of the African Development Bank in Cape Verde’s emergence. We are here to find out if we can access financing instruments in this emergency from our bilateral partners and international financial institutions, such as the Bank Group,” the prime minister said.
“We need to increase our economic resilience and as a small island state, we will need not only finance on emergency terms, but also structuring financing to reduce our exposure to exogenous shocks while strengthening our resilience and creating the conditions for sustainable growth. We ask the African Development Bank to study the possibility of allowing Cape Verde access to concessional funds,” he added.
In addition to structuring infrastructure investments (the airport), Prime Minister José Ulisses de Pina Correia e Silva mentioned financing needs in agriculture, the digital economy, tourism, the blue economy, renewable energy (slated to rise from 20% to 50% by 2030), and human capital. Adesina reassured his guest about the various financing opportunities that the Bank could offer his country. “We will be by your side.”
This visit will further strengthen the Bank Group’s excellent relationship with Cabo Verde, which joined the Bank in 1976. Since that time, the Bank has invested more than $643 million in 71 projects.
Prime Minister’s visit comes as the African Development Bank launches an important initiative to address the collateral effects of the war between Russia and Ukraine that is driving up food prices and raising the spectre of severe food insecurity in Africa. The war, he said, was having a terrible impact on his country, which depends on imports to meet 80% of its basic product and energy needs.
On 20 May 2022, the Board of Directors of the African Development Bank approved the $1.5 billion African Emergency Food Production Facility to provide 20 million small farmers with certified seed –wheat, rice, maize and soy bean — to produce an additional 38 million tonnes of cereals to help African counties avoid an acute food crisis. The facility will generate a US$ 12-billion increase in food production over the next two years.
Adesina said that the success of the ongoing negotiations on the replenishment of the African Development Fund would help many fragile African countries and small island states such as Cabo Verde have greater resources to meet development challenges and emerging issues. He urged the Prime Minister to continue to make his case for a resounding success to the negotiations.