Cape Verde - The Poverty Reduction Strategy Support Programme II (PRSSP-II)

Cape Verde has one of the strongest macroeconomic management performance among Sub-Saharan African countries. Over the past ten years, Cape Verde’s economy has achieved significant macroeconomic results and the Government has implemented major economic and financial reforms. The accelerated GDP growth in recent years and major investments in human capital will enable Cape Verde to achieve most of the Millennium Development Goals. Moreover, the country will continue to successfully implement a series of structural reforms with the support of its development partners, in particular the Bank. However, Cape Verde’s economy has not escaped the aftershocks of the international economic crisis despite the safety nets introduced. The shock waves of the crisis have seriously affected the tourism sector, the main engine of economic growth. According to forecasts, the economic slowdown will persist in the second half of 2009 and in 2010, Therefore, the Cape Verde Authorities must be prepared for a significant, unanticipated revenue shortfall. Consequently, the Government has defined a series of countercyclical fiscal measures in order to mitigate the impact of the crisis on economic activities. Despite the exogenous shock it is experiencing, Cape Verde has demonstrated its commitment to successfully carry through its countercyclical reform measures while pursuing its reform programme.